• by Masha Geller , September 12, 2003

As much talk as there has been in the online arena about digital music and file sharing, it really boils down to a small number of people who've amassed huge music libraries on their hard drives.

According to the most recent data from The NPD Group, 64% of households with Web access have at least one digital music file on their computers. Of the total population saving digital files on their hard drives, 56% have more than 50 files while a comparatively small number of Web users (8%) possess more than 1,000 digital files.

Russ Crupnick, VP of The NPD Group, says that a majority of people have a very basic experience with digital music, but there clearly are a small percentage of users who have taken full advantage of file sharing services. "The RIAA's focus on those sharing the most files makes sense, because this group provides the most egregious example of one of the music industry's most pressing business issues - copyright infringement."

Preliminary data findings from MusicWatch Digital from The NPD Group also show that two-thirds of all digital music file acquisition can be attributed to file sharing. The remainder is mainly attributed to ripping tracks directly from CDs. Among the most popular P2P services, according to NPD, was Kazaa (21% usage) and WinMX (5% usage).

In addition, high-speed broadband Internet access appears to be a key facilitator to digital file acquisition. A little over half of all music files in inventory are held by households with high-speed broadband Internet connections.

According to Crupnick, "There's a silver lining in the file-sharing cloud. There are now tens of millions of consumers who are primed for digital music; the challenge is finding the right combination of features and pricing to effectively monetize this behavior. Half the file sharers are college aged or younger, which represents an opportunity for the recording industry to keep pace with younger consumers."