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NPD: Illegal Music File-Sharing Dropped 17% in 2012

26 Feb, 2013 By: Erik Gruenwedel

The number of people using peer-to-peer services (P2P) to illegally download music from the Internet fell 17% in 2012, due to increased availability of free and subscription music streaming sites, according to new data from The NPD Group.

File-sharing of pirated music has been the scourge of the music industry for more than 10 years — peaking in 2005 when one in five Internet users aged 13 and older (33 million people) used P2P services to download music; however, last year that number fell to 11% (21 million people).

The launch of the iPod and subsequent bows of free and subscription music services such as Rhapsody, Spotify and Pandora have slowly changed consumers’ (notably younger) attitudes toward accessing music. Indeed, Apple is rumored to be launching its own streaming service this year.

The volume of illegally downloaded music files from P2P services declined 26% in 2012 from the previous year. Music files burned or ripped from CDs owned by friends and family fell 44%, the number of files swapped from hard drives dropped 25%, and the volume of music downloads from digital lockers decreased 28%, according to NPD’s annual music study.

“For the music industry, last year was a year of progress,” said Russ Crupnick, SVP of industry analysis at NPD. “The increased use of legal and licensed streaming services has proven to be an alternative for music fans who formerly used P2P networks to obtain music.”

In addition to ad-supported and low-cost subscription streaming services and trending music players, Crupnick attributes the music industry’s successful shutdown of Limewire more than two years ago as a turning point in illegal file-sharing. Nearly 20% of P2P users who reduced or stopped their P2P activity cited the fact that that their preferred service was closed, or that the services they used created issues with spyware and viruses on their computers.

“In recent years, many of those who continued to use P2P services reported poor experiences due to rampant spyware and viruses on illegal P2P sites,” Crupnick said.

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