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Last Updated: Friday, 23 May, 2003, 07:57 GMT 08:57 UK
Positive signs for online music
Person putting CD into CD-ROM
There is life in the old CD yet
People are beginning to pay for music on the net but they are more likely to buy CDs online than individual tracks, research suggests.

But figures from internet measurement firm Neilsen/NetRatings found that free download service Kazaa was still the most popular music site in the UK, followed by sites selling CDs rather than digital downloads.

This will come as welcome news to the music industry which has regarded the online delivery of songs as a threat to the sale of CDs.

But the spectre of free file-swapping sites is still looming over both the music industry and websites trying to make a go of paid-for downloads.

Kazaa wears music crown

Neilsen/NetRatings found that paid-for music download sites are gradually beginning to increase their audiences.

Emusic.com had 165,000 UK users in the first three months of the year.

OD2.com managed to attract 523,000 visitors during April, helped by its second Digital Download Day, designed to introduce people to the concept of paying for music online.

But free file-sharing service Kazaa is still dwarfing the efforts of paid-for websites with an audience of over 1.3 million people in the UK in April alone.

This made it by far the most popular music site in the UK.

Despite the increasing worries of the industry that online music is putting a serious dent in the sales of CDs, the study found that online CD retailers were attracting higher audiences than any of the paid-for download sites.

CD-Wow was the second most popular music site in the UK during April with 739,000 visitors and HMV came in at fourth place with 552,000 visitors.

More challenges ahead

Paid-for music sites face an uphill struggle against both free download sites and CD sellers.

"The problem for paid download sites is that while security, legitimacy and convenience are their main advantages over the file-sharing communities, those advantages are also shared by sites which sell actual CDs," said Tom Ewing, analyst with Nielsen/NetRatings.

There is some hope for paid-for services as music labels such as EMI gradually release the tight grip they have been keeping on their catalogue of popular artists.

And Apple has shown that money can be made from music downloads, with its iTunes venture attracting millions of users.

For the music industry, a new website which claims to have found a legal loophole that allows it to sell music without direct consent is proving the latest in a long line of challenges to its dominance of the distribution of music.




SEE ALSO:
Stars back anti-piracy website
21 May 03  |  Entertainment
Music site faces legal challenge
21 May 03  |  Technology
Apple doubles online music sales
15 May 03  |  Business
File swappers fight back
11 May 03  |  Technology
Germany targets music 'pirates'
07 May 03  |  Entertainment
Students face download damages
02 May 03  |  Entertainment


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