NPD Group conducted a survey of around 50 million American iTunes users, and discovered that over a quarter of those would be interested in a free, over-the-air, internet based music streaming service.
The other option given to customers was a $10 per month subscription package. Around 7-8 million people showed an interest in that setup. For that ten bucks, the user would hope to receive access to streaming music, or access to their own personal playlists from different devices.
The vice president of NPD Group said: “After the service’s launch, user numbers could conceivably rise substantially, as they upgrade to newer connected devices and actually experience the benefits of cloud-based music.
If the consumers who indicated strong interest in a paid subscription actually adopted one of those services at $10 per month, the market opportunity is close to $1 billion in the first year, which is roughly two-thirds the revenue garnered by the current pay-per download model.”
It’s undeniable in this day and age, that the music industry has been rocked by P2P file sharing, torrent sites etc. How do you compete with free music? iTunes has done fantastically well, but with more and more people opting for the file sharing option, Apple has to do something to try and shake up the market. It has to be said though, if anyone can shake up any market and turn it on its head, it’s Cupertino.