online, new research shows, a signal that the music industry will need
to rely more heavily on other ways to recover revenue lost to piracy
and illegal downloading.
Europe's digital music market is expected to double to 385 million
euros ($487.1 million) in 2006 from a year ago, Jupiter Research said
on Monday, but iPod owners on average buy only 20 tracks a year from
Apple Computer's market-leading iTunes music store.
About 83 percent of iPod owners throughout Europe do not regularly buy
digital music, the study found, although they are more apt to do so
than owners of other portable media devices.
"The model isn't broken, there's just lots of room for improvement,"
Jupiter analyst Mark Mulligan said. "Digital music is really
underperforming its potential."
The study found that 30 percent of iPod owners illegally swap songs
using file-sharing networks and another 23 percent listen to Web-based
audio files for free legally.
Ipod owners also were found in the survey of about 4,000 consumers
across Europe to be much more likely to buy CDs online than they were
to buy downloads.
Apple's iTunes is compatible only with its iPod player,
about 60 million of which have been sold worldwide. About 200 million
songs had been sold on iTunes stores in Europe through August since
they launched about two years ago, Jupiter said.
Apple officials could not immediately be reached for comment.
A handful of services, including eMusic and Wippitt, sell songs in the
MP3 format that work on all music devices, including iPods.
Emusic launched in all 25 European Union member nations last week.
The music industry is licensing songs to dozens of new models
that are being tested online and over mobile phones, including the
forthcoming advertising-supported download service SpiralFrog and
advertising-supported peer-to-peer service Qtrax.
"Ad-supported is definitely appealing to the under-25s," Mulligan said. "It the key way of engaging the younger consumers."
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