ITunes holds sway as the dominant fee-based digital music destination

Apple`s iTunes online music download service continues to dominate as the leading fee-based digital music destination, according to the 3rd Annual TEMPO Digital Music Brandscape Study from Ipsos.

The study gauged American music downloaders’ awareness of online music services. For survey respondents age 12 and older, iTunes gained significantly in both unaided and aided awareness over 2005, moving from 57% to 66% for total awareness. Napster experienced a decline, dropping from 79% to 68% total awareness and Yahoo Music awareness increased to 53% from 49% in 2005.

Downloaders appear to draw the line between “name” and “reputation” when it comes to online music. For example, Napster continues to hold the No. 1 position in overall consumer awareness, but respondents were more likely to rate iTunes as the “best” fee-based digital music service, followed by Napster, at 41% vs. 11%, respectively.

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The change in ‘best’ identification was significant for both brands, with iTunes’ increasing from 33% and Napster dropping from 22%.

Social networking service MySpace made the biggest strides in gaining downloaders’ attention, jumping from 16% to 54% in just one year.

While MySpace has effectively carved out a unique area of the market centered on social networking and direct-to-consumer recommendations, it remains to be seen if this model can yield revenue and scale while maintaining the copyright protections that content holders require, says Matt Kleinschmit, vice president of Ipsos Insight, the consulting arm of Ipsos, and author of the TEMPO study. “Despite this, the growth of MySpace is a strong example that there remain areas of opportunity in the evolving digital music market,” he says.

The TEMPO Digital Music Brandscape study is an examination of fee-based online music brands, and is part of TEMPO, an Ipsos quarterly study of digital music behaviors. Survey data was collected between August 21 and 30, 2006, via a web-based representative sample of 1,501 U.S. music downloaders age 12 and older. Ipsos is an international market research company.

David Moriarty, Apple’s director of data mining, will speak at the Internet Retailer Conference & Exhibition, June 4-7 in San Jose, in a session titled Web Security: Identifying and Avoiding the Scam Artists .