Consumers Not Receptive to Music Subscriptions

For Immediate Release
Contact: Jenny Barrett
Parks Associates
972-490-1113
Email: sales@parksassociates.com

Consumers Not Receptive to Music Subscriptions
Only 8% of MP3 Owners are interested in a Portable Music Service

Dallas, Texas February 10, 2005 — Portable music services will not have a big impact this year, according to Parks Associates’ new report Digital Music: Analysis and Forecasts. Respondents in the recent Parks Associates survey Global Digital Living strongly favored the single-track purchase model over a subscription when presented with both options. Roughly 40% said they were likely to buy songs one at a time, but only 8% were likely to use a subscription service.
“The market has a long way to go in promoting subscription models,” said John Barrett, director of research at Parks Associates. “There is hope Microsoft’s Janus technology will boost the digital music market by enabling portability and greater integration of hardware and content. However, our data show the industry needs to translate these solutions into something more tangible and desirable to consumers. At present, consumers either do not fully grasp the value of a subscription ‘all-you-can-eat’ service, or they simply don’t want it.”

According to Digital Music: Analysis and Forecasts, the industry is beginning to promote “buffet” music plans, which allow users unlimited downloads for a flat monthly fee, to compete with a la carte models such as iTunes. Technologies such as Microsoft’s Janus promote this paradigm of use, although few MP3 players save for some very expensive models currently support these solutions. The report, citing both limited availability and limited enthusiasm from consumers, predicts sluggish growth for these solutions this year, but it is more bullish on the long-term prospects because hardware could be subsidized under a subscription model.

Digital Music: Analysis and Forecasts provides an in-depth look at the significant issues, technologies, and players in the digital music industry. It examines the consumers using digital music and portable MP3 players, how these files and devices are being used, and who is likely to buy over the next year. Moreover, the report profiles households with PC-to-stereo connections and online music providers. The report also features data from Global Digital Living, a multinational research program that surveys customers in thirteen countries spanning four continents.
For additional information on Digital Music: Analysis and Forecasts or Global Digital Living, visit http://www.parksassociates.com or contact 972-490-1113 or sales@parksassociates.com.

About Parks Associates: Parks Associates is a market research and consulting firm focused on all product and service segments that are “digital” or provide connectivity within the home. The company’s expertise includes home networks, digital entertainment, consumer electronics, broadband and Internet services, and home systems.

Founded in 1986, Parks Associates creates research capital for companies ranging from Fortune 500 to small start-ups through market reports, multiclient studies, consumer research, workshops, and custom-tailored client solutions. Parks Associates also hosts Fall Focus and co-hosts CONNECTIONS (in partnership with the Consumer Electronics Association) each year. http://www.parksassociates.com.