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Up in the Clouds with iTunes

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According to a recent survey of Apple iTunes, iPod, iPhone and iPod Touch users, conducted by The NPD Group, more than a quarter of consumers participating had a strong interest in a free cloud-based music option. Many were willing to pay a subscription fee to access their own music libraries from multiple devices and platforms, when asked about their reactions to various music subscription-model concepts.

iTunes.jpg The "iTunes Usage Report" asked consumers to evaluate a music service offering free and unlimited streaming of content from the consumer's own iTunes library, as well as several paid options for music subscriptions that included a combination of music streaming, downloads and Web access to the consumer's own iTunes library.

The report found that between 7 and 8 million iTunes users in the U.S. have a strong interest in one of the paid subscription options, and would pay a minimum monthly fee of $10 for streaming music or to access their personal music libraries on multiple devices. Of the 50 million estimated iTunes users in the U.S., NPD states model that offers users free access to their own music libraries would attract between 13 and 15 million subscribers.

According to Russ Crupnick, vice president and senior entertainment analyst for NPD, these numbers could rise after such a service was launched as users upgrade to newer connected devices and experience the "benefits of cloud-based music." Crupnick believes the market opportunity is close to $1 billion in the first year. This is approximately two-thirds of the revenue currently generated by existing pay-per-download users. However, Crupnick acknowledges that the effect of these services on the traditional pay-per download, should these options become available, or whether consumers will end up spending more on digital music altogether are not known.

The results from The NPD Group's "iTunes Usage Report," made available today, is based on an online survey 3,862 completed surveys from qualified respondents age 13 and older. Each respondent used iTunes at least once in the past three months. For additional information, see also, " Apple developing cloud music community? "

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