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Napster and Music Buying

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- 2000.11.01 - Tip Jar

Statistics are beautiful things - you can make them say almost anything.

For instance, according to New study links Napster, decreased music purchase (Peter Cohen, MacCentral, 10/31/00), there's a strong correlation between extended Napster use and decreased music purchases.

  • Before using Napster, 10.4% of Web users visited CDNow and 8.3% bought something.
  • The first month of Napster use increased visits to CDNow to 25.6% and bumped the purchase level to 8.4%.
  • The second month saw a slight decrease in visits to CDNow (24.8%) but an increase in purchases to 8.9%.
  • In the third month, only 20% of Napster users visited CDNow, and just 5.7% them spent money.
  • In the fourth month, the visit rate dropped to 18.5%, while purchases dropped to 5.5%

Isn't this clear evidence that Napster use leads to decreased music purchases? Or at least to decreased online music purchases?

No, it isn't.

What It Shows

Before using Napster, people went to CDNow to buy CDs, not to browse their selection. The PC Data numbers show there was an 80% chance pre-Napster Web users visiting CDNow would make a purchase. That's a very impressive statistic!

What the numbers don't show is how many pre-Napster users visited other online music sources, how long these users had been on the Web, and if they were even aware of sources other than CDNow.

The data shows that Napster users are much more likely to visit CDNow than non-Napster users. It also says after several months of Napster use, these users are less likely to purchase from CDNow - but it doesn't tell us why. We don't know if this is because they've already purchased a lot of new music in the past few months and want to hold the line, have pirated to their heart's content, or have found better online sources for their music.

The statement that Napster use leads to decreased music purchases is no more than an inference from the data. Further study would have to be done to see if Napster users buy more music per visit than non-Napster users or if they are more price conscious and shop several online sites before making a purchase decision.

In other words, more seasoned Web users are price shopping and only about 30% likely to buy music from CDNow instead of another online source.

The only things we can know from the data are that Napster users are more likely to visit online music sites than non-Napster users and that they are less likely to purchase from CDNow after a few months on the Web.

UPDATE: I got home Tuesday night to find the latest issue of PC Magazine, the one where readers rate Web sites. Guess what? CDNow rates a C among users (p. 161), while Amazon.com receives an A and buy.com gets a B. This adds credence to the idea that people who once bought from CDNow are now shopping elsewhere. So does the statistic that 40% of surveyed readers have purchased CDs or videos through Amazon.com, but only 20% have used CDNow.

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Dan Knight has been using Macs since 1986, sold Macs for several years, supported them for many more years, and has been publishing Low End Mac since April 1997. If you find Dan's articles helpful, please consider making a donation to his tip jar.

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