June 7, 2005 – iTunes, Apple’s industry-leading a-la-carte music download platform, has reached a significant milestone by rivaling major peer-to-peer (P2P) file-sharing services in terms of usage. According to a recent report from The NPD Group’s MusicWatch Digital service, iTunes was utilized by 1.7 million households in March 2005, tying with LimeWire as the second most popular digital music service in the U.S. The top spot was held by the P2P platform WinMX, which was used by 2.1 million households during the same period.
The report highlights a pivotal shift in consumer behavior, signaling that legal music download services like iTunes are becoming serious competitors to their P2P counterparts. Napster and Real Networks’ paid download services also ranked among the top ten, demonstrating a growing acceptance of paid digital music.
Russ Crupnick, president of NPD’s Music and Movies division, remarked, “The music industry has long wondered when paid download stores would go head-to-head with free P2P services. The data clearly shows that time has arrived, with iTunes now competing at the highest level. This reflects a major transformation in how consumers access digital music, as legal alternatives become more viable and attractive.”
In March 2005, about four percent of U.S. households with internet access utilized a paid music download service. Interestingly, the majority of these users were older, with an average age of 33 and an average household income of $83,000. This demographic is less likely to engage in illegal file-sharing and more inclined to opt for legal music downloads, spurred by anti-piracy efforts and growing awareness of the legal implications of P2P services.
Crupnick further added, “Consumers in their post-college years, with less free time and more disposable income, are increasingly turning to legal download services. The legal alternatives offer convenience and security, making them an appealing option for older users who are moving away from the risky world of file sharing.”
This shift is seen as a major win for the music industry, which has been battling the widespread use of illegal downloading platforms for years. As litigation against P2P services raised awareness, many consumers began to reconsider their downloading habits, favoring paid services like iTunes.
The top ten digital music services based on household usage in March 2005 are as follows:
- WinMX – 2.1 million households
- iTunes – 1.7 million households
- LimeWire – 1.7 million households
- Kazaa
- BearShare
- Ares Galaxy
- Napster
- Morpheus
- Real Player Store
- iMesh
These rankings indicate a notable blending of both paid and free services in the digital music landscape, with iTunes and other paid platforms firmly establishing themselves as formidable players.
About NPD MusicWatch Digital
NPD MusicWatch Digital monitors digital music acquisition across both paid and free services, gathering data from a panel of 40,000 Windows PC users. The service offers a comprehensive view of consumer behavior and trends in the digital music market.