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Napster nukes CD sales

Through cdnow.com at least, claims survey

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Napster - like home taping in the 80s - is killing music. At least that's what the music industry is going to start hollering once it gets hold of market researcher PC Data's latest numbers.

PC Data's latest survey of the buying habits of some 120,000 US home-based Net surfers shows that Napster users soon cut the number of albums they buy, once they get proficient at downloading songs from the MP3 sharing service.

The company measures sales through online stores. It found that "new Napster users are just as likely to purchase music at cdnow.com after initially downloading Napster software. However, 90 days after downloading Napster software, consumers' online music purchases plummet".

That said, users do visit e-tailers more frequently, even though they're less likely to buy things. The reason? "Apparently, Napster users visit online retailers to get information about music, and then use Napster to download the music free of charge," according to PC Data CEO Ann Stephens.

The music business, represented by the decidedly anti-Napster Recording Industry Association of America (RIAA), is going to love this. It's been arguing all along that services like Napster harm music sales. Pro-Napster groups have always claimed that the reverse is true, that use of the software encourages listeners to try new artists and genres, which in turn increases CD sales.

PC Data's numbers suggest both arguments are valid, but that ultimately the common-sense claim that if music fans can get good songs for free from Napster, they won't pay for a copy on CD, is proving itself true. ®

PC Data's Napster sales stats

  % Visiting
cdnow.com
% of Visitors Buying
from cdnow.com
Month Prior to Using Napster 10.4% 8.3%
First Month Using Napster 25.6% 8.4%
Second Month Using Napster 24.8% 8.9%
Third Month Using Napster 20.0% 5.7%
Fourth Month Using Napster 18.5% 5.5%


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