After four months of using Napster, 18.5% of Napster users visited CDNow.com but only 5.5% of users bought from the site. This is down from 25.6% and 8.4% respectively for the first month using Napster.

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Home web surfers who download music with Napster software initially purchase music online at the same rate as non-Napster consumers. However, after they become adept at downloading music, they purchase much less music through online vendors than non-Napster users, according to the PC Data Online buying meter, which tracks the purchasing behavior of 120,000 US home Internet users.

New Napster users are just as likely to purchase music at cdnow.com after initially downloading Napster software. However, 90 days after downloading Napster software, consumers' online music purchases plummet, although they visit online music retailers much more frequently.

"Apparently Napster users visit online retailers to get information about music, and then use Napster to download the music free of charge," said Ann Stephens, CEO of PC Data. "Portable MP3 players and recordable CD-ROMs are simply too easy and too cost efficient not to use."

The growing size of the Napster population is likely to exacerbate the problem. The number of Napster users has more than doubled over the past six months to 18.7 million, or nearly one fifth of the total online population. Penetration among the primary consuming group, 12-24 year-olds, is more than 40 percent.

The transaction data is obtained from PC Data's metered panel of 120,000 home Internet users, and focuses on the purchasing behavior of Napster users. This data is part of an ongoing study to track the online transactions of Napster users. Future studies will seek to quantify the dollar impact of Napster-like file sharing services.

 

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