Social networks change music purchasing habits

According to the fourth annual Digital Music Survey from music industry research house Entertainment Media Research and law firm Olswang, 53 percent of respondents surf social sites deliberately looking to discover new music.

Nearly two thirds of respondents say they regularly or occasionally discover new music on their preferred site, even when they’re not looking for it. This is even higher among users of MySpace (75 percent), Bebo (72 percent) and YouTube(66 percent).

This trend is translating into purchasing behaviour: 17 percent of social network users claimed it has a large impact on the way they purchase music and 30 percent state that they regularly or occasionally buy CDs or downloads of music they discovered on a social network site. This rises to 36 per cent of MySpace users.

But more needs to be done to make purchasing music discovered this way easier: 46 percent of respondents agreed with the statement "I wish it was easier to purchase music that I find on these sites."

"The music industry needs to embrace new opportunities being generated by the increasing popularity of music on social networking sites,” says John Enser, partner and head of music at Olswang.

“The process of actually purchasing the music needs to be made easier to encourage sales and develop this new market."

Other results from the research show that the rate of growth in legal music downloading is slowing, while piracy is increasing again after a down-turn last year.

Over the last 12 months the total number of people legally downloading music rose to 58 percent, up 16 percent on last year. Between 2005 and 2006 the rate of increase was 40 percent. Nearly a quarter of legal downloaders admitted that they had not legally downloaded a track for at least six months.

This year 43 percent claimed they illegally downloaded tracks, compared to 36 per cent in 2006 and 40 percent in 2005, saying they are less concerned about being prosecuted.

The report points the finger at two causes for this reversal in the piracy trend: the differential between the price of legal downloads and CD purchase has eroded over the last year; and digital rights management technology is inhibiting consumers.

Sixty-eight percent of respondents said that single-track downloads were only worth purchasing if DRM-free, lending support to EMI's recent decision to release tracks DRM-free in April 2007.

"The music industry must look for more ways to encourage the public to download music legally, says Olswang's Enser. “Variable pricing models and DRM-free music, which would allow consumers legally to transfer music to other devices, were popular among respondents and represent new ways of enticing people away from breaking the law."

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