From the time the first MP3 players such as the Diamond Multimedia Rio 500 hit the market, the music industry went strongly against these players claiming that their only use would be for listening to illegally downloaded music.  The RIAA even tried suing Diamond Multimedia back in 1999, but eventually came to a settlement.  Even Microsoft's CEO Steve Ballmer claimed that consumers carry more illegally obtained music on their iPods than what legal music they may carry. 

In a survey involving over 1,100 American people aged at least 12, the marketing research company Ipsos has actually found that 70% of music carried on portable music players have been legally obtained, contradicting what Microsoft and the music industry have been assuming up until now.  In the survey, an average of 44% of music is obtained from CD collections, 25% purchased from music download stores and a further 19% illegally obtained from file sharing services.  Of the music ripped from CDs, 6% of this music has been obtained from borrowed CDs, which the music industry would consider illegally obtained.  The average person carries about 700 songs on their music player.

Despite the popularity of the iPod, so far the study reveals that only one in five people actually have a portable music player, but this figure is growing at roughly 5% per year.  When the people were surveyed about their interested in portable video and radio, about 1/3 of those aged 12 to 24 were interested in portable video player and almost 1/2 were interested in having a built-in radio.  However, when people from the age of 24 to 54 were surveyed, the interest in portable video fell to only 1 in 6 people.  Thanks to RTV71 for letting us know about this news: 

As consumers have the ability to download specific songs they like from a file sharing network, but are forced to buy full albums when they purchase a CD for one or two songs they like on the album, it would be interesting to see what the legal to illegal ratio of music that consumers actually listen to on their portable players.  For example, with the huge storage space on most of the iPods and other HDD based music players, most consumers simply rip full CDs instead of picking out their favourite titles, where as when it comes to file sharing services, consumers tend to prefer downloading by individual songs instead of by album, so while one may have a smaller collection of music obtained freely from P2P than what they have on CD, chances are that they may have more favourite songs in their P2P collection than in their entire CD collection.

Source: Ars Technica