Today MIDiA Consulting published a report: Decoding the Digital Music Consumer. The report deep dives into the music activity of UK consumers leveraging data from a brand new MIDiA consumer survey.
The music industry is in a peculiar spot: digital is where all the momentum is and yet it remains but a small part of the equation. Across the globe digital accounted for just 25% of recorded music revenues outside of the UK and US in 2012 but even in the UK, one of the most digital markets, traditional consumption modes still dominate (see figure one).
These are some of the key findings from the report:
- Radio and CD still outshine all digital music activities other than online music video
- 10 years after the launch of the iTunes Store, music download buyer penetration is just 14%, though album purchasing is now just as widespread as single track buying
- Music video is the only digital music activity that has gone mainstream so far
- Streaming adoption is still relatively niche and paid subscriptions stand at just 4% penetration
- Pricing, commitment issues and trepidation all act as barriers to consumer adoption of subscription services
- The CD still reigns even for digital consumers, with 55% of digital music buyers and 45% of music subscribers buying CDs at least monthly
- Non-Network Piracy is replacing P2P as the music sharing choice of Digital Natives, with Digital Immigrants still clinging to P2P
- A quarter of music subscribers are also pirates
- There is a music subscriber gender divide: 63% of subscribers are male
- Subscription service churn is going to become a major component of the digital market: 46% of the entire subscriber audience have either churned or plan to churn
Churn from subscription services will become an increasingly important part of the digital music landscape (see figure two). Looking at the entire base of consumers that have either previously been subscribers, currently are subscribers or plan to become one, 44% have either already churned or plan to do so. Just 32% are current subscribers that intend to remain so. This base of churned music subscribers poses a key challenge for the digital marketplace: these consumers have tasted unlimited on-demand music without ads, on their phones, but are now going cold turkey. The question is where they will get their next fix? If it is not from subscribing to another service then the illegal sector beckons. This is the challenge that the music industry must meet over the next couple of years. It must ensure that these consumers either reengage with full fat music services or instead are nudged towards lower price point alternatives.
The report is available free of charge to MIDiA clients and subscribers to Music Industry Blog. If you are not a subscriber to the blog but would like to subscribe please add your email address to the email subscription field on the right hand side of the blog home page. If you would like to learn more about how MIDiA can help you with your digital music strategy please email info AT midiaconsulting DOT COM or visit our website here www.midiaconsulting.com You can also find all previous free reports for download here: https://musicindustryblog.wordpress.com/free-reports/
Wow Mark…it’s hard to believe how little the digital music activities has had in comparison to CDs on the market front. As much as I like my Vinyl records, tapes and CDs (in that sequence), I know downloading/streaming is the new business model. We know that train is coming, so I have to assume that it’s just a matter of time when things will favor digital over brick & mortar I.P. Or perhaps this “delay”, points to a new paradigm change – outliers that we just don’t understand yet because the technology is not there to support the infrastructure.
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Would love to download the report and have just subscribed to the blog, but there’s no embedded download link here. Are you able to post one?
Dear Ben – you should have received the report by now – if not please email me at mark AT midiaconsulting DOT COM
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It’s going to be CDs and radio until you can listen to a stream in your car as easily as turning on the radio or popping a CD into the player (I don’t mean with adapters; I mean turn the knob and select a station). Same for your living room CD player.