53% of online Americans purchased music in 2007

Some 27% of internet users say they have downloaded music from the internet, according to March 2006 survey. Now 53% of respondents said they had purchased music in 2007, and 26% of respondents were directed to the module with detailed questions about music purchasing. Respondents who were directed to the music module are not representative of the general population, according to Pew Internet Project. They are more likely to be internet users 83% and to have broadband at home (59% do), which compares to 73% and 50% respectively in the general population. They are also slightly younger, with a median age among adults of 43 compared with 45 in the general adult internet population.

32% of internet users buy music online

62% of internet users who used the internet to find out about music they bought cite something they found offline with 32% saying it was something they found on the internet, according to the Pew Internet Project. When queried about specific ways the internet influenced their music buying decisions, here is what internet users who bought music in the previous year said: 68% said it helped them learn more about bands or artists they were interested in; 57% said it introduced them to new artists they had not heard about before; 42% said it helped them save money in buying music; 37% said online information led them to buy more music than they otherwise would have; 30% said online information changed the specific songs or album they had in mind.

56% of those who bought music most recently said they could have made the purchase online

For the most part, those who said their most recent music purchase was in a store were doing this by choice. Some 56% of those who bought music most recently said they could have made the purchase online, while 37% said they could not have. Among the 22% of music purchasers who bought most recently online, 61% could have bought their music in a store, with 35% saying they could not have done that. Just 7% of online music purchasers said they visited a store to sample music or ask for some help before getting their music online, according to the Pew Internet Project. As to the nature of the music purchase – CD or digital download – some 41% of online buyers of music ordered a compact disc and 58% downloaded digital files. Put differently, 13% of music buyers say their most recent music purchase was a digital download of music files. When asked whether information found online had a major impact, minor impact, or no impact at all, here is what music buyers who used the internet in their research said 51% said online information had no impact at all; 37% said it had a minor impact; 12% said it had a major impact.

62% of Americans say all of the music they buy are CDs

62% of respondents in the music module said all of the music they buy are CDs. 20% said most are CDs; 7% said most of their purchases are individual digital files; 5% said all of their purchases were digital files; 3% said their purchases were equally split between CDs and digital files, according to the Pew Internet Project. 74% of music buyers say they went to a store, while 22% say they bought music online. Even among those who use the internet to find out about music, 33% said their most recent purchase was executed online.

Sharing content and buzz after buying music

Talk with friends or family about the
music
77%
Share the music with others 62
Watch a music video of the song or
artist
56
Go to see the artist or band perform at
a concert
47
Transfer the music to a CD, computer,
or MP3 player
44
Buy other merchandise, such as tshirts
from the same artist
20
Remix the music into your own
creation
9
Source: Pew Internet Project

How Internet users find out about new music

Ages 18-35 Ages 36-50 Age 51+
Going to the website of an artist,
band, or record label
41% 38% 30
Listening to free streaming
samples of songs online
46 25 21
Visiting an online store that sells
music
42 32 26
Downloading music files to your
computer
42 24 14
Listening to an internet radio
station
29 25 21
Reading online reviews or blogs
about songs and artists
28 22 21
Watching music videos online 34 21 16
Going to a MySpace profile of an
artist, band, or record label
31 13 8
Receiving an email from a band,
artist, or record company
15 9 8
Median number of online musicseeking
activities
3 2 1
Number of cases (internet users) 133 171 190
Source: Pew Internet Project

What people do after buying music online

Ages 18-35 Ages 36-50 Age 51+
Go to the artist’s or band’s
website
45% 40 29
Look online for live performances
by that artist
29 28 26
Read websites or blogs about the
music
33 26 16
Post the music to your page on
MySpace, Facebook, or another website
16 4 4
Post your own reviews, ratings,
or comments online about the music
10 4 5
Median number of online musicseeking
activities
1 1 0
Number of cases (internet users) 133 171 190
Source: Pew Internet Project

12% of music buyers purchase digital music files

Only 12% of music buyers report that they purchase digital music files, just 23% of internet-using music buyers say online resources were most important to their decision, and 63% say online information had no impact on their most recent purchase, according to the Pew Internet Project. Even 10% of buyers seeking an alternative path (e.g., downloading digital files) can have large impacts on the model. When 23% of younger internet-using buyers, arguably the most active and attractive customers, purchase mostly or entirely digital files, the disruption is consequential.

24% of US teens write music

All teens Cell phone
owners
Computer
owners
Types of non-school writing
Write letters or notes
to other people
64% 67% 64%
Write in a journal 34 36 36
Short writing 32 32 32
Do creative writing 25 25 25
Write music or lyrics 24 21 22
Create audio, video or
PowerPoint
presentations
16 15 18
Write essays 8 7 7
Write computer
programs
6 6 5
Frequency of non-school writing
Several times a week
or more
36% 35% 39%
Several times a month
or less often
54 56 50
Never 9 8 10
Source: Pew Internet Project

How internet users who have bought music in 2007 use online resources to learn about music

Going to the website of an artist, band,
or record label
37%
Listening to free streaming samples of
songs online
34
Visiting an online store that sells music 34
Downloading music files to your
computer
27
Listening to an internet radio station 25
Reading online reviews or blogs about
songs and artists
24
Watching music videos online 23
Going to a MySpace profile of an artist,
band, or record label
18
Receiving an email from a band, artist,
or record company
11
Source: Pew Internet Project

Most popular music download services: iTunes, Napster

iTunes usage increased significantly, to 24% past-30-day-usage among total US downloaders, up from 18% in 2006, according to Ipsos. An emerging majority (50% of downloaders aware of more than one site) consider iTunes the best fee-based digital music service (up from 41% in 2006 and 33% in 2005). Second-place Napster is rated “best” by just 10% of the downloader market, a figure that did not change from 2006 levels and has yet to eclipse the previous high of 22% in 2005. iTunes’ 2007 ascendance as ‘best brand’ generally came at the expense of the other top brands, each of which experienced directional declines.

How digital music gets on the users’ phones

Source of digital music on the phone France Germany Italy Spain UK US
Transferred from PC 85.8% 88.7% 86.9% 87.3% 83.6% 75.2%
Direct to phone – transferred from friends/family 12.5% 8.8% 9.8% 7.1% 12.5% 8.1%
Direct to phone – downloaded from music service 8.3% 7.6% 4.7% 8.6% 10.0% 18.3%
Direct to phone – other 8.8% 2.9% 4.3% 7.0% 6.4% 3.7%
Source: M:Metrics

33 mln Americans listen to online radio stations

Some 33 mln Americans age 12+ listen to a radio station over the internet during an average week – up from 29 mln listeners in 2006, according to Arbitron and Edison Media Research. 13% of Americans age 12 or older (an estimated 33 mln people) had listened to online radio in the previous week – an increase of two percentage points from January 2007. 24% of all Americans age 12 or older have a profile on a social-networking site such as MySpace, Facebook or LinkedIn, 63% of online radio listeners have a profile on such sites. 33% of online radio listeners with a social network profile visit their social networking site nearly every day or several times per day.

74.1% of iPhone owners listened to mobile music in January 2008

74.1% of iPhone owners listening to mobile music in January 2008, compared to 6.7% of the total mobile audience, according to M:Metrics. 84% of iPhone owners who use an MP3 player use an iPod. Demographic composition of iPhone users, which are similar to the demographics of other smartphone owners. They are more likely to be: male, aged 25-34, earn more that $100,000 and have a college degree, than the average mobile subscriber.

Top US music retailers: Wal-Mart, Apple

Apple announced that iTunes is now the #2 music retailer in the US, behind only Wal-Mart, based on the data from the NPD Group. Apple also announced that there are now over 50 mln iTunes Store customers. iTunes has sold over 4 bln songs, with 20 mln songs sold on Christmas Day 2007 alone.

4.85 bln hours spent on online music in 2007

Music radio online generated 4.85 bln total listening hours in 2007, up 26.1% over 2006, according to AccuStream iMedia Research. Total listening hours averaged 404.2 mln hours per month (excluding downloaded music), compared to a 320.5 mln hour average in 2006, including leading music subscription services such as Napster, Yahoo! Music and Rhapsody.

Shoutcast (owned by AOL) remains the top platform/destination in the music radio segment, with 48.4% of total listening hours for the year, followed by Clear Channel Online, Yahoo! Music, AOL Radio Networks and Pandora. The two leading subscription services combined captured approximately 4% of listening hour share in 2007. Internet Music Radio ad billings came in at $80 mln in 2007 for audio ads, up 194% over the $26.9 mln comparable in 2006. Adding another $12–$15 mln generated through video ads placed inside music channel environments, the market was worth approximately $92 mln in 2007.