While Apple dominates the world of music-on-the-go, its recent sales rates point toward a larger trend. According to Ipsos Research, the number of paying music downloaders increased 150 percent in the first half of 2004, with an estimated 20 million Americans now paying for their music downloads.
The iTunes music downloading Web site works exclusively with the ever-popular Apple iPod. Rather than limiting the company's growth by excluding all other MP3 players, iTunes is ranked the number one music download store according to Nielsen SoundScan. Nielsen SoundScan is an information system that tracks the sales of music and music video products in the United States and Canada and is the source of the Billboard music charts.
"When we launched the iTunes Music Store we were hoping to sell a million songs in the first six months," said Apple CEO Steve Jobs. "Now we're selling over a million songs every day, and we've sold over a quarter billion songs in total."
Apple's iTunes takes credit for about 65 percent of all legal downloads, but it is far from alone as a digital music source. In addition to exclusive on-line music stores like iTunes, music fans can download songs from the Web sites of retail outlets such as Wal-Mart and Best Buy, and pre-paid digital music gift cards are available at most media, multipurpose, and electronic stores.
Moreover, Napster reported that its subscriber growth increased by 50 percent by the end of last year, with 270,000 paid subscribers. This is quite a change from the Napster of 2001, when the original peer-to-peer file sharing service peaked with 13.6 million users in February of that year. However, later that year, the courts decided that what Napster facilitated was illegal -- an infringement of copyright protection -- and ordered the company to shut down.
The current Napster website recently launched a subscription-based unlimited monthly service called Napster To Go in an effort to offset the power of the 99-cent downloads from iTunes.
"Ninety-nine cents is an emotional price point," Ron Roecker, vice president of communications for The Recording Academy, told United Press International. "It's less than a dollar and people are willing to pay that. It might be hard to get people to pay more than a dollar for a track, but people are willing to pay a subscription fee if they can still get what they want."
Roecker said music fans want variety, ease, and accessibility. In short, the many young people who download music from the Internet don't want to have to leave their rooms to get what they want.
"The 12 to 24 year old music fans are really key because they have embraced technology and music really defines a large part of their lives," Roecker said. "From their perspectives, it's time for the industry to embrace technology too."
The Recording Academy launched a music downloading educational campaign last year during the Grammy Awards called "What's the Download?" in order to inform the public and forge a dialogue between music fans and music makers on the issues of music downloading.
This year What's the Download facilitated a round table discussion between 12 young adults from across the country, rapper/producer Kanye West, funk band Earth, Wind & Fire, Sugar Ray front-man Mark McGrath, and new singer JD Natasha.
"There's never been a chance for music makers and music fans to sit down at a table and discuss this issue," Roecker said.
The inaugural Interactive Advisory Board will serve for one year and discuss their diverse views on music downloading and file-sharing.
While many consumers are willing to pay for digital music, there are still those who believe music should be shared widely and freely as a means of artistic expression or self-promotion.
According to research by Pew Internet and American Life in May 2004, artists are split on whether free downloading on the Internet has hurt or helped their careers. While 35 percent say file-sharing services are not bad because they help promote and distribute artists' work, 23 percent say file-sharing is bad because it infringes on an artist's copyright and ability to make money from their work, and 35 percent agree file-sharing is both good and bad.
"Because we represent 18,000 artists, we wanted to be objective and give people the opportunity to see what their favorite music maker's stance on the issue is," Roecker said.
For example, singer Joss Stone said she would download music illegally if she were not in the music industry.
"I totally understand why people do it. If you can get something for free and it sounds great, then why not?" Stone said, as reported by What's the Download. "I'm sure people are illegally downloading my music.... I would tell them that I don't mind. It's okay. I just want them to hear it and like it!"
On the other hand, hip-hop group Black Eyed Peas lays down specifics for when illegal downloading or file sharing is good, and when it's not.
"For up-and-coming groups that don't have deals and that are trying to get exposure and publicity, it's a forum that is good for them," the group said. "People that do have deals, however, and have records coming out, a lot of times don't get the record sales that they want."
Singer Anita Baker said education is the key to ending illegal downloading, so that fans know the importance of an artist's product and so musicians can make a living from their work.
"I don't think that a lot of young people understand why it's against the law, therefore I think that communicating that to them is paramount," Baker said. "Once people understand that downloading my music or anyone else's music, not only deflates an entire industry that brings music to fans all around the world, but it also depletes revenue for artists who make a living making this music, I think people will realize that we can all find some common ground."
Roecker said a balance must be met in the music downloading industry between what music fans want, something to listen to, and what the music makers want, motivation to make music.