Today has been full of good news for the music industry — we just heard that revenues grew for the first time since 1999, and now an NPD study claims that free streaming services are helping to reduce peer-to-peer music sharing. According to NPD's survey, the number of consumer using P2P services to download music dropped 17 percent in 2012 compared to the year prior. As of last year, NPD's data showed that 11 percent of internet users aged 13 or above used P2P services to download music, down significantly from the 2005 high of 20 percent.The driving force behind that decline is consumer shifting over to using streaming services that offer free options like Spotify, Rdio, or Pandora. NPD claims that nearly half of those who said they stopped or cut back on using P2P options to download music did so because of the easy availability of free music through streaming services.
While the trend is certainly another one that the music industry will be happy to see, NPD's data should be taken with a grain of salt — it didn't say how many consumers it surveyed, and it also isn't clear exactly what activities were defined as P2P sharing. For example, we're not sure if Bit Torrent downloads were included in the study. That said, NPD's data does match up well with the slight rebound the music industry saw last year — more consumers shifting over to streaming services could both lead to a reduction in piracy as well as an increase in revenue for the record labels. We've reached out to NPD for more details behind its study and will update with anything else we learn.
Update: NPD let us know that it does including pirating music via Bit Torrent in its methodology, and that it had a total of 5,400 respondents in its survey.