P2P STILL RULES, BUT PAID DOWNLOADS ARE UP

Legitimate downloads are starting to make inroads.

No, this is no April Fool’s joke. In terms of percentages, paid downloads are outpacing gains in P2P use.

In 2006, the number of households with PCs that downloaded at least one song using free peer-to-peer software, like Limewire or BitTorrent, grew a modest 7.2%, reaching 14.9 million, according to figures released by the NPD Group, a market-research firm.

The number of computer households that used royalty-paying services like iTunes shot up 65.8% to 12.6 million.

The real difference is in the total number of downloads the average P2P household grabs. In all, P2P networks yielded five billion downloads in 2006, whereas 509 million songs were downloaded from iTunes and other legit services.

Free downloaders tend to gorge mainly because they’re not paying for each track. NPD analyst Russ Crupnick also points to price and increasing size of external hard drives as reasons for the explosion.

NPD gathered its data from tracking software on 12,000 home PCs, then adjusted to reflect the roughly 70 million Internet-using households in the U.S.