Two separate reports offer contrasting opinion on the health of the digital music market.
Forrester Resarch analyst, Josh Bernoff has revealed figures that claim Apple sells 20 songs through iTunes for each iPod sold. He makes the assumption that this figure — which has remained relatively static historically — represents all legitimate music consumption by iPod users.
Meanwhile, Akamai has published a global glance at the traffic levels across 40 digital music stores, including iTunes.
The Forrester figures aren’t based on actual sales, but on information Bernoff has been able to estimate that is based on credit card records.
Over the past 12 months, 3.2 per cent of US households with internet access have purchased songs through iTunes, but only about $17 worth, his report claims. He also says the number of iTunes sales has slipped 58 per cent since January 2006.
This reflects a slowdown in US sales — possibly due to the label’s current market strategy of focusing marketing activity on a few big name acts. Archiving, storage and compression concerns also make iPod users quite likely to want to buy their music on CD.
The statistics could also represent growing consumer dissatisfaction with digital rights management (DRM) systems, though Bernoff makes no mention of this. Apple holds 6 per cent of the US music market.
Akamai’s report deals with known levels of activity on music websites. These contrasting results indicate that interest in digital music services continues to grow.
The Akamai Net Usage Index for Digital Music reveals:
– North America, Asia, and Europe represent the bulk of visitor traffic to these sites – Daily peak traffic worldwide is more than half a million visitors per minute – Traffic peaks in North America and Europe tend to occur mid-week, while peaks in Asia and Australia come toward the end of the week – Sunday is consistently the slowest day for visitors to these sites.
Akamai also conducted a survey of online consumers to better understand their digital music habits. Respondents ranged in age from 19 to 68 with a survey base of 200 people, 58 per cent female and 41 per cent male.
The survey showed that 86 per cent of respondents own a portable music device and 76 per cent spend $1-$5 on music downloads every week. 82 per cent of music lovers prefer a download-to-own service to anything else, and 42 per cent of customers are loyal to one digital music service.
“Not only has the internet quickly evolved into a key distribution channel for music, it’s dramatically changing the way consumers learn about, share, and buy music online,” said Brad Rinklin, vice president of marketing at Akamai.
The online music market is expected to increase sevenfold by 2010, with revenues from music downloads and subscription services expected to top CD sales on the web by next year, according to In-Stat Research.