1

Digital Music Survey

Prepared for Demos: 19th October 2009

2

Background & Methodology

• 1,008 online interviews conducted in October 2009 amongst GB adults aged 16-50 years

• Representative of online population

• Covering:

– Awareness and usage of official digital music services

– Awareness, usage and attitudes towards file-sharing websites used to access music

– Barriers to using illegal file-sharing websites for accessing music

– Potential actions to deter the use of illegal file-sharing services

– Interest, drivers and barriers for subscription to digital music download service

3

Definitions

• All adults

– GB adults aged 16-50 years representative of online population

• Official services

– the main official music services (e.g. YouTube, iTunes Store, internet radio)

• Unofficial services

– peer-to-peer/file-sharing websites/BitTorrent/Limewire or Rapidshare or Google/other search engines

to find albums/tracks to download for free

• File-sharing/search engine users

– all using unofficial services as listed above

• Illegal downloaders

– file-sharing/search engine users downloading without the permission of the copyright holder

• File-sharing/search engine users but NOT illegal

– file-sharing/search engine users who say they do not download without the permission of the

copyright holder

4

Summary (1)

• Widespread use of legal internet services to download and stream music (and watch music videos)

– 7 in 10 (69%) use one or more of the main official music services – most commonly YouTube, iTunes Store and internet radio

• Key motivators for legal music services are ease of use, convenience and listening while using a computer

• A third of adults use file-sharing sites such as BitTorrent or Rapidshare to access music or use Google and other search engines to find albums/tracks to download for free

– however, only 9% of adults specifically admit to downloading music illegally (without copyright holder’s permission)

• Those who download music illegally typically also pay for music and use official internet services for music and other content

– two-thirds also access other content (movies/games/software) illegally

• The availability of new, appealing legal services and various punitive measures would encourage those downloading music illegally to stop

5

Summary (2)

• Apart from those downloading illegally, almost all believe it is not ‘fair use’ to file-share tracks that you have paid to download

• Those who do not download music illegally say it is because they have concerns about the legal consequences, they worry about viruses and have moral objections to it

• There is a high level of interest in an official paid music download subscription service– Overall, 47% interested (this rises to 72% amongst those who download music illegally)

– Key features would be appealing price and content, plus ability to transfer to all their music devices

– Revenue will be maximised at around £5 per month subscription fee

6

Official servicesSection 1

7

65%

16%

30%

33%

74%

Bought anymusic onCD/vinyl

Paid to downloadan album

Paid to downloadtracks

Paid to downloadalbum/tracks

(net)

Bought anymusic (net)

10%

19%

47%

23%

32%

25%

39%

26%

17%

18%

10%

8%

8%

7%

Less than £10 £10-£19 £20-£49 £50-£99 £100+

Q1b/Q1c Which, if any, of the following have you done in the past 12 months? How much have you spent on music in the past 12 months in each of these ways?

7

% buying music in last year

Amount spent on music in last year (amongst those using each method)

Music bought in the last 12 months (amongst all adults)

£51

£41

£24

Mean

Three quarters of adults have bought music in the last 12 months• A third have paid for downloads of albums or tracks

Base (n=1,008)

8

50%

27%

22%

13%

12%

9%

9%

7%

5%

4%

45%

66%

55%

70%

68%

33%

68%

67%

28%

75%

22%

38%

5%

7%

23%

17%

20%

58%

22%

26%

66%

21%

76%

59%2%

2%

YouTube

Download tracks/albums - iTunes Store

Internet radio

MySpace

Download tracks/albums - Amazon.com

Spotify

Music podcasts

Download music - Nokia music store

last.fm

Napster

7digital

eMusic

Use Heard of Not heard of

Q2a/Q3b-c Which of the following, if any, have you heard of or do you personally use for music? Which Spotify service do you use? Which last.fm service do you use?

8

Half of all adults access YouTube for music / music videos• Over a quarter have paid for downloads of albums or tracks from iTunes store

Awareness and usage of official music services (amongst all adults)

last.fm users: 90% use free service

Spotify users: 91% use free service

69% use one or more of these services…

Base (n=1,008)

9

69% 70% 67%

79% 76% 76% 78% 81%74%

57%60%

63%

0%

20%

40%

60%

80%

100%

Total Male Female 16-24 25-34 35-50 Male16-24

Male25-34

Male35-50

Female16-24

Female25-34

Female35-50

Q2a Which of the following, if any, have you heard of or do you personally use for music?

Usage of any official music services by age and gender (amongst all adults)

Over two-thirds of adults use any of the main official music services•16-24 years olds, particularly females 16-24, are more likely to use these services

Base (n=1,008)

1010

Q4/Q3b/Q3c Please indicate why you use each of these services to access music.

Total(Average) YouTube

iTunes Store

Internet radio MySpace Amazon

Spotify (free)

Music podcasts

Nokia music store

Last.fm (free) Napster

n=497 n=275 n=219 n=136 n=115 n=82 n=89 n=65 n=45 n=44

Easy to use 54% 62% 60% 58% 53% 51% 75% 41% 40% 64% 32%

Convenient 51% 57% 63% 53% 47% 48% 72% 51% 37% 54% 26%

Able to listen while using my computer 48% 59% 40% 60% 47% 27% 78% 42% 32% 65% 27%

The range of music available 40% 46% 54% 28% 31% 46% 68% 26% 25% 41% 38%

To hear new music wouldn’t normally hear 35% 44% 19% 29% 44% 17% 60% 37% 23% 56% 19%

To save money 33% 34% 23% 23% 27% 37% 63% 31% 19% 38% 33%

Listen using my mobile /iPod/MP3 player 28% 15% 62% 10% 14% 45% 5% 43% 41% 18% 31%

Best service of this kind 23% 22% 28% 20% 16% 16% 48% 15% 16% 26% 25%

Get recommendations for music I might like 23% 26% 17% 15% 33% 15% 35% 18% 9% 44% 19%

Nowhere near to buy CDs with music I like 14% 10% 21% 10% 15% 20% 11% 13% 12% 17% 15%

Social networking options 13% 20% 4% 6% 50% 6% 3% 4% 7% 21% 12%

None of these 6% 4% 4% 8% 5% 4% 1% 11% 7% 2% 18%

Reasons for using official music services(amongst users of each official service)

Key motivators are ease of use, convenience and listening while using a computer• Spotify scores strongly on these key features

7digital and eMusic bases are too low to analyse

Which Spotify service do you use? Which last.fm service do you use?

11

Unofficial services

Section 2

12

14%3%

24%33%

62%

6%

Peer-to-peer(P2P) / file

sharing sites /BitTorrent /Limewire

Rapidshare Google/othersearch

engines – tofind

albums/tracksto download

for free

Use any ofthese

'unofficial'services (Net)

None of these Don’t know

Q6 Thinking now about other services that are available, which, if any, of the following do you use to access music?

15% net used P2P / Rapidshare

Usage of ‘unofficial’ music services(amongst all adults)

A third of adults use one or more ‘unofficial’ music service• A quarter have used Google or another search engine to find free album/tracks

Base (n=1,008)

13

69% 70% 67%

79% 76%

60%

76% 78%

63%

81%74%

57%

33% 34% 31%

45%38%

23%

43%37%

28%

47%40%

19%

0%

20%

40%

60%

80%

100%

Total Male Female 16-24 25-34 35-50 Male16-24

Male25-34

Male35-50

Female16-24

Female25-34

Female35-50

Official Unofficial

Q2a Which of the following, if any, have you heard of or do you personally use for music? Q6Thinking now about other services that are available, which, if any, of the following do you use to access music?

Over two-thirds of adults use one or more official service vs. a third using unofficial services

Usage of official and unofficial music services(amongst all adults)

•16-34 years olds, particularly females 16-24, are more likely to use these unofficial services

Base (n=1,008)

14

10%16%

47%

8%11% 9%

Buy a lotmore music

Buy a littlemore music

Buy about thesame

Buy a littleless music

Buy a lot lessmusic

Don’t know

26% buying more (net)

93% have bought CDs/ vinyl or paid for downloads in the past 12 months

-78% bought CDs/vinyl

-54% paid for downloads

Impact of using unofficial music services(amongst all file-sharing/search engine users)

A quarter of those using unofficial services claim to buy a little/lot more music as a result•10% claim to buy a lot more music

Base (n=325)Q7a Does using these services for music mean that you….?

15

Unofficial services - illegal downloadersSection 3

16

28%

46%56%

22%

Overall (P2P) users Rapidshare users Google/other searchengines

Downloading illegally(amongst all using unofficial music services)

Rapidshare and P2P users are more likely to admit downloading music illegally (without permission of the copyright holder)

Base (n=325)Q7b Thinking now about other services that are available, which, if any, of the following do you use to access music?

17

62%

6% 9%

21%

2%

DON'T use unofficialservices

Don't know if useunofficial services

Illegal downloaders File-sharing searchengine users but

NOT illegal

USE unofficialservices but prefer

not to answer aboutpermission of

copyright holder

Downloading illegally(amongst all adults)

9%

10%8%

11%13%

6%

15%14%

6%7%

13%6%

9%14%

5%

Total

MaleFemale

16-2425-3435-50

Males 16-24Males 25-34Males 35-50

Females 16-24Females 25-34Females 35-50

Broadband up to 8MbBroadband greater than 8Mb

Don't know speed

One in ten of all adults admit downloading music illegally• Males 16-34 are most likely to admit doing this

Q6/Q7b Thinking now about other services that are available, which, if any, of the following do you use to access music? Base (n=1,008)

18

Characteristics of illegal downloaders

• Slight male bias (57% male)• 7 in 10 aged under 35• 9 in 10 own an iPod/iPhone or other mp3 player

(including mp3 phones)• Active music buyers, with 8 in 10 buying CDs/vinyl or downloads in the

past 12 months– two-thirds have bought CDs spending an average of £75 each

• Just over half have home broadband speed at over 4Mb• 9 in 10 use at least one of the main official internet music services• High usage levels for internet services such as YouTube (87%), catch-up

TV (72%) and Skyplayer (24%) • Two-thirds also access other content (movies/games/software) without

permission

Base (n=88)

Amongst all those downloading illegally...

19

Q7c Thinking about your use of these services to access music without the permission of the copyright holder, what reasons would you give for using these rather than commercial legal services that are already available?

19

46%

42%

32%

27%

27%

25%

20%

19%

9%

9%

Because I can / it’s available

I like to try things out before I decide whether to buy them

I can find things that I can’t find on commercial legalservices

I don’t have enough money to pay for the music that I want

Because lots of people I know do the same

I’ve already bought the things I download on CD/vinyl

I spend enough money already on music already

I don’t see anything wrong with doing it

Nobody ever gets caught / fined for doing it

I don’t care about copyright

• 42% like to use them to try out new music and a third look for music not available elsewhere

Reasons for downloading illegally(amongst illegal downloaders)

Just under half say that they download music illegally ‘because they can’

Base (n=88)

20

65% 65%

44%

69% 73%

Total DON'T useunofficialservices

Don't know if useunofficialservices

File-sharing/search

engine users butNOT illegal

Prefer not toanswer aboutpermission of

copyrightholder*

Q7D Were you aware before today that services such as peer-to-peer (P2P) or file sharing sites are used by some people to distribute music illegally without the permission of the copyright holder?

Awareness of music being shared illegally(amongst all except illegal downloaders)

Awareness of music being shared illegally is highest amongst those who use ‘unofficial’ sites but claim not to access illegal content (or choose not to answer)

*caution: low base

Base (n=920)

21

Q8 How likely would the following be to encourage you to stop accessing music without the permission of the copyright holder?Q9b How likely do you think the following would be to encourage people who have accessed music without the permission of the copyright holder to use legal music services instead?

21

64%

61%

61%

58%

57%

44%

41%

33%

25%

23%

61%

70%

73%

54%

55%

26%

54%

24%

17%

22%

The availability of new appealing legal music services

The threat of having your internet service suspended forone month

The threat of receiving a fine

Concerns about getting a virus/spyware

Receiving a warning letter from your Internet ServiceProvider (ISP)

The threat of your internet speed being reducedsignificantly for one day

The threat of your internet speed being reducedsignificantly for one month

The threat of having your internet service suspended for anhour

Publicity about the impact on the music industry

Disapproval of friends and family

ILLEGAL DOWNLOADERS: Reasonsfor stoppingAll EXCEPT illegal downloaders:Perceived reasons for users to stop

Reasons that would encourage people to stop using unofficial services for accessing music without permission

• 73% of non-users think the threat of receiving a fine would deter users

Base (n=920)Base (n=88)

The availability of new, appealing legal services and various punitive measures would encourage those downloading without permission to stop

22

62%

61%

43%

28%

29%

16%

11%

20%

2%

3%

44%

40%

41%

29%

24%

19%

11%

7%

5%

2%

Concern about legal consequences

Worried about viruses/spyware

Believe it's morally wrong

Prefer to buy CDs/not digital music

Better legal services

Not interested in music

Don’t know how to

Friends/family disapprove

None of these

Don’t know

File-sharing/search engine users but NOT illegal

DON'T use unofficial services AT ALL

Q9 Which, if any, of the following reasons for NOT using these services to access music without the permission of the copyright holder apply to you? Please select all that apply.

Reasons for not downloading music without permission(amongst all except illegal downloaders)

The main barriers to downloading without permission are legal concerns, worries about viruses and moral objections

Base (n=556)

23

45%

35%

32%

21%

19%

5%

10%

18%

47%

36%

13%

12%

11%

14%

10%

9%

51%

39%

30%

25%

23%

5%

9%

14%

43%

35%

37%

22%

19%

3%

11%

19%

Encourage growth of legalwebsites/services

Reform copyright laws

Order ISPs to disconnect offenders

Order ISPs to restrict the internetspeed of offenders

Lead education campaign

Introduce tax on internet service

None of these

Don’t know

All adultsIllegal downloadersFile-sharing/search engine users but NOT illegalDON'T use unofficial services AT ALL

Q9C What role, if any, do you see for government in encouraging people to only use legal ways of downloading music?

How the role of government is perceived(amongst all adults)

Encouraging the growth of legal websites/services is seen as an appropriate role for government across all segments

Base (n=1,008)

• Non-users are more likely to also see the role of government to enforce ISPs to take action against offenders

24

69%

32%

26%

21%

6%

6%

6%

16%

72%

37%

32%

29%

18%

28%

1%

3%

67%

38%

31%

21%

8%

5%

6%

14%

71%

29%

24%

20%

4%

3%

7%

17%

Transfer to different music players

Produce/share own remixes

Give copies to friends/family

Sell old mp3s

Put music on website for others

Put music on a P2P service forothers

None of these

Don’t know

All adultsIllegal downloadersFile-sharing/search engine users but NOT illegalDON'T use unofficial services AT ALL

Q10 What do you consider to be FAIR USE of the music that people have paid to download from legal sources?

Consideration of what is ‘fair use’ for paid music downloads(amongst all adults)

Base (n=1,008)

Apart from those downloading without permission, very few believe it is ‘fair use’ to file-share tracks that you have paid to download

25

81%

40%

31%

25%

5%

4%

3%

8%

63%

28%

24%

19%

7%

7%

7%

20%

Transfer to different musicplayers

Produce/share ownremixes

Give copies tofriends/family

Sell old mp3s

Put music on website forothers

Put music on a P2Pservice for others

None of these

Don’t know

All who pay to downloadtracks/albums

All who DO NOT pay to downloadtracks/albums

Those paying for downloads have a wider perspective on what is deemed ‘fair use’ of paid downloads

Consideration of what is ‘fair use’ for paid music downloads(amongst all adults)

Q10 What do you consider to be FAIR USE of the music that people have paid to download from legal sources? Base (n=1,008)

26

QC2b Which, if any, of the following do you do on your computer at home? Please select all that apply

Regular activities on computer(amongst all adults)

Only illegal downloaders show any sign of actions specifically designed to hide their activities such as changing their IP address

Base (n=1,008)

78%

48%

45%

44%

41%

14%

2%

2%

1%

7%

2%

78%

53%

52%

49%

40%

19%

3%

5%

3%

5%

0%

71%

51%

54%

54%

43%

28%

7%

7%

9%

2%

1%

I use a firewall/virus protection

I regularly clear my temporary internet files

I regularly clear my internet history

I regularly clear my cookies

I don't share files with other internet users after I have downloadedthem

I store the files I download on a separate hard drive

I use a proxy server to remain anonymous

I access someone else's wireless internet service using my computer

I use special software to change my IP address

None of these

Don't know

All adultsUse unofficial music servicesIllegal downloaders

27

Interest in digital musicconcepts

Section 4

28

66%

28%

Interested

Not interested

Interest in downloading tracksfor portable devices

Two-thirds of adults are interested in paying to download individual tracks over the internet

Amongst those aged 16-24

75%

Amongst illegal downloaders

80%

Amongst those who have paid for downloads

91%

Q11a Assuming the price and choice of tracks were appealing to you, how interested would you be in the following way of accessing music from LEGAL sources? Base (n=1,008)

29

66%

28%

Interested

Not interested

2%11%

66%

54%46%

38%28%

20%

0%

40%

£0.15 £0.30 £0.45 £0.60 £0.75 £0.90 £1.05

PricedInterest

£ Revenue Curve

The optimum price for revenue from downloading individual tracks is 45 pence

Interest in downloading tracksfor portable devices

Q11b At what price would you consider the following to be TOO EXPENSIVE for you to be interested?

Q11a Assuming the price and choice of tracks were appealing to you, how interested would you be in the following way of accessing music from LEGAL sources?Base (n=654)Base (n=1,008)

30

47%

47%

Interested

Not interested

Interest in a monthly subscription service is high, particularly amongst illegal downloaders

Pay subscription fee unlimited downloads

Amongst those aged 25-34

58%

Amongst those who have paid for downloads

62%

Base (n=1,008)Q12a Assuming the price and choice of tracks were appealing to you, how interested would you be in the following way of accessing music from LEGAL sources?

Amongst illegal downloaders

72%

31

I wouldn’t use it enough 47%I would rather pay for tracks 36%I would prefer a CD 34%I like to have the packaging /case 20%I prefer shopping in stores 16%I don’t want to pay 15%

Barriers to entry

47%

47%

Interested

Not interested

5%9%16%

26%37%

47%

2% 1%0%

40%

£2.50 £5.00 £7.50 £10.00 £12.50 £15.00 £17.50

PricedInterest Pay subscription fee

unlimited downloads

£ Revenue Curve

Revenue will be maximised at a subscription fee of around £5 per month

Q12b At what price would you consider the following to be TOO EXPENSIVE for you to be interested? Base (n=458)

Q12a Assuming the price and choice of tracks were appealing to you, how interested would you be in the following way of accessing music from LEGAL sources? Base (n=1,008)

32

73%

66%

62%

55%

37%

29%

12%

8%

9%

7%

20%

27%

30%

36%

47%

49%

41%

27%

22%

23%

21%

4%

5%

4%

6%

12%

17%

33%

40%

38%

41%

39%

2%

4%

11%

22%

27%

25%

30%8%

An appealing price

Can transfer to different players in household

Contains music relevant to tastes

No restriction on amount download each month

Access to music that would otherwise be hard to find

Discover new music

Ability to recommend music to friends that they can access

Opportunity to buy other merchandise

Tools that enable you to remix the music yourself

Facility to communicate with artists

Able to connect with others/social networking

Very important Fairly important Not very important Not at all important DK

Q12c Thinking about what would make such a service appealing to you, how important would the following features be to you if you were considering subscribing to this type of service?

32

Importance of features for a monthly music subscription service(amongst all interested in concept)

Features ‘very important’for illegal file-sharers:Price: 66%Transfer to players: 51%No restrictionon downloads: 51%

Motivators for using a monthly subscription service for music downloading include an appealingprice, transferability to other music players and offering a selection of relevant music

Base (n=458)

33

Appendix

34

75%

64%

60%

48%

25%

18%

11%

8%

5%

24%

35%

37%

51%

72%

72%

69%

74%

84%

3%

3%

10%

20%

18%

10%

1%

1%

1%YouTube

Freeview

TV catch up websites

Sky

Virgin Media

Lovefilm

Skyplayer

Freesat

BT Vision

Used in past 12 months Heard of, but not used in past 12 months Not heard of

Q1a Which of the following, if any, have you heard of or have you personally used in the past 12 months?

34

High levels of usage for YouTube and catch-up TV servicesAwareness and usage of entertainment services(amongst all adults)

Base (n=1,008)

35

19% 15% 10%25%

38%29% 27% 28%

75%17%

18%16% 18%

24%34% 41% 40%

2% 4% 4% 3%

12%

Movies TV series Software (excl.games)

Games Music

Prefer not to answer

No – and I have neverconsidered it

No – but I haveconsidered it

Yes - occasionally

Yes - frequently

35

Q7c2 Apart from music, which other content, if any, have you accessed using these services without the permission of the copyright holder?

Other types of unofficial downloads(amongst illegal downloaders)

57% 44% 39% 38%Netusers…

Around two-thirds of illegal downloaders also access other content types without permission

66% doing one or more of these (net)

Base (n=88)

36

UK Online Population

All file-sharing / search engine

users

All illegal downloaders

All file-sharing / search engine users but NOT

illegal% % % %

GenderMale 50% 53% 57% 50%Female 50% 47% 43% 50%

Age 16-24 25% 34% 31% 35%25-34 26% 30% 38% 27%35-50 50% 36% 31% 38%

Gender/AgeMales 16-24 12% 16% 21% 14%Males 25-34 14% 15% 21% 13%Males 35-50 25% 21% 15% 23%Females 16-24 12% 18% 10% 21%Females 25-34 12% 15% 18% 14%Females 35-50 25% 15% 15% 16%

IncomeLess than £25,000 33% 34% 42% 31%£25,000 or more 57% 54% 55% 55%Refused 10% 12% 3% 15%

Demographic profile of key groups

Source: S1/S2/S3 Are you.....? Please type in your age. Which of the following shows your total household income per year from all sources, before tax and other deductions? Base (n=1,008)