The Downloading Myth

The music industry repeatedly points to online file trading as the explanation for its declining market. But annual sales are still well ahead of 1998's figures and several analysts note that when you take into account the economic downturn, increased competition for entertainment dollars, high CD pricing, uninspiring new music, and consumer resistance to copy protection, those negative numbers should really be far worse.

Several studies also suggest that in light of the deterioration of radio in the US, unauthorized online file trading may be one of the few promotional avenues that actually lead to authorized purchases. New research from Nielsen//NetRatings reinforces this idea, finding that for several key youth-oriented music genres, file traders purchase a higher percentage of music than other internet users.

The audience measurement and analysis company reports that rap music is the most popular genre purchased by Internet users downloading music. According to their latest data, Nielsen//NetRatings estimates that online music swappers were 111% more likely to purchase rap music than the average Internet user over the past three months.

Dance and club music held the second spot, with downloaders 106% more likely to have purchased dance and club music than the average Internet surfer and 77% more likely to purchase alternative rock. R&B/soul music and rock rounded out the top five.

Next comes Pop/Top 40 music and Soundtracks, whose fans were 41% more likely to have purchased music than non-downloaders, and alternative country and world music enthusiast groups who were each 39% more likely to purchase a disc if they were also downloading. Blues took the number 10 spot with the numbers showing that file traders were 25% more likely to purchase a disc or pay for a download than the average Internet user.

Nielsen//NetRatings also reveals that nearly 31 million active Internet users, or 22% of the active Internet population ages 18 years old and up, downloaded music in the past 30 days and 71% of this audience purchased music in the past three months.

Nielsen//NetRatings' Greg Bloom explains that while the perfect online selling formula is still being tested by Apple and others, "The de facto standard may be a few years away. But understanding the genres of music that sell well online and offline will be crucial to generating revenue along the way."

According to Nielsen//NetRatings, online surfers in Los Angeles have the highest propensity for downloading music as compared to Internet users in other cities across the country. LA surfers are 23% more likely to have downloaded music in the last 30 days than the average Internet user. New York and Dallas-Ft. Worth followed as the second and third highest ranked cities. Boston and Houston rounded out the top five regions where music/MP3 downloading occurs. "The cities in the top five, like LA and NY, are not only epicenters for music development in the country but are some of the most wired cities in the nation," adds Bloom.