Port Washington, N.Y. – More than a quarter of Apple (NASD:  AAPL) iTunes,
iPod and iPhone users in the U.S. surveyed recently expressed "strong
interest" in a free, cloud-based music streaming service, while
"between seven and eight million" people reported strong interest in
a paid subscription version of such a service. Market research firm NPD Group asked iTunes users —
estimated to total 50 million in the U.S. — about free and unlimited streaming
of their iTunes libraries over the Internet, as well as subscription options.

model that offered free streaming would attract 13 million to 15 million subscribers,
according to the survey, while between 7-8 million U.S. iTunes users indicated
a willingness to pay a minimum monthly fee of $10 for such a service.

the service’s launch, user numbers could conceivably rise substantially, as
they upgrade to newer connected devices and actually experience the benefits of
cloud-based music," said NPD Group analyst Russ Crupnick.

"If the
consumers who indicated strong interest in a paid subscription actually adopted
one of those services at $10 per month, the market opportunity is close to $1
billion in the first year, which is roughly two-thirds the revenue garnered by
the current pay-per-download model.

"We don’t yet know what, if any,
effect these services might have on the traditional pay-per-download music
model, or whether consumers will ultimately spend more on digital music
overall, if or when any of these options eventually rolls out," Crupnick


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