While the balance of power in the legal online music world remains virtually unchanged, the number of consumers legally downloading music files has been on the decline, according to the latest sector

While the balance of power in the legal online music world remains virtually unchanged, the number of consumers legally downloading music files has been on the decline, according to the latest sector study released yesterday (Oct. 13).

Apple Computer's iTunes service continues to dominate the online music download market, with nearly 70% of music files downloaded legally between December and July coming from iTunes, research firm the NPD Group said.

Napster's share for the same time period was 11%, while MusicMatch, RealNetworks and Wal-Mart each reached about 6%, according to the group.

However, the number of consumers paying for music downloads has fallen to about 1 million since hitting a peak of 1.3 million in April, the firm's latest report finds. The downturn coincides with the end of promotional pricing periods offered by several music download services, in which consumers were offered trial price incentives, NPD said.

"Our research suggests that at this stage of the business it's not so much about building share as it is about creating demand for paid downloads universally," NPD VP Russ Crupnick says. "The overriding challenge for paid music download services is to first make the concept enticing to a wider audience and then to build loyalties to a specific service."

Building continued demand for paid music via the Internet requires "even greater investment in consumer promotion as well as broadening partnerships with traditional music retailers and consumer goods companies," Crupnick says.

Over the past years, the number of households with a member using a peer-to-peer site to download music for free has ranged from 4.7 million to 6.4 million per month, with generally higher levels seen since March, according to NPD.

NPD collects its online music data from PCs of 40,000 NPD online panelists, balanced to represent the online population. It also conducts bimonthly surveys among a group of about 5,000 respondents.