According to the latest data from The NPD Group, an increasing number of CD buyers are also purchasing from legal digital music download services, such as iTunes, Buy.com and others. Legal digital music services also appear to attract consumers who tend to purchase more CDs than the average consumer. This comes at a time when fewer of these consumers are using peer-to-peer (P2P) services to share music files illegally.
Just under five percent of CD buyers reported using a legal service to purchase music during the first quarter of 2004, which is nearly three times the level NPD observed among music buyers during the same period in 2003 (1.7 percent). Among music buyers who purchased both physical CDs and a song download from a legal service, the likelihood that they also downloaded a song illegally fell dramatically, from 64 percent last year to 42 percent in 2004.
Subscription services showed only a slight reduction in the number of CDs that they purchased at retail. The average consumer who paid for digital music as well as CDs purchased less than one fewer CD in 2003 compared to 2002.
"Paid services like iTunes and Rhapsody appear to be attracting core music buyers, which can create a firm foundation for legal digital music purchases," said Russ Crupnick, president of NPD Music. "To date, NPD data shows that there has been a small reduction in sales of CDs; however, that decline might be offset by the overall value of the digital customer and the downturn in illegal file sharing."
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