Music streaming almost as popular as downloading in US

Streaming music is now almost as popular among US internet users as downloading digital tracks, according to new figures from NPD Group published by Evolver.fm. In August, 30% of Americans downloaded music to their PCs, up from 29% in March, while 29% streamed music in August, up from 25% in March. The figures indicate that streaming is increasing at a faster rate than downloading among Americans. If these growth rates continue streaming could overtake downloads and become the dominant way of listening to music via PCs in the US within months.

This follows a trend in parts of Europe where streaming is already estimated to be more popular than downloading. Just last week a French study found that for the first time ever more internet users are streaming music via their PCs than downloading it, with 10m listeners, or 27% of the online population, streaming music last month. This makes listening to streamed music the fourth-most popular internet activity in France behind just chatting, email and blogs.

Competition in the space continues to hot up. Apple is believed to be developing a streaming service to enable users to store music from their iTunes library in the cloud. Google is also planning to launch a music service linked to its Android platform and there are rumours of a standalone music service linked to Google's search engine. There are also a number of startups entering the space, including Spotify, Last.fm, Rhapsody and MOG.

Streaming is increasingly appealing to many internet users because it provides them with instant access to content across a number of devices including PCs, smartphones, tablets and TVs. Many analysts also believe streaming services could drive music revenues in the future, particularly as music sales continue to decrease. Already the latest figures from Nielsen suggest that the US digital music market may be reaching saturation, with sales of digital singles flat year on year in the first half of 2010, while CD sales continue to plummet.

Streaming services could also help labels by cutting down on the use of illegal filesharing networks. Spotify has previously claimed that its free streaming feature attracts illegal P2P downloaders who pay once they get hooked and require access via multiple platforms. Speaking at a conference in the US recently Napster co-founder Sean Parker, who has invested in Spotify, says labels should embrace such services because they convert users who are passionate about music into paid subscribers. "The war on piracy is a failure," he says. "Labels must offer services that consumers are willing to pay for, focusing on convenience and accessibility."