Jupiter’s latest research into music consumption habits of iPod owners will make for uncomfortable reading. The tip of the iceberg is the iTunes conversion ratio – the number of tracks Apple has sold through iTunes divided by the number of iPods, which comes out at 20. So that’s 20 legally downloaded iTunes tracks for every iPod sold. That figure was higher in 2004 at 27, inline with the view that early adopters would be stronger buyers than mainstream users.
Mark Mulligan, VP and research director gave me an overview of the main findings:
– 83 percent of European iPod owners did not buy music on a regular basis – only 17 percent did. Owners of other brands of music players bought even less frequently at just 13 percent.
– iPod owners typically have nearly twice as much illegally downloaded music as legally downloaded music. But it’s not about Apple bashing, because owners of other MP3 players have been around three times as much. The one-click-purchase integration of the iPod with iTunes store is partly credited with that higher conversion rate.
– iPod owners are more likely to buy CDs online too…but that also shows that digital music stores have not radically changed their music consumption habits – more the way they playback their music.
– Free music completely outweighs paid music, whether legal or illegal. Mulligan said there is an absolute demand for free services and strong constituency for ad-supported services.
– About five percent of tracks on MP3 players are bought legally, so the conclusion is that people use these devices to manage their existing music collections, ripping CDs, downloading from friends and, of course, downloading music illegally from filesharing sites.
There is a high awareness among consumers that filesharing is illegal, but it is used by about 14 percent of the online population and will not go away, said Mulligan. “If 83 percent of iPod owners aren’t buying from the most successful store in the online music business, and more than double that amount are buying CDs, the music downloads market is not fulfilling its potential. If this was an end-of-term report, it would say digital music downloads ‘could do better’.” Report
This article originally appeared in MediaGuardian.