BROADBAND ISPS WILL BE AT THE CENTER OF THE DEVELOPMENT OF EUROPE'S LEGITIMATE ONLINE MUSIC MARKET, ACCORDING TO LATEST FINDINGS FROM JUPITER RESEARCH(London, U.K. - July 11, 2003) - The latest findings from Jupiter Research, a division of Jupitermedia Corporation (Nasdaq: JUPM), forecast a further difficult period for the online music industry with over 18% of Internet users still using illegal file sharing. According to Jupiter Research, until genuine cooperation is reached between Broadband Service Providers ("BSPs") and the music industry, consumers will remain unconvinced of the need to pay for online music.
According to a recent Jupiter Research survey, the European online music market has made little progress, with 43% of consumers surveyed still not convinced of the need to pay for a digital music service. Whilst 29% of BSPs remain confident that digital music will ultimately generate revenues, major barriers to uptake remain, with too little major label content available online, overly restrictive digital rights and low broadband penetration. Access to online music remains a driver for consumer broadband uptake, but consumers still primarily see this as a route to gaining improved access to illegal file sharing sites, indicating that file sharing will become an increasing problem for BSPs, placing greater strain on their networks.
2002 was a year of missed opportunity as the music industry failed to grant the types of licenses to legitimate online music services that would have empowered them to compete with illegal file sharing. However, to date, 2003 has been a year of progress and Jupiter Research expects this to continue through the remainder of the year, with labels making more of their catalogue available for digital distribution and over half of BSPs interviewed by Jupiter Research stating that they intend to launch a music service later in the year. By the end of 2003, Europe's online music market will have finally started to gain momentum, with BSPs at the center of this development, using music services to drive usage of their broadband products.
Mark Mulligan, senior analyst at Jupiter Research said, "Despite the optimism of BSPs, our research demonstrates that consumer revenues from the online music industry are likely to remain small in the near term. The real value of music services for BSPs though, lies in reducing churn and improving consumer satisfaction as part of a wider content strategy. However, until real cooperation exists between BSPs and the music industry consumers, illegal file sharing will continue to hinder uptake of legitimate music services."
Mark Mulligan will be presenting these research findings and others at the upcoming Jupiter Plug.IN Conference & Expo being held at the Crowne Plaza Hotel Times Square in New York City on July 28-29. For more details visit the event Web site at www.jupiterevents.com/plugin/summer03/index.html.
The complete findings of this report are immediately available to Jupiter Research clients online. For more information, please contact Mark Mulligan at +44 207 665 9573 or e-mail [email protected].
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