iTunes sold 20 million tracks in its first seven months of operation. Rhapsody?s 250,000 subscribers paid to listen to 28 million songs in October, up from 11 million in June. Between June and November, music lovers bought 7.7 million songs online, but only 4 million single-song CDs at stores. The future looks good, too. Jupiter Research expects online music sales to grow to $3.3 billion by 2008. Forrester Research, for its part, expects that within just four years online music will account for 33% of the music industry?s sales.
In May 2003, Winamp reached 5.5 million users, lagging far behind Microsoft Windows Media’s 43.1 million, RealNetworks’ 26 million and Apple QuickTime’s 13.5 million, according to online measurement firm Nielsen/NetRatings.
Ipsos-Insight found that 19% of U.S. downloaders own a portable digital audio player/portable MP3 player – up from just 12% in December of 2002. Jupiter Research expects U.S. shipments of MP3 players to practically double in 2003 to over 3.5 mil, and will continue to grow almost 50% per year for the next several years. In a 2003 Jupiter Research consumer survey, 6% of online adults said they would be buying a portable music device in the next 12 months, and the likely buyer is male (over 70%) and under age 35 (over 65%). Nearly 60% of customers in the market to buy a player will be shopping online for the holidays, seeking convenience and the ability to mail gifts directly.
|Demand for Music Subscriptions and Downloads|
|Type of Consumer
|Subscriptions||Downloads||Will Not Pay
|Music aficionados (357)||21%||25%||46%|
|Free-music fans (514)||13%||19%||60%|
|CD purists (280)||10%||16%||71%|
|Passive populace (746)||7%||10%||79%|
Ipsos-Insight estimates that roughly 10 mil Americans – or 16% – paid to download music or MP3 files off the Internet, while only 8% paid during the fourth quarter of 2002 and 13% paid in the first quarter of 2003. “A twofold increase in the number of American downloaders exposed to for-pay music downloads in just a six month timeframe signals a remarkable shift in downloader behavior,” said Matt Kleinschmit, director, Ipsos-Insight. Among the age groups, those 18 to 24 are the most likely to have paid to download digital music, while 12 to 17 year olds were among the least likely. “Downloaders of all ages are clearly beginning to experiment with fee-based online music distribution in increasing numbers,” said Kleinschmit.
Before the BMG+Sony merger the global music market looked as follows:
Universal 25.9% Sony 14.1% EMI 12.0% Warner 11.9% BMG 11.1% Others 25.0%
Two surveys of US consumers conducted by E-Poll find that 50% have downloaded music online. 70% of teenage consumers say they have downloaded music. When asked whether they consider such an act to be wrong, over 47% of all respondents said ?yes? but just 32.6% of teenage respondents said the same.
Jupiter expects online music industry revenues to quadruple over the next five years, to be worth $3.3bn by 2008, when web sales will account for one in four record purchases. Jupiter does not expect digital sales to surpass $80m this year, yet iTunes alone reaped $1m in revenues within a week of launching its Mac-based service in April and has now sold $14m worth of music. It launched a Windows version two weeks ago and generated $1m in three days.
eDonkey accounts for 52% of all upstream P2P traffic in Germany, compared with 44% for FastTrack-based applications, 3.6% for WinMX and 0.4 percent for Gnutella. In Israel, the split is 52% eDonkey to 47 percent FastTrack. UK PC users favour FastTrack (59% of all upstream traffic), but both WinMX and eDonkey play a major role, with 20% of the P2P activity each.
Nielsen//Netratings charted a 40% decline over the summer in the number of people using Kazaa. But a lot of that drop may be due to “the summer doldrums, when people are away from their computers.” Many college students, sometimes cited as among the heaviest downloaders, would have been away from their high-speed Internet connections.
As part of the fourth edition of its “Music on the Internet” report, Informa also notes that the strength of the P2P file-swapping services will not allow the digital music business to fully thrive, as $2.4 billion will be lost to P2P services this year, and $4.7 billion will be lost by 2008.
Macrovision says that elsewhere in the world, primarily Europe and Japan, more than 150 million discs have been manufactured with its copy-protection technology.