41% of digital music buyers switched to digital music once they got broadband

According to NPD Group, 4.2 mln households tried paid digital music services in 2004. NPD’s estimate of the current market potential is 30 mln consumers. That potential market consists of music buyers who are both broadband-enabled and who use their PCs for other digital music activities such as burning, ripping or playing songs stored on their PCs. Both broadband and computer-enabled music activities are on the rise, which continues to raise the ceiling on the number of potential customers. More than most other factors, better technology offerings also helped drive the upswing in digital music downloads. 41% of digital music consumers say they began to download because of faster Internet access, 30% said it was because they had purchased a better computer and 22% attributed their digital music consumption to the fact that they had recently purchased a digital/MP3 player. Promotions were also important to consumers: 34% reported that they first downloaded music legally because of a special offer. At the same time, consumers are somewhat confused by perceived restrictions on what they can do with the music they purchase and download. They are also concerned by the price of the services. As a result only 55% of consumers who tried legal services came back for more in subsequent months. By comparison, 85% of peer-to-peer (P2P) users engaged in repeat usage in 2004.