For some time now, unlimited-music services have defended themselves against the notion they cannibalise downloads by saying they actually grow the whole music revenue pie.
New research by NPD Group, seen by Digital Music News, says: “38% of (free) Spotify users report buying a song download in the past three months, compared to 17% for non-users.”
Spotify has its own built-in download option. Previously, it fulfilled downloads through 7digital, which had counted Spotify as one of its biggest clients.
One key line in Spotify’s defence is that, the typical annual revenue take from its subscribers, $120, is way above what non-streamers are paying for downloads. It will help Spotify to use figures like NPD’s which suggest it can also turn its non-paying, ad-listening users toward paying for downloads.
Beside Spotify’s own download store, some streamers likely turn to regular channels like the iTunes Store for their downloads.
NPD Group SVP Russ Crupnick (release) reports that Apple continued to dominate US paid music downloads in Q2 2012, taking 64 percent of digital sales and 29 percent of all recorded music sales regardless of format.
We have seen how International Federation of the Phonographic Industry figures show downloads sales continued to grow by around a tenth last year; and Crupnick is forecasting the same rate of growth through 2012:
“Despite increased usage of streaming radio and on-demand services, the market for digital ownership is still growing as the market evolves from the desktop to the pocket.”