Digital music consumption and digital music access

Transcription

1 January 2011 Digital music consumption and digital music access More music available, in a prolific ecosystem: the hyper-fragmented market offer unprecedented opportunities and challenges where both the consumers and the industry need to find their way 1

2 Table of Contents 1. Introduction 2. The hyper-fragmentation of music usage and music consumption habits 3. How frequently does the audience engage with music? 4. A focus on the watch consumption: the popularity of the music video 5. Conclusion 2

3 1. INTRODUCTION In the first insight about music consumers worldwide published with MIDEM in December 2010, Nielsen Music explored streaming and mobile apps ( In this second part of our analysis, we are exploring more broadly the music consumers and their digital behaviours: music consumption, access and listening activities and engagement. This analysis is based on a survey conducted by Nielsen (survey of 26,644 online consumers in 53 markets across the globe during September 2010). The broad set of questions covered music purchasing and listening habits. This insight addresses how music listeners are being exposed to, and consume music. With multiple channels to expose music and generate revenue, there are broad opportunities, but the fragmented market leads to complexity. The consumers themselves are not a single block: the audience is fragmented and segmented. Engagement level varies broadly, based on demographic, and also on how music is accessed. Finally, and a paradox for a primarily audio-only medium, the main share of ear comes from the audio-visual experience of watching music. 3

4 2. THE HYPER-FRAGMENTATION OF MUSIC USAGE AND MUSIC CONSUMPTION HABITS Amongst music listeners globally, consumption habits are diverse. Nielsen Music has been investigating exposure to and expenditure on music by online consumers. Firstly, there is no single channel being used by even 60% of the global online audience. Secondly, nine channels of music consumption are each used by 20% or more of global online music consumers. The most popular form of music consumption polled by Nielsen was the watch habit: 57% have watched music videos on computers in the last three months. Sites like YouTube are a mainstream channel. Just behind watch in global popularity comes the traditional area of concern of the music industry - consumers downloading a song from the internet without paying for it. Many of the online consumers who have been surveyed declare having undertaken this activity: nearly 50% of the global online population in the last three months, although this number varies greatly from region to region: being highest in Asia-Pacific, Latin America and Middle East / Africa, and far less in Europe and the US. However, it is key to keep in mind that these figures do not reflect the volume of downloads nor that this activity is necessarily illegal, as free legal digital downloads can be obtained. Other learnings from our survey show the growing importance of IT and telecom devices, whether used for music streaming on a computer (26%), streaming music on a mobile phone (21%), watching music video on mobile phones (23%) and downloading or using music apps (20%). 0% 10% 20% 30% 40% 50% 60% Watched music videos on computer Downloaded a song from the internet without paying for it Streamed music on my computer Watched music videos on mobile phone Streamed music on my mobile phone from a music mobile application Downloaded or used music apps on my mobile phone Paid to download a music track to my computer Paid to download a whole digital album to my computer 4

5 Slightly less popular music consumption methods are digitally downloading a full album or a single track neither reached 20% of the global online audience. To no surprise, as downloading music is one of the many sources to be exposed to music (most of them new sources compared to the CD-only era). Beyond the complexity of a multi-channel music environment, consumer segmentation offers another challenge to the industry. Dealing with an hyper-fragmented audience: The younger end of the age scale, the digital natives, remain the most active on the internet. More than 50% (globally) have downloaded a song from the internet for free in the last three months (not necessarily an illegal activity). But in addition, slightly more than 20% of respondents aged 34 and under have paid to download a music track to their computer in the last three months. From age 35 onwards, this percentage drops regularly and significantly. There seems to be a core digital music audience: between 21 and 34. These music consumers will do more of everything than the average: they watch more music videos (on the computer or TV), they download more songs (paid or not), they stream music more. Beyond 35, there is a slight but consistent erosion of music consumption from any of these channels. Watched music videos on a computer Downloaded a song from the internet without paying for it Streamed music on computer 80% 70% 60% 50% 40% 30% 20% 10% 0% Under to to to to to to to to to and over 5

6 Digital tracks on your Computer Internet video services Streaming Services on you Computer Social Media sites Web Radio Digital track on your Mobile Music application on your mobile Handheld multimedia device - not a phone Streaming Services on you Mobile Artist Websites Through an in-home video game system 3. HOW FREQUENTLY DOES THE AUDIENCE ENGAGE WITH MUSIC? Accessing digital tracks on the computer is essential: 49% of the global online music consumers access their music this way several times a week (and 28% of global consumers access their digital tracks daily). 44% of online global consumers access internet video services several times a week. Streaming music via a computer (at 36%) and accessing music via social networking sites (35%) are the next most popular consumption methods in the last three months. Portability does not score as highly: 30% of the audience listen to music tracks on their mobile phone several times a week,and 27% on other mobile devices like MP3 players. It is worth noting that these different sources of music are not exclusive. The global online consumer is expected to use and engage with several channels; however, this is a sense of hierarchy on how the users interrelates with each source. Several times a week Have not listened to music from this source in the past 3 months 80% 70% 60% 50% 40% 30% 20% 10% 0% 6

7 4. A FOCUS ON THE WATCH CONSUMPTION: THE POPULARITY OF THE MUSIC VIDEO Many artists will produce a music video to help promote themselves and their song. And 57% of the online global consumers polled had watched a music video on their computer in the last 3 months. Fewer, but still over 20%, of online global consumers had watched a music video on a mobile phone. Music video watching on phones is not restricted to smartphones, there are many feature phones which have music video capabilities. This figure may also be partly attributed to a number of device manufacturers pre-loading their mobile phones with music videos to demonstrate the music video capabilities of the device. However, with smartphone penetration increasing and mobile phone networks improving, the phone may be a growth area for music video. Globally 22% of online respondents own a smartphone (one in four consumers in Asia Pacific and one in five of consumers in Europe) and another 22 percent said they planned to definitely or probably purchase a smartphone in the next 12 months. Watched music videos on mobile phone Watched music videos on computer 0% 10% 20% 30% 40% 50% 60% 7

8 Gender Breakdown women and men equally participate in watching music videos on their computer. However, men are more fond of watching videos on their mobile phone. Male Female 70% 60% 50% 40% 30% 20% 10% 0% Watched music videos on a computer Watched music videos on mobile phone Age breakdown - age makes a bigger difference in consumer s music video watching preference than gender. The younger the consumer, the more likely they are to have consumed music videos via either of the media. Consumption via computer is more popular than watching on a mobile phone across all age groups. But as age rises, the disparity between watching on a computer and on a mobile phone also rises. 8

9 Age breakdown - age makes a bigger difference in consumer s music video watching preference than gender. The younger the consumer, the more likely they are to have consumed music videos via either of the media. Consumption via computer is more popular than watching on a mobile phone across all age groups. But as age rises, the disparity between watching on a computer and on a mobile phone also rises. Watched music videos on a computer Watched music videos on mobile phone 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Under 20 to to to to to to to to Music video, whilst not a new invention, remains a primary means of accessing music for the consumer and marketing music for the artist or record label. And it remains hugely popular with the consumers. With the technological advances and global appetites for internet and mobile phone connectivity the music video will probably remain a key method of reaching the music audience. 9

10 5. CONCLUSION Unlike in the CD era, there is no one-size-fits-all music consumption channel. Looking at the many to many channels of exposing, distributing and selling music, the opportunities are broader than ever, from one standpoint. But on the flipside, the very many opportunities of the industry are also its main challenges, a potential catch-22 situation. Given the consumer engagement covered in this report, the various music exposure and consumption channels will be played together, with the view to optimize the marketing mix and the channel mix. At stake, it is not only about maximizing the share of ear, but also the share of wallet. 10

11 About the author Nielsen Music is the measurement reference of the music industry, and the market data and research partner of choice for the music sector. Our local and international teams of research and music experts bring the best set of comprehensive, robust and quality insights to our music clients. With Nielsen Music, access, understand and interrogate: What music is played on radio and music television (airplay monitoring); we are the only respected and official brand for charts and provide detailed analysis with both local and international coverage. What is sold (sales tracking); tracking of digital sales globally and physical sales in selected countries. What is said and by whom; measurement of internet behaviour and consumer generated media (buzz). What is advertised and where; complete advertising information. Who your customers are: significant global consumer and ad-hoc research capabilities. Nielsen Music is successfully working with more than 500 clients representing all elements of the music chain: record companies/music labels (majors and independents), radio and TV stations, music publishers, performing rights organisations, artists and their management, digital media and services, mobile phone companies, retailers, the video game/gaming industry, consultancy firms, and the media. Nielsen Music ( is a division of Nielsen ( the leading global market research company. Contact details: Jean Littolff Managing Director, Nielsen Music International (jean.littolff@nielsen.com) Helena Kosinski International Marketing Manager, Nielsen Music International (h.kosinski@nielsenmusiccontrol.com) This report is brought to you by MIDEM MIDEM is the most important event for the world s music community, providing valuable knowledge and connections to source business and find solutions. MidemNet is the definitive event for monetising music in the digital age. MIDEM/MidemNet takes place every 3 rd week of January and brings together 7,200 professionals from more than 3,200 different companies and 78 countries, and 400 international journalists. Contact us: info.midem@reedmidem.com Visit MIDEM website - Follow us SHARE THIS REPORT ON AND TWITTER Download MIDEM iphone App 11