As CD-purchasing declined, Apple’s iTunes continued to strengthen its position as the dominant digital music destination, widening its lead in user awareness over other digital music sources, including MySpace, according to Ipsos’s TEMPO Digital Music Brandscape study.
The fourth annual TEMPO Digital Music Brandscape study examines fee-based online music brands and is part of TEMPO, an Ipsos quarterly study of digital music behaviors.
iTunes Expands Lead
Among the key findings from the Brandscape study:
- Total awareness increased across the board in 2007, with 82% of all US downloaders – fee-based users and filesharers – now aware of iTunes and 76% aware of Napster.
- iTunes, in particular, gained in both aided and unaided awareness, with well over one-third (38%) of downloaders now thinking of the brand on a top-of-mind basis.
- Awareness increased significantly for most brands – but, for many, usage did not:
- Past-30-day usage decreased for Walmart.com and Rhapsody, and remained stagnant for most music services.
- The clear winner in 2007 was iTunes: Its recent usage increased significantly, to 24% past-30-day-usage among total US downloaders, up from 18% in 2006.
- A significant development was the decline of MySpace.com. Contrary to encouraging developments in 2006, MySpace’s perception ratings declined in 2007 across several attributes. Moreover, the service is no longer as closely associated with allowing users to exchange ideas and recommendations.
“It has become clear that iTunes’ saliency has now reached beyond that of being ‘just’ the top brand presence to being the pre-eminent brand in digital music,” said Karl Joyce, senior research manager at Ipsos Insight and author of the TEMPO study. “Even more telling than awareness and usage, iTunes favorability clearly demonstrates the value of the brand.”
Fee-Based ‘Best Brand’ Position Solidified
As has been seen in past waves of TEMPO research, strong name recognition has not automatically led to perceptions of leadership within the fee-based digital music community, according to the data:
- An emerging majority (50% of downloaders aware of more than one site) consider iTunes the best fee-based digital music service (up from 41% in 2006 and 33% in 2005).
- However, second-place Napster is rated “best” by just 10% of the downloader market, a figure that did not change from 2006 levels and has yet to eclipse the previous high of 22% in 2005.
- iTunes’ 2007 ascendance as ‘best brand’ generally came at the expense of the other top brands, each of which experienced directional declines.
“iTunes’ steady gain as ‘best’ brand over the past three years does denote a threat to other digital music services, particularly due to the persistent lack of interoperability,” Joyce said. “While iTunes’ growth in 2006 may have come at the expense of Napster, other brands have begun to feel its impact as well, including other top competitors such as Rhapsody and Yahoo Music. Moreover, social networking’s hope of overtaking the lead in mainstream digital music acquisition appears to have fallen short.”
Bundled Service Offerings a Potential Market
In 2007, TEMPO investigated receptivity to music bundles among fee-based downloaders:
- Multiple-track offerings are the clear winner with nearly two-thirds (64%) of these downloaders interested in discounted multi-track offerings.
- Although there is niche appeal for combinations that couple tracks with other content such as ringtones, these offerings are not as well received in the market.
- Beyond multiple track offerings, higher quality tracks without usage restrictions (i.e., Digital Rights Management, or DRM, software) are popular as well.
- Despite significant interest, very few downloaders have ever purchased a bundle.
“These findings support the persistence of untapped market opportunities in the digital music space, specifically in that of price-competitive offerings such as discounted bundles,” said Joyce.
“Despite iTunes’ dominance, the market continues to offer potential growth and inlets for competing brands. Consumer expectations of digital music services have not changed all that much over the past several years, and one of the attributes that resonates time and again is price. Given the strong interest in discounted bundles, the critical question is not whether they should be offered, but what types of bundled discounts would encourage increased spending by would-be single-track downloaders without cannibalizing digital album purchase by others.”
About the study: Data on music downloading behaviors was gathered from TEMPO: Keeping Pace with Digital Music Behavior, a quarterly shared-cost research study by Ipsos Insight examining the ongoing influence and effects of digital music in the US. Data for were collected between September 10 and 17, 2007, via a web-based representative sample of 1,826 US Downloaders age 12 and over.