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Report: iTunes Users Like Cloud-Based, Subscription Music

14 Jul, 2010 By: Chris Tribbey

A new study from The NPD Group finds that between 7 million and 8 million of the estimated 50 million iTunes users nationwide would be interested in paying a monthly fee for access to music on multiple devices.

A free, cloud-based option to stream music they already own would be attractive to between 13 million and 15 million iTunes users, NPD estimates, while less than 10 million would be likely to pay a minimum fee of $10 a month to stream all available iTunes music.

“After the service’s launch, user numbers could conceivably rise substantially, as they upgrade to newer connected devices and actually experience the benefits of cloud-based music,” said Russ Crupnick, VP and senior entertainment analyst for The NPD Group. “If the consumers who indicated strong interest in a paid subscription actually adopted one of those services at $10 per month, the market opportunity is close to $1 billion in the first year, which is roughly two-thirds the revenue garnered by the current pay-per-download model.

“We don’t yet know what, if any, effect these services might have on the traditional pay-per-download music model, or whether consumers will ultimately spend more on digital music overall, if or when any of these options eventually rolls out.”

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