(Fwd) A CD burning nation

Fri Apr 26 02:31:20 EDT 2002

This is the reason the music companies are worried.

Tom

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Date sent:      	Thu, 25 Apr 2002 18:00:00 -0500
Subject:        	A CD burning nation
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NETWORK WORLD NEWSLETTER: ANN HARRISON on 
PEER-TO-PEER 
04/25/02
Today's focus: A CD burning nation

Dear Tom trottier,

In this issue:

* Study reports of growing trend for music downloads
* Links related to Peer-to-Peer
* Featured reader resource

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Today's focus: A CD burning nation

By Ann Harrison 

According to a study released recently by the San Francisco 
market research firm, Odyssey, 40 million U.S. consumers have 
downloaded or transferred music online in the past six month. 
That equates to 31% of everybody online over the age of 16. 

Odyssey says those responding to the study reported an average 
of 11 downloads or file transfers per week. The survey polled 
3,000 consumers and is a representative sample of the U.S. 
population 16 years and older. 

The study states that swapping digital music files "appears to 
have become a mainstream activity." Right, what's remarkable is 
that the researchers seemed to be previously unaware of this 
fact. 

The study goes on to note that 53% of online users under 30 
said they have transferred or downloaded music in the past six 
months. Twenty percent of online users over 30 and 14% of those 
over 45 said they also have swapped music in the past six 
months. Odyssey concludes that these figures indicate that file 
swapping "is not something that this large base of young 
consumers is likely to outgrow over time." 

This trend is likely to continue to increase with the recent 
marketing of a CD burner-equipped computer from Gateway (see 
last issue). Odyssey points out that 23% of U.S. households 
have the ability to copy songs to a blank CD, up from 16% in 
January 2001.

An industry trade group is planning to release sales figures 
that will show a 10% drop in music unit sales from year to 
year, which they say is the worst such drop in history. The 
Recording Industry Association of America also recently 
reported music unit shipments in the U.S. were down 10% from 
2000 to 2001. 

While the Odyssey study concluded that the availability of 
digital music "appears to be playing a major role" in the drop 
in sales of recorded music, there are other factors at work. 
Chief among those is the inflated price of CDs and the 
lackluster lineup of new recording artists much commented on 
during this season's music awards. 

In a statement, Nick Donatiello, president and CEO of Odyssey 
said: "The industry has taken so long to respond that an 
entirely new set of expectations has been created. Now record 
labels will have to climb walls that they are allowing to be 
built." 

The study concludes that MusicNet and Pressplay music services 
offered by the record companies do not meet the needs of 
consumers who want to be able to create their own play lists 
and burn the music to a portable format. The authors of the 
study noted that digital technology gives users more choice and 
control over their music. Attempting to deny consumers what 
they want by imposing restrictive technology will be even more 
damaging for the music industry, which is already being 
abandoned by their customers. 

_______________________________________________________________
To contact Ann Harrison:

Ann Harrison is a technology reporter in San Francisco. She can 
be reached at mailto:ah at well.com.
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Odyssey 
http://www.odysseylp.com

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