More people are Willing to Pay for Online Music

Research firm Ipsos-Insight suggests that consumers expect to pay less for digital music than for those sold in a physical CD format, but that more people are willing to pay for downloaded music than previously.

New findings from TEMPO, the company's quarterly study of digital music behaviors, reveal that American internet users expect to pay a substantially lower price for a permanent full-length album download from a well-known, established artist than for a full-length physical CD. American internet users aged 12 and older stated an acceptable price range of $9.99 to $14.99 for a new, full-length physical CD release. In contrast, the acceptable price range for a digitally distributed, full-length album download is only between $5.00 and $9.99 – roughly $5.00 less than for a physical CD. These findings were based on recent interviews conducted with a representative US sample of 488 Internet users aged 12 and over.

The research also found that these price expectations for a physical CD were consistent regardless of downloading experience, suggesting that lower prices for digitally distributed music are expected even among consumers who have not downloaded music.

The firm's research revealed that the number of paying music downloaders doubled in the first half of 2003, coming as the Recording Industry Association of America's (RIAA) announced it intended to begin prosecuting file-sharers, and also with the launch of Apple's iTunes.

Ipsos-Insight estimates that roughly 10 million Americans (16%) paid to download music or MP3 files, while only 8% paid during the fourth quarter of 2002 and 13% paid in the first quarter of 2003.

'A twofold increase in the number of American downloaders exposed to for-pay music downloads in just a six month timeframe signals a remarkable shift in downloader behaviour,' said Matt Kleinschmit, director, Ipsos-Insight.

Among the age groups, those 18 to 24 are the most likely to have paid to download digital music, while 12 to 17 year olds were among the least likely. 'Downloaders of all ages are clearly beginning to experiment with fee-based online music distribution in increasing numbers,' said Kleinschmit.

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