For Immediate Release:

Monday, November 15, 2004

UK Gives the Customer What They Want

The first vending machines to sell music downloads are to be introduced in London in December as Britons continue to turn their backs on traditional methods of buying singles.

Customers will be able to download a single for about one pound onto a mobile phone or personal music player and the company launching the project said on Monday they hoped to initially offer two million songs.

The move follows continuing poor sales for traditional, over-the-counter singles.

In October the chart compilers said they recorded the worst ever sales for a song reaching number one -- just over 23,000 -- compared to sales of hundreds of thousands in the 1980s and 90s.

Inspired Broadcast Networks will open two music kiosks in Waterloo and King's Cross stations next month and plan to have up to 20,000 others in high-street shops, service stations and pubs by the end of 2005.

Between 200-250,000 singles are bought via music download services every week, rapidly approaching physical sales that regularly drop below 400,000, the Official UK Charts Company said.

In response, the Charts Company started to produce its own download chart to reflect the growth in the market and is now planning to merge the two.

The piracy-hit music industry is also desperate to promote legal digital music services to convert file-sharers into customers.

In the states, music retailers Virgin Records, Best Buy and Walmart have expressed interest in this technology and are reportedly interested in installing download kiosks in their stores by mid-2005. Select Virgin Record stores have been testing their own version of this concept for about a year.

In our current two-year radio attrition study, Bridge Ratings has been trending audience erosion to digital forms of audio entertainment (See "Where Did My Listeners Go, Part 2"). During our interviews of the 1200 participants, questions were asked related to mobil digital downloading. Primarily, the 12-24 year old age group shows significant interest in this technology with over 68% users of digital music players telling us that if they were able to download music while visiting their favorite music or retail store, they would likely pay for this service.