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Digitally downloaded software popular online, automatic renewals not so much

June 1, 2010 |  4:36 pm

Digital delivery is the preferred method of getting software, with consumers reporting they got nearly two-thirds of their programs last year through online downloads, according to an NPD Group report released  Tuesday.

But updating that software automatically is not in favor — only 5% of those covered in the survey trusted retailers to do that, according to the report titled "A Landscape View of Online Software Purchasing 2010."

"People like being asked before giving away their money again," said Stephen Baker, an NPD analyst who worked on the study. "While there are a lot of good reasons why something like security software should be on an automatic-renewal program, the fact is most consumers don’t feel comfortable having something automatically charged to their credit cards every year or two, or however long."

More than half of consumers said they would rather update their software annually via digital download, he said.

The study, which surveyed about 4,000 consumers, found that 65% of people buying their software online preferred digital distribution over a physical format, Baker said. In the 2009 study, which was the first year it was conducted, 63% of those surveyed preferred downloads to discs, he said.

Trial-to-paid software conversions were 8% of sales, up from 6% from a year earlier, Baker said. Digital downloads of new products accounted for 23% of online purchases, up slightly from 22% a year earlier, he said.

Online subscription renewals were down 1% from 2009, accounting for 34% of online software sales this year, he said.

Baker said he expects to see an even larger increase in those choosing digital downloads over mail-delivered software next year, especially if the economy improves.

"People’s comfort with downloading software online has grown and will continue to grow," he said. "It's kind of a halo effect from things like Netflix and iTunes, things that got people to trust the idea of buying things online. More and more people are leaving the product boxes behind."

-- Nathan Olivarez-Giles