Study: Napster boosts CD sales

Jupiter survey says people who use services such as Napster are 45 percent more likely to buy music.
Written by Lisa M. Bowman, Contributor on
Adding to a growing list of contradictory evidence regarding Napster's effects on CD sales, Jupiter Communications Wednesday said that Napster users are more likely to buy music -- not less, as the music industry claims.

The Recording Industry Association of America has sued Napster, claiming the music-sharing network encourages copyright infringement by allowing people to swap songs for free. The RIAA also says Napster use harms the industry by slowing CD sales.

However, the Jupiter study refutes those charges, saying instead that people who use services such as Napster are 45 percent more likely to have increased their music buying than non-users.

"Because Napster users are music enthusiasts, it's logical to believe that they are more likely to purchase now, and increase their music spending in the future," Jupiter analyst Aram Sinnriech said in a statement.

The study's authors urged the recording industry to come up with new ways of incorporating music-sharing networks into their distribution methods instead of trying to quash new technologies through lawsuits. The RIAA filed its latest anti-technology suit Wednesday against Scour Inc., accusing the company of copyright infringement. In addition to Napster, the group also has sued MP3.com Inc. (mppp).

Jupiter surveyed more than 2,200 online music fans about their purchasing habits. The only people who weren't likely to increase their music spending were 18- to 24-year-old "cash-strapped, computer-savvy users" who buy less than $20 worth of music every three months.

Since the RIAA filed suit, each side in the Napster debate has pointed to studies that track CD-purchasing habits to bolster its case. Last month, Yankelovich partners unveiled a study finding that two-thirds of those surveyed were prompted to buy music after listening to a song online.

But that same week, the recording industry released two surveys to support its argument. One found that nearly half of Napster users acknowledged that they used the service instead of buying CDs. The other found that music sales declined in areas that have large numbers of college students, who are big Napster users.

The new Jupiter study criticized the research that the RIAA relies upon, saying it isn't accurate because it doesn't measure the fact that online sales have eaten into local music purchases. "The RIAA did not clarify that the most attrition took place before Napster's launch, and the analysis did not account for channel shift to online transactions that would have occurred independent of Napster's existence," Sinnriech said.

The Napster case heads back to court Wednesday, when the recording industry will ask a federal judge in San Francisco to ban the company from posting songs by major labels until the case is decided.

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