Legal Music Dwarfed by P2P

Music labels have received a mixed blessing in 2006 in terms of music downloads, according to a new study published by The NPD Group. The research firm found that the number of households legally buying online music downloads from iTunes and other services had soared in 2006 to 13 million, tripling the figures seen in 2004 -- a far faster growth rate than the 8 percent seen for largely illegal peer-to-peer sites, NPD said. While the number of homes using P2P was still larger at 15 million, analyst Russ Crupnick noted it was "likely" 2007 would be the first year when the number of legal buyers would overtake file traders.

The study was quick, however, to dispel notions that the slowdown would mean an immediate turnaround in piracy troubles. Expectedly, P2P users could be expected to download many more songs on average than legal buyers. A full 5 billion songs traded hands in 2006 and jumped 50 percent from the 3.4 billion just a year ago, the study reported.

The figure suggests that CDs and legal downloads still face an uphill battle in gaining acceptance. Labels and other providers need to pursue more anti-piracy efforts, said Crupnick, although the NPD expert declined to recommend any particular strategies. Instead, he recommended that companies be as considerate of their customers as they are of the bottom line, reminding them that repeat business depended upon a good initial experience.

"Most of all, the recording industry should continue to nurture and support those who pay to download music," he said. [image in part via Mandolux]

By Electronista Staff