• by Ross Fadner , January 7, 2004

Peer-to-peer music downloads may be declining as a result of the record industry's efforts to prosecute copyright violators, but the actions also appear to have contributed to an increase in traffic to paid online music sites such as Roxio's Napster and Apple's iTunes.

On Tuesday, MediaDailyNews reported on significant declines in music downloading and file-sharing since the Recording Industry Association of America started charging unsuspecting college students and others who are guilty of 1,000 or more copyright violations. New data compiled by Internet traffic monitor Hitwise for the MediaDailyNews shows that traffic has increased substantially to paid online music sites since early October - right around the time the RIAA filed their first lawsuit.

According to the Hitwise data, which monitors the traffic of thousands of commercial web sites in various categories, from October 4 to January 3, Apple's iTunes had a massive 380 percent increase in U.S. traffic. This huge increase is probably due to the fact that in early October Apple made iTunes available to PC users.

Napster, which didn't relaunch until October 29, had a 60.5 percent increase in traffic during the same period. BuyMusic, which looks to be an increasingly marginal player in the paid music arena and is thus the oldest paid music service, had a 35.3 percent decline.

Hitwise reports that traffic to illegal downloading sites KaZaa, WinMX, and BearShare did not decline from Oct. 4 to Jan. 3. It went up, but surprisingly, file-exchange BearShare received the greatest increase in traffic at 61.5 percent, followed by WinMX at a 40.6 percent increase. Top file-exchange program KaZaa only received a 13.3 percent increase, indicating that users fled to other sites after the RIAA started the high-profile prosecutions of KaZaa users.

Other Hitwise data shows that from Oct. 25 to Jan. 3, Napster had the greatest market share of total U.S. traffic to Shopping-Music sites, at 1.89 percent. iTunes was second in the Shopping-Music category at 1.47 percent, followed by BuyMusic at .35 percent. As a percentage of all U.S. traffic, Napster's share is .006 percent for the same period, followed by iTunes at .004 percent and BuyMusic at .001 percent.

iTunes, however, still holds a 70 percent market share for all legal songs downloaded, according to Nielsen SoundScan.