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The NPD Group: Despite the App Invasion, Music Still Sets the Beat with iTunes Shoppers

Port Washington, New York (Vocus) August 31, 2010

The NPD Group , a leading market research company, recently surveyed Apple iTunes, iPod, iPhone, and iPod Touch users to determine how they use iTunes to acquire music, video, games and other entertainment content. According to NPD’s “iTunes User Report,” apps are garnering a lot of attention among iTunes users, but music is still central to the iTunes experience.

According to NPD’s entertainment industry research , virtually all iPhone or iPod Touch users have downloaded an app for free, but 82 percent report actually purchasing music. More than half (56 percent) of iTunes buyers purchase music exclusively, and a majority of iTunes user search time tends to be focused on looking for music, as well.

“Sales growth in digital music has been slowing, and some of that decline might be related to the distraction from apps; however, iTunes shoppers are still completely engaged with music, whether it’s about listening, discovering or buying,” said Russ Crupnick, vice president and senior entertainment analyst for The NPD Group. “Apps and video certainly do compete for consumer dollars, but they can also be used to promote music and re-energize digital music and video download sales.”

The “iTunes User Report” also provided insight into the question of whether apps are valuable to users or mostly frivolous. Two out of three iPhone and iPod Touch owners who have downloaded apps report using them regularly, rather than just using them briefly. In addition, nine out of 10 have downloaded a free app, which Crupnick says, “points to a major up-selling opportunity to paid versions of the same app.” Plus 69 percent of iPhone and iPod Touch owners who have not yet paid for an app told NPD they are interested in possibly doing so in the future.

Data note: The information in this press release is based on The NPD Group’s “iTunes Usage Report,” which is based on an online survey fielded to members of NPD’s online panel in May 2010. The report is based on 3,862 completed surveys from qualified respondents (age 13 and older). Each respondent reported using iTunes at least once in the past three months. Statistical significance testing has been employed at the 95 percent confidence level, unless otherwise noted. The “iTunes User Report” was independent research conducted by NPD to assess the potential for music subscription services and to profile iTunes usage habits. The concepts tested were also developed independently by NPD.

About The NPD Group, Inc.

The NPD Group is the leading provider of reliable and comprehensive consumer and retail information for a wide range of industries. Today, more than 1,800 manufacturers, retailers, and service companies rely on NPD to help them drive critical business decisions at the global, national, and local market levels. NPD helps our clients to identify new business opportunities and guide product development, marketing, sales, merchandising, and other functions. Information is available for the following industry sectors: automotive, beauty, commercial technology, consumer technology , entertainment, fashion, food and beverage, foodservice, home, office supplies, software, sports, toys, and wireless. For more information, contact us or visit http://www.npd.com/ and http://www.npdgroupblog.com . Follow us on Twitter: @npdtech and @npdgroup.

Press Contact:

Lee Graham

212-333-4983

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