Study Finds Napster Spurs Music Purchases

Contrary to the apparent belief of the Recording Industry Association of America, Napster and other music-sharing technologies are actually spurring music sales, according to a recent report by Jupiter Communications. Users of these technologies are 45 percent more likely to have increased their overall music purchasing than non-users are, the study says.

"Because Napster users are music enthusiasts, it's logical to believe that they are more likely to purchase now, and increase their music spending in the future," explained Aram Sinnreich, an analyst with Jupiter. "But when we conducted our consumer survey, controlled for key music purchasing factors -- such as existing spending level, age, income, gender, and online tenure -- we still found that Napster usage is one of the strongest determinants of increased music buying."

The report concludes that "record companies must refocus their strategy from litigation to adoption, and incorporate networked music sharing into their distribution channels."

Since the launch of sites and software such as Napster and Gnutella, record labels and intellectual property owners have demonized networked music sharing, even as it has gained enormous traction among consumers. However, these players have yet to capitalize on the upside of such sharing technology.

"An inherent flaw in the Recording Industry Association of America argument against Napster is that the association's supporting research shows a decline in record sales in college areas, with high Napster usage," said Sinnreich. "However, the RIAA did not clarify that the most attrition took place before Napster's launch, and the analysis did not account for channel shift to online transactions that would have occurred independent of Napster's existence."

The Jupiter Consumer Survey queried more than 2,200 online music fans on whether the money they spent on music purchases had increased, decreased or remained the same since they began visiting music destinations on the Web. Jupiter analysts report that only cash-strapped computer-savvy users, aged 18 to 24, who spend less than $20 on music within a three-month period indicated that they were likely to remain at a constant purchasing level despite online music use.