Some interesting new research from Jupiter:

Jupiter thinks the European music industry is facing “a demographic time bomb”. In its report “European Music Consumer Survey, 2005” it says that European consumers who download music from illegal file sharing networks currently outnumber those downloading from legal services such as Apple’s iTunes Music Store by a factor of three to one.

Some 15% file share while just 5% pay to download. Uh oh.

Jauntily upbeat however, Jupiter says “there is solid demand for paid downloads”, with 10% of European consumers willing to pay, rising as high as 31% in Sweden.

But file sharing penetration in Europe is highest among younger consumers (34% of 15-24 year olds) and is impacting the way they value music with many having little concept of music as a paid commodity. Among the 46% of European online 15-24 year olds who use the Internet to consume music, the CD is becoming increasingly irrelevant: 40% do not consider the CD to be a good value for money and 43% prefer to copy rather than buy CDs. Unless these consumers are encouraged to develop music purchasing behavior soon they may never develop meaningful music buying habits.

In a release Mark Mulligan, Analyst at JupiterResearch said: “Illegal activity is a key threat. The Digital Youth of today are being brought up on a near limitless diet of free and disposable music from file sharing networks. When these consumers age and increase spending power they should become key music buying consumers. But unless the music industry can transition these consumers whilst they are young away from free consumption to paid music formats, be they digital or CDs, they may never develop music purchasing behavior and the recording industry could suffer long-term harm.”