What's on your iPod?

More music is being ripped from CDs than downloaded, but multimedia content is taking off, study shows.

We are buying the gadgets, but not the music.

While interest in MP3 players and multimedia downloads is rising, more music is being ripped from CDs than downloaded, according to a study released Thursday by Ipsos Insight.

MP3 player makeup

Twenty percent of Americans over the age of 12 own at least one portable MP3 player. Among teens exclusively, ownership reaches 54 percent, according to the study.

That last figure is something the online media industry should be quite pleased to hear, according to Ipsos analyst Matt Kleinschmit. Multimedia downloads such as TV shows, music videos and are most popular among the under-25 crowd, he said.

But about 44 percent of all music downloaders use their existing CD collections as their primary source of MP3 player content, and 6 percent rip from the collections of others. Only 25 percent use fee-based music downloads, and even fewer use subscription services, the study reported.

"As the music industry starts to look at this, they are realizing that the idea of the CD as the only product is an antiquated one," Kleinschmit said. "A product could be a ring tone, bundled with a song, bundled with a music video--taking a step outside of the CD, and moving into an era where people who are younger have a completely different mind-set."

Many predicted that when fee-based downloads took off, they would be driven by young people. That was not the case; consumers under 25 continued using free file-sharing networks for music downloads, Kleinschmit explained.

Much to the record labels' surprise, the 25-to-34 and 35-to-54 age groups were the initial drivers of music download services, he said. Apple Computer's iTunes store, which sells individual songs as well as full albums, last year outsold retail stores Tower Records and Borders Music.

While people are becoming more used to the idea of not owning a label-produced CD, Kleinschmit explained, they are still tied to the idea of owning their music. Among those who have paid for online music, 67 percent used a download-to-own site. "Only 17 percent of music downloaders have at one point used subscription-based download sites," Kleinschmit said.

The report also found that 6 percent of Americans own more than one MP3 player. Kleinschmit believes that shift signals a change in user understanding and the specific application of MP3 devices in general.

This year's data, which was collected between Jan. 13 and May 2, marks a significant increase in ownership of iPod-like devices. Ipsos' 2005 report showed that 15 percent of Americans owned MP3 players; only 8 percent had one in 2002. A 2005 Pew study placed American MP3 ownership among adults at 11 percent.

Despite a recent slip in the market, , Apple remains the market dominator when it comes to MP3 players. From January through April, Apple held a 77.2 percent share of the MP3 player market, according to U.S. unit sales data from market research firm The NPD Group.

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