A University of Western Sydney study, one of the first on people's online music habits, involved 100 baby boomers and 100 people aged between 29 and 14, known as Generation Y.
While 38 per cent of respondents admitted to illegally downloading music, most said they bought music through traditional means.
"Sixty-eight per cent of both generations surveyed continue to buy albums through traditional retailers because they prefer the original copy, like being able to look at other CDs while shopping, or like being able to listen to new CDs," researcher Geoffrey Lee says.
The study finds members of Generation Y are more likely than baby boomers to illegally download music, with 54 per cent indicating they visit music websites at least once a week to do so.
That compares with just 10 per cent of baby boomers.
Both generations understood that downloading music without paying for it was illegal, Lee said.
However, while baby boomers expressed concern, saying they knew they were stealing, the younger generation was less likely to care.
"The main reasons for downloading included: being able to listen to the song on their PC, being able to burn songs to a CD because it's cheaper than the original CD and being able to sample the song before purchasing," Lee says.
"No one from either group said they had paid to download music."
More people would be recruited to expand the study's findings, which is aimed at helping stop music piracy, Lee says.
Illegal downloading of music in Australia is estimated to reduce sales by 10 per cent.
"Internet piracy is becoming a huge issue for record companies globally, as it eats away at their profits," Lee says.
"It is one of the music industry's greatest hurdles if record companies are to remain viable.
"Traditional legislative and technological barriers have so far been unsuccessful in stopping offenders and it remains a difficult thing for record companies to police.
"We hope the study will shed some much-needed light on the problem, and that the results can be of practical use to the music industry."