Pay-Per-Song Still Most Preferred, Study Says

by , 2:15 AM EDT, April 19th, 2005

A la carte pay-per-download services, such as Apple Computer's iTunes Music Store, are still the most preferred services by U.S. consumers, a study by the marketing research Ipsos-Insight said.

The new study showed buyers prefer the pay-per download model. 24% of current downloaders indicated a preference for obtaining music through a fee-based online offering, with an a la carte pay-per-download method most preferred at 19%. 5% preferred an on-demand PC-tethered streaming subscription service.

Downloaders who have experience paying for online music are most pronounced in their preference for pay-per-download methods, the surveyed showed, as 28% of these consumers reported a preference for the a la carte option, 4% for an on-demand streaming PC-tethered subscription-based service, and 8% preferring the new portable subscription service.

"With all of the recent media attention surrounding this rapidly changing market, these findings indicate that many downloaders still prefer a transactional payment structure over one that is subscription-based," said the reports author, Matt Kleinschmit. "This suggests that recently launched portable online subscription services may need to encourage broader adoption through ambitious pricing and promotional or incentive -based acquisition strategies, particularly among those downloaders who have previously only had experience with a la carte fee-based methods."

The study gives credence to comments made last year by Apple chief executive officer Steve Jobs that consumer want to pay per song downloaded and not subscribe to services that charge a monthly fee to listen to a downloaded library.

The report concluded that "there is a potential limitation in rapidly migrating current downloaders to the new method of fee-based online music acquisition, therefore recently launched portable online subscription services may need to encourage broader adoption through ambitious pricing and promotional or incentive–based acquisition strategies."

The survey also found that illegal peer-to-peer file sharing remains an obstacle for the digital music industry. "Over three-fifths of current U.S. downloaders (62%) demonstrated a preference for peer-to-peer file-sharing when presented with a simulated market environment also containing fee-based subscription and pay-per-download channels," the report said.