Piper Jaffray: more teens downloading music legally; Apple’s iTunes Store dominates market

Avril Lavigne“The Internet analysts at investment bank Piper Jaffray, who surveyed nearly 500 teenagers in 11 high schools across the country, released a report late Monday about teens and music buying. According to the survey, 36 percent of the teens that download music online said they purchase music legally from stores like Apple’s iTunes… iTunes held a commanding market share lead over its rivals according to the survey, with 89 percent of the teens who buy online music saying they go to iTunes for it. ‘Other’ actually came in second place with 7 percent, while only 3 percent of the teens surveyed said they are Napster users. Rhapsody and Yahoo brought up the rear with 1 percent,” Paul R. La Monica blogs for CNNMoney.

“Of course, that means that 64 percent said they prefer to get their music for free from peer-to-peer file sharing services like Kazaa, Morpheus and Limewire… But here is the good news for record labels. When Piper Jaffray did a similar survey of teens in the fall of last year, only 28 percent said they purchase tracks from online music stores. And two years ago, just 20 percent said they… paid money to download songs,” La Monica reports.

La Monica reports, “So it has to be considered encouraging that, slowly but surely, user habits are changing and teens are becoming more used to paying for copyrighted content.”

Full article here.

[Thanks to MacDailyNews Reader “Bizarro Ballmer” for the heads up.]

Related articles:
Apple’s iTunes Store music, TV show, and movie sales show accelerating growth – April 09, 2007
Apple hits major milestones: 100 Million iPods sold, 2.5 billion iTunes Store songs sold – April 09, 2007

16 Comments

  1. Sorry, pop, but nearly two-thirds of high school kids are still stealing tunes. That’s hardly good news for society. However, it is comforting to read that the trend among youngsters is moving away from theft. I would like to know if the trend is due to a heightened awareness of individual responsibility among students or the fact that kids have more money to spend on their tunes.

  2. Obviously the lack of a disposable income is preventing the remaining teens from enjoying what iTunes has to offer in downloadable music quality.

    Since so many teens are online, isn’t there some sort of work they can do, surveys or something that can generate rewards of iTunes downloads?

    I’m sure they would like the higher bit quality and DRM free music than the questionable files downloaded from P2P, especially Windoze losers.

  3. Let’s here it for #2, “other.”

    The iTunes Store might was well have 100%, if the next closest competitor has 3%. What’s scary is that Apple doesn’t really compete. Apple just needs to make iTunes and the iTunes Store into satisfying iPod “features.” The iPod is the “must have” product, not the store. Most of the other online stores have to market the digital downloads themselves as the “must have” product. That’s a lot tougher, since all the stores offer essentially the same product.

  4. I don’t think this is a question of morality, but of economics. And by the way, I am not young and a big believer in the value of honesty, so please don’t think I’m excusing those who steal. But I think there are at least two economic factors that need to be considered.

    First, copying music is different than most “stealing” becasue it leaves the original owner unharmed. For example, if you steal my car, you have my car and I don’t. But if I make copy of my digital music and give it to you, then you have the music and I do too. This signifigantly lowers the barrier to theft of music.

    Secondly, piracy is a factor in all economic goods. When goods are easier to steal than they are to buy, theft goes up. An excellent example of this (especially at this time of year) is taxes. Studies have shown that when taxes go up so does illegal tax evasion. Likewise, when taxes go down, tax cheating goes down. Many studies have shown that lowering taxes can often raise receipts (exclusive of other factors like the Laffer curve) becasue there is a lower incentive to try to cheat the taxman.

    Shoplifing is one of the largest costs of running some retial establishments. And the majority of shoplifting occurs from employees. One of the ways to fight this is to give generous employee discounts so that it comes to a point where stealing simply isn’t woth the risk.

    We’re about to enter the great experiment in digital music. At this point, CDs, which represent 90% of all music purchases are not copy protected and legal downloads are protected by DRM. This is akin to trying to protect the contents of your car by winding up the windows – while leaving the doors unlocked and ajar.

    I think that EMI is on the right track. Give the consumer digitl music with high quality at a reasonable price. Ultimately, to lower the piracy, they’ have to lower the price. There is a price point where they will make it easy for most people to be honest – and the vast majority will then eschew piracy. What that price point is, I don’t know. For example, I have no stolen music. The .99 cent price per song is low enough that I’m not tempted to circumvent the system. Kids (and others) may find .99 cents or $1.29 too high a price to tempt them to stop sharing files. Only time and future price changes will tell when we reach the “optimum” price to effectively end piracy.

  5. Was I the only one in statistics class the day the professor said the minimum acceptable sample size was 1000? Why do all the “surveys” I see these days have sample sizes of just a few hundred?

    Laziness or ignorance?

  6. What factors have to be considered to estimate a sample size sufficient to draw a reasonable conclusion of a population as a whole? I suppose that the greater the homogeneity of a targeted population the smaller the sample need be compared to a more heterogeneous population. In other words, the appropriate sample size is dependent upon the diversity or uniformity of the variable of interest in the population considered. I think that if you read the original article that the researchers should have explained how they conducted the survey.

  7. I’m currently downloading a TV series and I’ve also downloaded music. I’ve also used the Russian based allofmp3.com. Let me say that if the price was right and everything was DRM free I’d stop using P2P and allofmp3 in a shot . I don’t object to paying I just want a fair and reasonable price. Most of my friends think the same as I do. The authorities need to think of consumers instead of just being on the side of business.

  8. Piper is finally using his/her time correctly.

    This proves that Jobs is right. The less hassles involved with getting digital music (at a reasonable price) the more people will tend to go legit for digital media.

    This is great news!

    Just my $0.02

  9. First, copying music is different than most “stealing” becasue it leaves the original owner unharmed. For example, if you steal my car…

    And… next message! Seriously folks — anyone who’s still throwing around this moldy old argument should only be ignored.

    Or to throw back the standard rebuttal: “Spoken like someone who’s never created anything in his life.”

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