NIELSEN MUSIC 360 CANADA REPORT 2016 HIGHLIGHTS

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1 1 NIELSEN MUSIC 360 CANADA REPORT 2016 HIGHLIGHTS

2 TABLE OF CONTENTS How We Consume Music... 4 How We Discover Music... 5 How We Spend on Music... 6 The Streaming Opportunity... 7 Methodology... 8 Report Content Summary MUSIC 360 CANADA 2016 HIGHLIGHTS

3 2016 NIELSEN MUSIC 360 CANADA Music listening in Canada remains as popular as it ever has been, driven by new music services and great new music by home-grown superstar artists (Drake, Bieber, The Weeknd to name a few). What continues to change, however, is how fans are accessing and engaging with music. While physical album sales continue to decline, Canadians are attending more, and spending more of their money on live events. Teens and Millennials are spending more on streaming has also seen a shift toward mobile devices especially to smartphones and tablets, a trend driven by Teens and Millennials that is likely to continue into the foreseeable future. As music consumption moves to mobile devices, those streaming services that are utilized most by the mobile crowd will become even more influential. The pages here represent a selection of highlights from the Nielsen Music 360 Canada 2016 Report, now in its third year. Nielsen Music 360 Canada is a comprehensive, in-depth study of consumer interaction with music in Canada. The study looks at who music fans are, when and where they are consuming content (of all types, not just music) and what brands, devices and services they love. The Report features indepth insights on Consumer Segments (e.g. Millennials, Francophones), Audience Insights, Discovery, Share of Time and Wallet, Social Media, Brands and much more. Clients use Nielsen Music 360 Canada to gain a deep understanding of their most valuable consumers and to develop strategies that grow their brands, audiences and services. The full study is available as a syndicated report. There are also opportunities for further analyses against custom targets (e.g. for a specific genre, demographic or certain device user, etc.) Additionally, the entire study can be made available through a desktop crosstab application. Call us today to find out more about the study and how you can grow your brand through music. Copyright 2016 The Nielsen Company 3 3

4 HOW WE CONSUME MUSIC MUSIC CONSUMPTION IS INCREASINGLY MOBILE BUT IT S STILL STRONG Music listening is as popular ever, 90% of Canadians listen to music (93% of Teens and Millennials) and do so for an average of 24 hours per week. The consumption of music continues to shift toward mobile devices, especially smartphones. The popularity of music and shift toward mobile will likely continue in the future, particularly because music and mobile are even more popular with Teens and Millennials 56% of Teens and Millennials listen to music on their smartphones in a typical week. MUSIC CONSUMPTION LISTEN TO MUSIC 24 HOURS IS THE AVERAGE TIME PER WEEK SPENT CANADIANS TEENS & MILLENNIALS EVERY WEEK 90% 93% SMARTPHONES IN A TYPICAL WEEK 34% 56% ONLINE IN A TYPICAL WEEK 70% 87% Nielsen Music 360 Canada CZL. Identifies Music Listeners CZ2. Total Time with Music - Typical Week CACT: Which of the following activities, if any, have you done in the past 12 months? xcnb. Thinking about a typical week, which of the following physical devices do you use to listen to music? Base: Total: 2016 (2552), 2015 (2518); Music Listeners & Device Owners: 2016 (2253), 2015 (2193) For an in-depth look at how fans are consuming music, get the complete Nielsen Music 360 Canada 2016 Report. for details. 4 Copyright 2015 The Nielsen Company MUSIC 360 CANADA 2016 HIGHLIGHTS 4

5 HOW WE DISCOVER MUSIC WHILE RADIO REMAINS THE TOP SOURCE FOR MUSIC DISCOVERY, THERE IS A SHIFT TO ONLINE AM/FM CONSUMPTION Radio remains the primary method of music discovery, with more people discovering music via AM/FM radio online compared to last year (21% vs. 11% 2015). While discovery via online music streaming services is also trending upwards, AM/FM radio is the most popular method of discovery for Millennials. MUSIC DISCOVERY ALL RADIO (Net) Listening to AM/FM Radio 'over the air' Listening to AM/FM Radio station online Listening to Satellite Radio Listening to Cable Audio Friends/relatives Movies/Movie soundtracks TV Online audio or video streaming websites/apps Social media websites/apps Browsing online music stores 65% 52% 21% 9% 7% 40% 30% 22% 21% 20% 14% 2015: 61% 2015: 11% 2015: 13% 2015: 19% AM/FM RADIO IS THE MOST POPULAR METHOD OF DISCOVERY FOR MILLENNIALS. 58% OF TEENS DISCOVER VIA FRIENDS/RELATIVES (HIGHEST METHOD OF DISCOVERY FOR THEM). ABOUT 33% OF TEENS & MILLENNIALS DISCOVER VIA AUDIO/VIDEO STREAMING AND/OR SOCIAL MEDIA. Nielsen Music 360 Canada CM5. Which of the following are ways you discover new music? Base: Total: 2016 (2552), 2015 (2518) To see how music discovery varies by consumer, get the complete Nielsen Music 360 Canada 2016 Report. for details. Copyright 2016 The Nielsen Company 5 5

6 HOW WE SPEND ON MUSIC Canadian music consumers music-related expenditure is increasingly being allocated to live, experiential events and paid streaming services. More than half of all music expenditure is dedicated to live events, and Teens and Millennials have more than doubled their spend allocation on streaming over the past year. CANADIANS TEENS MILLENNIALS 33% 31% 27% 27% 30% 24% 12% 14% 12% 9% 11% 12% 5% 4% 4% 3% + 9% 6% 3% + 133% 7% 3% 133% 7% 2% 4% 13% 13% 17% 14% 20% 16% 21% 11% 11% 18% 14% 11% 5% 7% 4% 8% 9% 8% 7% 7% 7% 5% 4% + 6% 3% 6% 7% 7% 9% 33% 12% BUYING ADMISSION TO LIVE MUSIC CONCERTS BUYING ADMISSIONS TO MUSIC FESTIVALS SATELLITE RADIO SUBSCRIPTION PAID ONLINE MUSIC STREAMING SERVICES BUYING PHYSICAL FORMS OF MUSIC (I.E. CDS, VINYL, ETC.) BUYING DIGITAL TRACKS/ALBUMS BUYING MUSIC GIFT CARDS FOR OTHERS PAYING COVER TO SMALL LIVE MUSIC SESSIONS BUYING ADMISSION TO DJ EVENT Nielsen Music 360 Canada CSWA. In a typical year, about how much money do you spend on the following entertainment activities? Base: Total: 2016 (2552), 2015 (2518), Teens (Age 13-17): 2016 (415), 2015 (391) & Millennials (Age 18-34): 2016 (1151), 2015 (1028) To learn more about how music spend varies by consumer, get the complete Nielsen Music 360 Canada 2016 Report. for details. 6 Copyright 2015 The Nielsen Company MUSIC 360 CANADA 2016 HIGHLIGHTS 6

7 THE STREAMING OPPORTUNITY As music consumption especially for Teens and Millennials moves to mobile devices, those streaming services that cater to the mobile crowd will become more and more influential. When selecting a music streaming service, between 75-81% of streamers mention that cost and ease of use are most important. Nine percent of those that currently do not pay for streaming indicate they are likely to subscribe in the next six months. The most common reason cited as a reason to not subscribe is the price. However, those that do pay for streaming spend more on music overall. A services song library is of particular importance to Millennials as they decide whether to pay for streaming. In this regard, exclusivity will likely become more and more important when services look to convert younger listeners to paid streamers. CANADIAN MUSIC CONSUMERS TEENS & MILLENNIALS 81% 79% 75% 74% 66% 75% COST EASE OF USE SONG LIBRARY THE STREAMING OPPORTUNITY LIKELY TO PAY FOR STREAMING SERVICE IN NEXT 6 MONTHS 16% Teens & Millennials 9% 13% 78% VERY/SOMEWHAT LIKELY NEITHER LIKELY NOR UNLIKELY SOMEWHAT/VERY UNLIKELY TOTAL MUSIC SPEND PAID STREAMERS spend over 2.7X as much on music than NON-PAID STREAMERS PAID STREAMERS spend over 2.3X as much on Live Events than NON-PAID STREAMERS Nielsen Music 360 Canada CFE: How important are each of the following features to you, when choosing a music streaming service to use? Base: Music Listeners & Streamers - Total (1818), Teens & Millennials (1350) CPAYN. Likely to Pay for Online Music Streaming Services in Next 6 Months Base: Do Not Currently Subscribe (2355) TO GET THE COMPLETE NIELSEN MUSIC 360 CANADA REPORT today. Copyright 2016 The Nielsen Company 7 7

8 NIELSEN MUSIC 360 CANADA 2016 METHODOLOGY T he Nielsen Music 360: Canada Report is a comprehensive, in-depth study of consumer interaction with music in Canada. Data for this study was collected March 26 to April 14, 2016 among 3,519 consumers ages 13+, general population n = 2,552. Surveys were conducted online using a third party panel in both English and French. Data was weighted to the Canadian census population based on age, gender, region, education and household size. T his is the syndicated report, containing notable highlights about consumer behavior with relation to music. There are also opportunities for further analyses against custom targets (i.e. for a specific genre, or certain device users, etc.). Additionally, the entire study can be made available through a desktop crosstab application. TO GET THE COMPLETE NIELSEN MUSIC 360 CANADA REPORT TODAY. 8 Copyright 2015 The Nielsen Company MUSIC 360 CANADA 2016 HIGHLIGHTS 8

9 NIELSEN MUSIC 360 CANADA CONTENT SUMMARY The following summary outlines the key topics in the Nielsen Music 360 Canada Report. KEY CONSUMER SEGMENTS (included but not limited to) General Population 13+ Millennials Teens Francophones Music Streamers (Audio/Video) Audio Streamers Paid Streamers Radio Listeners Music Festival Attendees PANELIST ATTRIBUTES Age Gender Household member demographics Household income Education Region Post Code Employment Status Marriage Status LEISURE TIME USE Time spent on music listening as both a primary and background activity. Money spent purchasing music in different formats and admission to live music events. Weekly hours spent engaged in all selected entertainment consumption activities % of time spent with each channel of music listening Listening in the home and out of home Weekly hours spend listening to music in the background Annual money spent on entertainment MEDIA CONSUMPTION Device ownership Social network connectivity Entertainment consumption activities (Music/Movies/Books) Tech brand preferences Which platforms are used to listen to, stay informed about, or follow musicians On which devices each medium Is used and in what context STREAMING MUSIC Streaming: How many people? How has this grown? Audio or video? What services are they using? How many services do people use? How often? How much time with streaming v. radio? How likely are people to pay for streaming? Streaming music subscriptions, current, intent to subscribe Length of time subscribed Loyalty, satisfaction with services Rating services on attributes Adoption of new services as they come available Perceptions about commercials Availability of tracks (i.e. windowing) and implications Passive vs. active listening Activities: playlists, sharing, etc. Streaming as a driver of purchasing Streaming in car Music/video streaming capabilities in home Online concerts/events Awareness of different music services Paid streaming market profile - Profile of current users and prospective paid streaming users - Barriers to paying for streaming - Opportunities to activate new paid streaming subscribers - Value of streaming to the market RADIO LISTENING (BASE: RADIO LISTENERS) Radio-listeners v. streamers? What is the overlap? Where are each taking place? What s winning in the car? (Radio v. Streaming, which streaming service is winning?) Time of day tuned in weekdays/weekends Weekly/monthly listening across platforms In car and office online radio usage Perceived changes in radio listening year over year Interest in listening to AM/FM radio on a smartphone MUSIC DISCOVERY BEHAVIOR How are people discovering new music? Millennials? Radio Listeners? Streamers? Platforms used Frequency of use Rating of helpfulness Preferred attributes of frequented sites MUSIC ACQUISITION DEEP DIVE Quantity of CDs purchase for self/others. Total and per retailer Annual dollars spent at digital retailers Genres purchased Devices purchased for Free music acquisition (Copies, downloaded tracks, stream ripped, video stream ripped) Frequency of torrent/download sites used LIVE MUSIC CONSUMPTION (BASE: LIVE EVENT ATTENDEES) Who is attending live events? Who is going to festivals? How much awareness is there of festivals? How do they choose the festival? Annual number of events attended by size/type Past major festival attendance Future major festival attendance plans With whom are events attended Social behavior while attending via Smartphone BRANDED ACTIVATIONS Favourability toward brands who are involved with music in various ways (tours, exclusive downloads, sweepstakes, VIP options, pre-sales, etc.) Brand associations with music MOBILE MUSIC (BASE: SMARTPHONE/TABLET OWNERS) Hardware, service providers, Operating System used How consumers are listening and engaging on their devices BEHAVIORAL PROFILE SELF ASSESSMENT (SCALE OF 1-5 AGREE/DISAGREE) Example statements: I am often the first to try new technologies A smartphones is my primary entertainment device - it s my go to device for social connections, music, videos, games, etc. It is important to me to always have the latest technology I am the type of person that is loyal to brands that I like When I really like a brand, I tell my friends about it Whenever I go shopping, I typically buy a little something extra that was unplanned - an impulse purchase MUSIC FANHOOD SELF ASSESSEMENT LEVEL (SCALE OF 1-5 AGREE/DISAGREE) Example statements: I connect with friends and family through music My friends think of me as a trendsetter when it comes to music I like it when I have the inside scoop about the music that I like, when I know/learn something that my friends don t know yet I would like to know more about the creative process from the musicians/bands I like I try to see my favourite artists whenever they tour or play a show near me The local independent record store sells music that reflects my musical tastes and preferences I ve purchased t-shirts or other merchandise from my favourite artist in the last year Independent music has more artistic integrity than mainstream/commercial music New technologies and services (such as streaming, shared playlists, etc. ) have made it easier for me to discover new musicians/bands that I like I don t buy as much music as I used to because I am streaming music free from the internet I could afford to spend more money on music than I do I listen to music on YouTube the way that other people listen to radio Music is an impulse buy for me; I don t plan ahead MARKETING Brand favourability based on music marketing strategies like sponsorships, product placement, promotional materials, etc. Fan level for specific artists. Brand awareness / favourability How became aware of different music festivals TO RECEIVE THE FULL REPORT, CALL YOUR NIELSEN REPRESENTATIVE OR Copyright 2016 The Nielsen Company 9 Copyright 2015 The Nielsen Company 9

10 ABOUT NIELSEN Nielsen Holdings plc (NYSE: NLSN) is a global performance management company that provides a comprehensive understanding of what consumers watch and buy. Nielsen s Watch segment provides media and advertising clients with Total Audience measurement services for all devices on which content video, audio and text is consumed. The Buy segment offers consumer packaged goods manufacturers and retailers the industry s only global view of retail performance measurement. By integrating information from its Watch and Buy segments and other data sources, Nielsen also provides its clients with analytics that help improve performance. Nielsen, an S&P 500 company, has operations in over 100 countries, covering more than 90% of the world s population. For more information, visit Copyright 2016 The Nielsen Company. All rights reserved. Nielsen and the Nielsen logo are trademarks or registered trademarks of CZT/ACN Trademarks, L.L.C. Other product and service names are trademarks or registered trademarks of their respective companies.15/9032 9

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