So this report got a lot of attention in the media, which shows how much interest there is in the topic. However some of the coverage has been quite selective in which parts it has highlighted and some have even used it as evidence for Apple-bashing. So for the record here are the key thrusts of the report (all of the below refer to Europe):
MP3 player owners of all types (iPods included) don’t regularly buy much digital music. iPod owners are actually more likely to buy digital music than other MP3 player owners
Free online music consumption significantly outweighs paid, significantly more so for owners of non-iPod MP3 players
Device owners are much more likely to buy CD albums online than digital albums
So the conclusions are that Europe’s digital music market is doing ok but there is much more opportunity to tap. As Card will readily point out a significant share of the population don’t buy any music, so we’d never expect saturation purchasing. However MP3 player owners are – largely – by definition music fans are more likely to buy music. Is expecting a third of MP3 player owners to buy digital music regularly overly ambitious? I’d like to think not, yet that would be close to a doubling of current adoption rates.
Finally, free (especially illegal free) is much more of a problem here in Europe than in the US, where it seems to have been contained. Some markets (e.g. Germany) are seeing steady declines but others are seeing continued growth. So what we are trying to highlight here for the entire music industry (device manufacturers and digital stores included) is that digital music activity is significantly higher than paid: that is an opportunity, not just a threat.
Anyway, those are the key points, take a look through the report if you want more detail. If you are a Jupiter client and would like to talk more about the issues raised in this report then please set up a call with me via your CSM.