Music Ally

New research from NPD Group estimates that in 2009 there were 24 million less US music buyers than in 2007. That’s a 21% drop in numbers, although with the average amount spent by each buyer rising 2%, it implies a 19% drop in total music spending.

However, more worryingly for the industry, NPD’s numbers claim that the number of US people buying music downloads dropped from 35.2 million in 2008 to 34.6 million in 2009 – despite the fact that the number of files shared on P2P networks dropped sharply in the same time period.

Another stat which may partially explain this: NPD claims that free online radio leads to a 41% increase in paid downloads, but free on-demand music leads to a 13% decrease in paid downloads. A stat that may be seized upon by label bosses who are increasingly disillusioned with free on-demand models.

However, it’s worth noting that for some of the companies offering free on-demand music – notably Spotify – it’s as much about stimulating paid subscriptions as individual downloads – an upsell not covered by NPD’s figures, which were announced at the Digital Music East conference.

Research from NPD Group claims that active Twitter users buy 77% more digital music downloads on average than non-users. 34% of all Twitter users have bought digital music in the last three months, compared to 16% of non-Twitter users, according to the survey. Oh, and they’re twice as likely to visit MySpace Music and Pandora as average web users.

“Based on their music-purchasing history, active Twitter users are simply worth more to record labels and music retailers than those who are not using Twitter,” says analyst Russ Crupnick. In truth, the results aren”t startling – Twitter users are by definition fairly tech-savvy.

However, it does provide more evidence for Twitter’s potential for artists and labels. “But it has to be done right,” says Crupnick. “There must be a careful balance struck between entertainment and direct conversation on one hand, and marketing on the other.”