Post LimeWire, P2P Usage Plummets 50%!

NPD Group claims the percentage of the US online population using P2P services to download music illegally has declined from a high of 16% in late 2007 to just 9% after LimeWire was shut down by court order.

According to The NPD Group, the North American market research company, the number of US file-sharers has dropped by nearly half since the closure of LimeWire last Fall.

The percentage of the US online population using P2P to download music illegally declined from a high of 16% (28 mln) in late 2007 to just 9% (16 mln) after the once dominate P2P service was ordered to disable the “the searching, downloading, uploading, file trading and/or file distribution functionality, and/or all functionality” of the famed file-sharing program.

“Limewire was so popular for music file trading, and for so long, that its closure has had a powerful and immediate effect on the number of people downloading music files from peer-to-peer services and curtailed the amount being swapped,” said Russ Crupnick, entertainment industry analyst for NPD.

The NPD group also says that the average number of tracks downloaded dropped by nearly half in the same time frame from 35 to just 18.

NPD’s “Music Acquisition Monitor” claims that Limewire accounted for 56% of P2P usage for downloading music before its closure, but that since then alternatives like Frostwire and BitTorrent have seen increased usage.

“In the past, we’ve noted that hard-core peer-to-peer users would quickly move to other Web sites that offered illegal music file sharing,” added Crupnick. “It will be interesting to see if services like Frostwire and BitTorrent take up the slack left by LimeWire, or if peer-to-peer music downloaders instead move on to other modes of acquiring or listening to music.”

According to its data, Frostwire usage increased from just 10% before LimeWire was shuttered to nearly 21% afterwards. Usage of the BitTorrent client u-Torrent increased from 8% to 12% during the same period.

Not mentioned are all of the other P2P alternatives that exist, particularly the LimeWire Pirate Edition in which all of the “dependencies on LimeWire LLC’s servers have been removed” and “all remote settings have been disabled.”

Now The NPD Group doesn’t mention other possible reasons for the decline in P2P usage. It’s highly unlikely that former LimeWire users simply quit file-sharing altogether once the service was shut down.

If US file-sharers anything like their UK contemporaries then the decline is probably largely attributable to free streaming services which negate the need for having to acquire music at all. For in July of 2009 The NPD Group published a UK survey that reported a dramatic shift in how teens listen to music.

”While we expected to see the continued decline in CD purchasing among teens in NPD’s music tracking surveys, it was surprising to see that fewer teens downloaded music from P2P sites or borrowed them from friends,” said Russ Crupnick, the same analyst behind the current P2P study. “These declines could be happening due to a lack of excitement among teens about the music available, but it could also reflect a larger shift in the ways teens interact with music, given that so much music is now available whenever and wherever they want it.”

Curiously, however despite The NPD Group’s claim that P2P usage has dropped by nearly half since 2007, I’m sure the music industry will claim the contrary. Declining P2P usage won’t help its push for legislation like the controversial “Combating Online Infringement and Counterfeits Act” or aid in its support for domain seizures by the U.S. Immigration and Customs Enforcement (ICE) agency.

Stay tuned.

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