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Stats Speak Kindly of Napster
Two new sets of data on Napster came out in the past few days - and it looks as if the Recording Industry Association of America may be in for a bit of a disappointment. The trade industry association is alleging in a lawsuit against Napster that it's responsible for lost music revenue because of its free-music downloads. But this newest data suggests that Napster may be more of a music-marketing tool than a replacement for CD buying.

Napster users are more likely to purchase music both online and offline, according to new numbers from Jupiter Communications. Napster users are 45 percent more likely to purchase music not because they are music aficionados, but because Napster itself is a catalyst for sales. Even when Jupiter researchers controlled for other factors that influence music purchasing, such as time spent online, income, age and gender, the use of Napster still had a very strong influence. "Other than existing level of music spending, Napster [use] was the greatest predictor of music spending," remarks Jupiter analyst Mike Saxon.

And the Napster flap may be good for the online music business. Cyber Dialogue reports that adults going online to access music-related content increased 48 percent from December to March. People are flocking to music sites and they're spending money - the average music user spends $610 online annually, compared to the $509 spent by the average adult online.

And Napster could be the key to the future of the online music market. Usage and awareness of Napster is incredibly high among college students, with more than 70 percent of students using it at least monthly and 19 percent using it daily. And not all of them are just in it for the freebies. An amazing 58.5 percent said they would pay $15 a month for the service.

Not only does Napster use increase music buying, but college students don't even keep downloaded music files. More than 72 percent of the students using Napster have kept and stored fewer than 10 songs. Students are not necessarily looking for a replacement to CDs, they're using Napster as the world's largest jukebox.

Another survey from the Digital Media Association and Yankelovich Partners confirms that digital downloads tease consumers rather than satisfy them. Of the two-thirds of respondents who had downloaded music from an online source, 66 percent said listening to a song online had at least once prompted them to later buy a CD or cassette featuring that song.

"The task before the music industry is to provide value to consumers. If the music industry could provide more value than a pirated channel, people wouldn't need to use a pirated channel," comments Webnoize analyst Rick Dube.

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