Illegal Downloaders Spend More on Music: Study

Want to prosecute people who are downloading files illegally? Well, if you fine them, you might be taking money out of the hands of your best customers, a new survey shows.

It's not the first such survey to come to this conclusion. However, it is the latest.

The study, published on Sunday by U.K. think tank Demos, surveyed 1,008 people aged between 18 and 50 last month. It found that those who admit to illegally downloading music spent an average of £77 a year on music, which is £33 more than those who claim that they never do so.

The British Phonographic Industry estimates that seven million U.K. users download files illegally annually, which will cost the industry £200 million this year. Assuming, however, that the survey held true, the extra £33 spent annually by each of those seven million would add up to £231 million. Hey, that's a profit of £31 million!

Seriously, the study also noted that lowering the price for legally downloaded music could result in a significant decrease in illegal downloads. The sweet spot would seem to be 45p per track. Currently, tracks on iTunes run between 59p and 99p; the survey indicated that sales could double at that price.

Naturally, the music industry wasn't too impressed with the survey. Recent proposals, include a "three strikes, you're out" policy which would terminate broadband service if consumers fail to respond to warning letters; the industry believes this will deter illegal downloaders.

Meanwhile, some, including Forrester Research, have a different view. Mark Mulligan of Forrester Research said, "The people who file-share are the ones who are interested in music. They use file-sharing as a discovery mechanism. We have a generation of young people who don't have any concept of music as a paid-for commodity. You need to have it at a price point you won't notice."

This same argument has been made for downloaders of other material, such as PC games; many say they download as a sort of "try and buy" method. In terms of this survey, 83% said they buy more music as a result, and 42% said they did so to "try before you buy."

Of course, this doesn't change the fact that illegal downloading is still stealing. It is evident, however, that many younger people just don't see it that way.