http://www.geek.com/news/geeknews/2004Oct/gee20041014027408.htm

According to a new study, the amount of legal music downloads has decreased. The study, conducted by The NPD Group, indicates that the number of legal downloads per month peaked in April 2004, with 1.3 million songs. Each month since then has slumped to under one million. NPD noted that the slowdown seems to be in line with the end of some digital download sites' promotional prices.

NPD also indicated that Apple's iTunes is clearly the industry leader, commanding about 70% of the marketplace. Other leaders include Napster with 11%, and 6% each going to the MusicMatch, RealNetworks, and Wal-Mart stores.

At the same time, music downloads from P2P networks went up, with 6.4 million downloads in July compared to 6.2 million in April.

Read more on this topic from the Macworld UK article and NPD.

CHRISTOPHER'S OPINION
So, have legal music downloads hit the ceiling? Has the newness worn off? Will people go back to P2P or nothing? This study seems to point in that direction.

But I think it has more to do with what people are downloading. When a new medium is available, a lot of consumers will restock. For example, I own two versions of a lot of movies: one on VHS, one on DVD. Sure, you can create digital copies of songs, but a lot of consumers would rather just pay US$.99.

The P2P numbers are also very misleading. I am extremely confident that these networks are being flooded with bogus songs intended to frustrate downloaders. Counting those is not accurate.

iTunes and other digital music resources no longer have their new shine, but they will continue to sell music.

Perhaps the biggest reason that online music sales are down if because they offer an inferier product for the same price as a real life store.
If you go to a store and buy a CD. 9.99 lets say, take it home and use musicmatch jukebox for example, you can make and MP3 of the CD any way you want it. Edit it, name it and store it anyway you want. Also it can be used my 90% of any electronics you own.
If you go onto Itunes or napster and buy one of their "CDs" for 9.99, you get the digital version (AAC or MP3) loaded with DRM. You can not edit it, change the file name to suit your file structure, and many times you can only use it on the device the copy sells.
Now how can you tell me that's any sort of deal. Honestly if you want me to switch over to digital music, you need to offer me a deal over CD music. Since you no longer have to make the CD or ship it to a store, pass the saving on to me. That's why I like allofmp3.com because they have no DRM and at about 69 cents a CD (198 bit) I feel its worth not having a hard copy. (Which i get if I buy a CD from the store.)

Good points, Azurre. If given the choice of paying $9.99 for an audio CD encoded at 1411 kbps (the commercial CD), or an inferior copy (the MP3 or AAC) encoded at 128k, 256k, even 320k, most people would choose the higher quality option, I would hope.

I buy (non-RIAA) CD's just so I can have the option of making a copy for the car (I seem to somehow destroy CD's in the car), rip into MP3 for the iPod, and make MP3 CD's for work (up to 12 hours of MP3's fit on one 700 MB CD!).

All of my music is ripped into MP3 using iTunes, and for those who do not know, the free Apple iTunes program will rip your CD's - without any type of DRM - into MP3, AAC, AIFF, WAV, and a new Apple low-loss standard. I choose MP3 because it is so universal, and I can use it many different ways and share it easily.

True, the iTunes Music Store sells DRM infested ACC music, and I have never bought a single music file from Apple.

Nonetheless, the iTunes application for PC & Mac really kicks ass as a top notch digital jukebox and music organization tool!

"but a lot of consumers would rather just pay US$.99"

Consumers can do whatever they want, I'm a customer and that's 99 cents I'm not paying for their bag full of dog poo.

I agree with Azurre. It was a matter of time before the novelty of these RIAA suported, DRM infested sites began to abate and it's members realize that they are not what they were cracked up to be

If sales of downloads continue to decline yet sales of iPods continue to increase, then it will become clear that Apple is inducing infringement out the wazoo. LOL

and then we'll see another one of those 400 pound gorilla versus 400 pound gorilla battles in court like the riaa vs. walmart story was about... THAT'll be interesting to watch

yeah!!!

Screw the industry. They won't (and refuse to) adapt to the new paradigm. Let them die as did the dinosaurs, the world will be a better place when they do.
(For the sake of speed, I just wish there were an asteroid comming to instantly smash them into extinction instead of the slow death caused by a changing environment.)

Shmoo, of Electric Gypsy
Support Local and Independent Music!
DRM is for dodo's. (lol, yet another extinct animal.)

Legal downloads can never capture the teen market, the most lucrative sector with its rapid changes of fashion and excess money. Because many of those teens have no credit cards. Payment difficulties have plagued online commerce of all kinds since before the dot-com boom. That, and p2p is cool. In the target teen-culture, cool is everything.

...plus, it is too difficult to become a "legal" download. (They don't want indies on iTunes and Napster. Too much competition for em.) They want to outlaw anything and everything but their "legal" download sites. It is called the "monopoly mindset."

Between DRM and subscription fees, downloading music from the legal sites sucks. I think that these sites need to talk to Best Buy about their experiences with Dvix. It didn't owrk. People want to be able to do what they want with their music, listen to it on their portable device, burn to CD's, change format. They also want to "own" the music they purchased, and not have to pay a subscritpion fee, jus tto be able to keep listening to songs they paid for, not have then stop working when they don't pay the subscription fee.

The best site for legal downloading of music is Magnatune. (http://www.magnatune.com) You can download any format from mp3 to flac to wav, or all of them if you wish. And, the prices are right. On top of that, the artists are getting paid a lot more per album than they would through iTunes or any of those other online stores.

Here's a thought: could it be pop music is still crap, so people aren't buying it, just like they don't buy the CDs?

Anything worth listening to is likely already owned on CD or can be picked up cheaply second-hand, then ripped in the format & quality the user desires without any DRM getting in the way.

Great points everyone.

To me the bottom line is this, and it's obvious. The RIAA is CHARGING TOO MUCH! Imagine that!!

Perception of what music should cost is a far cry from what the RIAA labels feel they should charge. And its their own fault for doing so. How? By giving away too many CD's. By NOT meeting customer demands of making individual songs available for the consumer. By being greedy and requiring the customer to purchase the CD. All of these things created the situation we have today. It's the RIAA's OWN FAULT that the music industry sucks, yet they cry to Congress to pass legislation to "protect them". And they do so at the expense of OUR RIGHTS as a consumer.

And they wonder why the consumer is fighting back and NOT buying their DRM infested crap at so-called "legal" sites? It's not that hard to figure out, morons.

I much agree with INeedAlover that the prices are too high.

I wondered when RealNetworks came online if they would say how much business they picked up when they lowered the price of a download. They did to me it was astounding the amount of business they did during the first week or so. You can look back with the past pages of this site to see the actual figures they reported.

What I didn't hear was how much other d/l sites lost as a result of the lowering in price for the d/ls. It was probably most of what RealNetworks gained. They sold at a loss, trying to get customers in the door and used to the service.

Their increase in sales and the subsequent loss of d/l business after the closing of the special can only echo the same thing, customers feel the price of music is too high and are not going to pay more than necessary.

It is the view of the majors that they can dictate the price and nothing else is of concern. When that didn't work, the first thing they did was blame p2p and lobby for law changes. This won't help them in staying in business as changing laws doesn't change the customers mind on what the price of music should be. Mostly they say it is overpriced and either look at something else to buy or go elsewhere till they find it.

It is the fondest wish of the majors that you the customer will embrace on line purchasing of music through d/ls. That way their DRM will be in your library of songs and at some point you will be forced to buy the same songs again to do with them what you wish; no longer having to wait for a new format to come out to force the customer to buy the same stuff again.

It seems the customer is wising up and knows that the value of an mp3 isn't the same value of the actual cd and therefore should not have the same price as a cd that takes far more cost and support to get the product to his hands than does the mp3.

The majors don't want to hear that they don't control the market. They don't want to hear they don't control all access to music. Their whole business model is based on artifically high prices, limited quanity of product, and the slave labor payments to artists. If they give up these parts of the model then they are out of business other than what they now hold of the market.

The pesky internet is a big stumbling block in their plans of business as usual. DRM won't float or work if the customer has a choice of whether or not they want it. Naturally any informed customer isn't going to want it.

The customer has become attuned to the prices offered at chain as being the expected price of a cd. Not just in that particular store but any store. When they see a price that is the actual retail "value" they think they saw the same cd, in Walmart for 9.72 and why should they pay that price when they can got there and get two for the price of the one cd they saw on the shelf.

Morons indeed.

A guy I know uses Rhapsody or whatever it is. $10/month and he can listen to all he wants.

Problem 1: Streaming, so there's a load time
Problem 2: Limited library
Problem 3: Additional $0.89 per song if you wish to burn it to a CD. That comes out to a ridiculous amount of money just to burn a CD and that doesn't even include the $10/month.

If they'd stop trying to screw people completely over, they'd get business.

adding to that: Burning 18 songs will cost around $16. Add the $10/month and it can cost as much as $26 to burn a single CD. If you burn many CD's then it will come out to somewhere between $16 and $26. *cough* bullshit *cough*

nevermind the cough. just bs.

*cough* it's all crap * cough* $10 to listen? Radio is free--do they have anything you can't hear on the radio? Then why do you want to pay $10 a month for it?

haha, if you want radio. Go to launch.com atleast there you can choose the song and video you want to see. All it takes is a yahoo account which is free.

yup... Launch.com even let's you watch the video's for free. Not a lot of variety though...

Also, MTV and maybe VH1 have videos online. imagine that.

Are we witnessing results of a boycott??? Hmmmm...