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Pay Per Download Preferred Over "Disappearing Music"
April 8, 2005
Thomas Mennecke
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A new study by Ipsos-Insight suggests that portable online music subscription services not only face stiff competition from P2P networks, but also from pay-per-download services. Napster's "Music to Go" program is the first mainstream service to offer such a program, which allows individuals to pay a flat fee, in addition to their subscription, to download an unlimited volume of music.

While Napster has touted this program as a great success, Ipsos's new research tends to disagree with their enthusiasm.

Ipsos sampled 743 U.S. downloaders, presenting them with several simulated music environments. 1) a file-sharing network; 2) a traditional subscription with a "pay-as-you-go" model; 3) an "on-demand streaming PC-tethered subscription-based service"; 4) a portable online music subscription service (such as Napster to Go.) Initially, downloaders were not presented with the P2P option.

In direct contrast to Napster's apparent growth in popularity, 24% of those surveyed stated they prefer a fee based, pay-as-you-go subscription services (with a streaming audio option.) When presented with a service similar to Napster-to-Go, which allowed for unlimited downloading, the amount of downloaders preferring this method was only 5%.

Those with prior downloading experience showed an even greater gap, with 28% preferring a pay-per download option, while only 4% preferred an "all you can download" option.

On the surface it would appear an "all you can download" method makes more financial sense. The catch is however, if you terminate your subscription with Napster, you can not revalidate your PC-tethered device and all your music disappears.

"With all of the recent media attention surrounding this rapidly changing market, these findings indicate that many downloaders still prefer a transactional payment structure over one that is subscription-based," said Matt Kleinschmit, a Vice President with Ipsos-Insight and author of the TEMPO research. "This suggests that recently launched portable online subscription services may need to encourage broader adoption through ambitious pricing and promotional or incentive -based acquisition strategies, particularly among those downloaders who have previously only had experience with a la carte fee-based methods."

The crux of the survey came about when free P2P file-sharing was introduced. An impressive 62% preferred the P2P network over all other methods. Despite all the legal battles, lawsuits and other mishaps, the draw of P2P remains a powerful force in todays music downloading market.

This story is filed in these Slyck News categories
Authorized Music Store :: Other
File-Sharing/P2P Related :: Studies/Research

You can read the press release here.

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