October 15, 2011

Music business association NARM and The NPD Group released findings of a joint study that examined the ways consumers discover new music. The report indicates that while music discovery is still vital to the industry, it applies differently to various consumer groups, and it has changed significantly since the organizations last studied the topic in 2007, as television and social media and other digital services have emerged as major influencers.

According to the study’s findings, more than 80 percent of all respondents were interested in learning about new music from artists they were already fans of, and 60 percent were interested in learning about unfamiliar artists in genres that they usually buy. AM/FM radio and family/friends/coworkers are the most common avenues for discovery, and discovery via online radio and Web videos were also important for the most active music fans. Taken in aggregate, television (which includes competitions, awards programs, online video outlets, and scripted series) is also extremely influential. Since 2007 retail stores have declined in importance as a place to discover new music; however, people that shop for music at retail stores are more likely to buy the music they discover there than from other sources.

“Now that we have these insights, the music industry can look at how to deliver to consumers the information they want about new music,” said Jim Donio, president of NARM. “We have identified several areas where we believe we can move the needle and convert that discovery to a retail experience of some kind. For example, people hear music they like, but because of lack of identification, they dont learn the artist’s name or the song title, so they cannot seek out that track again – more promotion of song recognition apps and stressing the importance of back announcing could go a long way to improve that situation.”

“As technology and music distribution has evolved, it’s fascinating how diverse the music fan base has adapted since the last time we conducted this study," said Russ Crupnick, senior vice president of The NPD Group. "On one hand you have fans who can’t find enough ways to learn about new music, whether it’s at retail, through apps and social networks, or on radio and TV. On the other hand there is still a large core group who learns by listening to AM/FM radio and on family shopping trips. Regardless of the type of music fan, there are actions the industry can take to improve the discovery process, and help drive revenue."

Consumer Groups

According to the report, music consumers can be broken into five segments: “Committed,” “Convert,” “Comfortable,” “Casual,” and “Content.” “Committed” consumers are the youngest group, with a mean age of 32 (20 percent are age 13 to 17; 42 percent are 18 to 35). They represent 10 percent of all consumers who listened to or purchased music within the prior three months. “Committed” consumers also account for 46 percent of per-capita spending on music, and they are the most engaged consumers in the report. While they use a variety of discovery sources – including radio, video, streaming, and movies – they also value ownership, and they are the most open to discovering new artists. They find their current means to discover new music is good, but still wonder if they are missing something.

“Converts,” who make up 30 percent of musically active consumers and account for 34 percent of per-capita spending, are the second youngest group, with a mean age of 34 (13 percent teens; 23 percent are 18 to 25 years old). They also listen to music in a variety of ways and are more likely than the average consumer to purchase CDs or digital downloads. They are generally satisfied with their means of music discovery, but they would still consider other options.

Those in the “Comfortable” group make up 30 percent of musically active consumers and account for 15 percent of per-capita spending on music. With a mean age of 50, they are considered the mainstream segment. These individuals mostly listen to music on CD or on AM/FM radio, and they prefer to discover new music from familiar artists. They also rely primarily on television and radio to find new music, and they feel those methods are adequate for their needs; they are not interested in new ways to discover

“Casual” listeners, who make up 14 percent of musically active listeners and account for 3 percent of per-capita music spending, have a mean age of 43. They are also lighter listeners than average, they rarely buy music, and they have low interest in digital sources and discovery.

The “Content” group, which make up 11 percent of musically active consumers and account for 2 percent of per-capita music spending, have a mean age of 55. They are the lightest buyers and listeners, and while they periodically buy CDs, they do not find current music engaging.

Discovery Tools

The study found that television has emerged as the second-most influential tool for music discovery, with 49 percent of musically active consumers citing it as a top influence. Television is particularly effective for targeting the mainstream “Comfortable” group, as well as women and brick-and-mortar store shoppers. Awards shows, music videos, competition shows, daytime TV, and serial shows are the programs most likely to be effective for music discovery.

Television was trumped only by AM/FM radio, the most important tool for music discovery, with 60 percent of musically active consumers citing it as a top influence; however, most of those who cited radio also reported they would wait to hear a new song again, rather than purchase the track. This finding suggests a need for more back announcing, since three out of four of those who said they would wait also said they would shop more if there were more announcements revealing artist names and
track titles.

While radio and TV were the clear-cut top traditional choices for music discovery, Intenet music discovery options are much more fragmented. Shazam and other song-ID apps, as well as other mobile/tablet apps, are most likely to lead to high-value actions, like paying for a CD or digital download.

Free online radio, video sites like YouTube and Vevo, and other emerging forms of influence are more likely to cause listeners to continue to stream songs, rather than buy them.

“Another leading way all consumer groups discovered music were recommendations from family, friends, and co-workers,” added Donio. “This study was completed before the announcement of Facebook’s music initiative, and we look forward to seeing how the more complete integration of music and social media will change consumer habits. Music discovery drives the success of the emusic retail industry, and this intelligence about consumer behavior is critical, as we work to find the right combinations of options to help people find new music and make it a part of their lives.”

NPD conducted this study in August of this year, and the results are based on 3,771 completed online surveys.

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