The good news: Research company Ipsos Insight reported that over half of US digital music downloaders have paid for the music. About 25 million downloaders have paid, 11 million in the past month.

The bad news: Despite this penetration, authorized services represent a tiny fraction of total downloading. The major labels and online retailers have a long way to go to sell the public on the value of paid offerings and to keep them as loyal customers.

"Over the past year, the digital music market has continued to evolve into a formidable music distribution channel marked by steady growth and increasingly dynamic usage levels. Americans are indeed curious about and willing to experiment with current fee-based acquisition options," said Matt Kleinschmit, a Vice President with Ipsos Insight and author of the TEMPO research. "But for digital music service providers to continue to boost overall purchase patterns, they will have to work to continually refine and optimize their offer in an effort to encourage more repetitive consumer buying behavior."