Online Customers Are Good for the Music Business

Music execs must be clicking up their heels!

At one point not so very long ago, music executives thought that digital downloading would be their death knell, and they were locked in legal battles from coast to coast to stop the practice.

But things change.

In much the same way as the movie industry learned to love VCRs (and now DVD players), the music industry is adapting to digital music downloading.

According to Nielsen SoundScan, sales of digital music online continue to climb.

And now a new report from the Digital Media Association (DiMA) asserts that online customers are actually revitalizing the music industry, the whole industry.

Not only did the DiMA survey find that 60% of US consumers report that they are listening to more music since they have gone online, the vast majority of online music service users said that enjoying music over the Internet has expanded their musical tastes, allowing them to discover new artists and explore new musical options.

Nearly seven in 10 online music consumers said they are enjoying new genres of music since listening to online music services.

According to the survey, online music listening has increased overall music discussions with friends and co-workers, with more than 35% now talking about music more often. More than 75% of online music consumers report they have recommended a particular service to a friend or co-worker.

The survey also found that listening to and purchasing music over the Internet increases concert attendance. A full 15% of online music fans said they now attend more concerts.

"These findings demonstrate that real music fans — today's music tastemakers — are online," said Jonathan Potter of the DiMA. "Consumers of innovative online music services are reviving the music economy as they enjoy more music in every way possible."

The survey found that about half of digital music fans are spending more than $200 a year on music, and nearly 30% are spending more than $300.

"Prior to the digital age, someone who purchased six CDs per year — valued at just over $100 — was considered a significant music consumer," said Mr. Potter. "Online music consumers' spending habits, combined with what they are doing to promote and expand music enjoyment, is great for the entire music industry — artists, songwriters and producers."

Online music has the whole industry humming.

For more information on digital entertainment, read eMarketer's US DVR and VOD Usage report.