Net music fans would pay for albums, study says

Despite the recording industry's fears of copyright violations on the Internet, a new study shows that online music fans would be willing to buy albums off the Web.

Jim Hu Staff Writer, CNET News.com
Jim Hu
covers home broadband services and the Net's portal giants.
Jim Hu
3 min read
Despite the recording industry's fears of copyright violations on the Internet, a new study today says that online music fans would open their wallets for access to their favorite songs or albums.

The study, conducted by market research firm CyberDialogue, showed that 29 percent of people who download music would buy entire albums off the Web for $10 apiece.

In addition, the study said nearly 11 million online music buffs would have an "interest" in paying a monthly subscription fee to download their favorite tunes. This finding could shed new light on Web business models, given the failures of Microsoft's Slate and TheStreet.com in instituting subscriptions to their sites.

"This shows that the intensive music user who also downloads music from the Web is ready to pay for music on the Web," said Idil Cakim, an analyst at CyberDialogue.

Cakim added that the findings may further dispel the music industry's fears that the Internet could prove damaging. Rather, Cakim said the Internet more accurately "grows the demand for the music market."

Further indications that Web consumers are willing to spend money for music may be a boon for the recording industry. Record companies and artists have recently taken legal action against Internet music companies such as MP3.com and Napster for allegedly violating copyrights and promoting piracy of their works.

But the "Big Five" record labels--Warner Music, BMG Entertainment, Universal Music Group, Sony Music and EMI Music--are recognizing the Internet's benefits to their businesses. Some are planning to open their music vaults to Internet users in an attempt to capitalize on the popularity of downloading music.

In May, EMI announced it would make 100 of its albums and 40 singles available for download off undisclosed online retail sites this summer. Works from Janet Jackson, Pink Floyd, Frank Sinatra, the Spice Girls and Tina Turner will be included in the offering.

BMG and Sony Music have both announced their intentions to provide digital music downloads. Seagram's Universal Music Group said it plans to launch a secure download format that will eventually allow people to download most of the label's songs.

While the music and technology industries are Napster wildfiresteadily finding common ground to work together, fears of copyright violation have sparked a number of high-profile battles. Recording artists such as Metallica and Dr. Dre are suing Napster in connection with the widespread piracy of their work. The artists have also fingered hundreds of thousands of people who have made their works public online without consent.

Meanwhile, online music site MP3.com is embroiled in a lawsuit filed by the Recording Industry Association of America (RIAA), alleging copyright violations from the company's My.MP3.com, which gives users access to digital copies of their CDs. However, MP3.com may be close to settling the lawsuit with the major labels, according to published reports.

Even though the recording industry has been quick to throw the book at technologies it deems illegal, today's study concludes that music downloads still serve an enormous benefit to record companies and artists. Whether these songs are obtained legally or illegally, more exposure to music online could further the record industry's online ambitions.

"Even if they're getting it for free?there are great opportunities for record companies and artists to cash in on the consumer demand," CyberDialogue's Cakim added.