THE NPD GROUP NOTES RECENT INCREASE IN PEER-TO-PEER DIGITAL MUSIC FILE SHARING
PORT WASHINGTON, NEW YORK, January 16, 2004 – According to The NPD Group, music downloading via peer-to-peer (P2P) services began to increase in October 2003 and remained up in November 2003.
"The music industry was heartened to see that their campaign to reduce or eliminate file sharing on P2P networks appeared to be working," said Russ Crupnick, vice president of The NPD Group. "Recent information from complementary data services at NPD, however, noted an increase in the number of households and individual consumers using P2P services to download digital music files."
NPD's MusicWatch Digital service, which monitors household usage of P2P services directly from panelists' PCs, reports that the number of households downloading digital music files was up 14 percent in November 2003 compared with September. This up-turn comes after six straight months of declines in digital file acquisition, since April 2003 when the Recording Industry Association of America (RIAA) began a well-publicized campaign threatening individual file sharers with legal action resulting in fines.
Consumer-reported information gleaned from NPD's ongoing MusicLab survey confirmed the upward trend noted by MusicWatch Digital. MusicLab reported that 20 percent of the population 13 years of age and older said they downloaded music from P2P services in May 2003, 18 percent in July and 11 percent in September. Echoing NPD's MusicWatch Digital data, beginning in November the incidence of individuals sharing files grew to 12 percent. Although the difference of one percentage point appears small, NPD reports that this is a statistically significant increase based on the size of the NPDMusicLab survey sample.
According to Crupnick there are several reasons that might underlie this recent increase in file sharing:
"It's important to keep in mind that file sharing is occurring less frequently than before the RIAA began its legal efforts to stem the tide of P2P file sharing," Crupnick said. "We're just seeing the first increase in these numbers. NPD will continue to monitor whether it's a temporary seasonal blip, or a trend that suggests that the industry should be more aggressive in capping the use of illegal methods to acquire digital music."
Methodology Note: NPD MusicWatch Digital information is collected continuously from the PCs of 40,000 NPD online panelists, balanced to represent the online population of PC users. NPDMusicLab Surveys are conducted bi-monthly among a group of approximately 5,000 respondents aged 13 years and older; results are balanced to represent the U.S. population.
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