Based on fresh research from 2,000 respondents in the UK, Media Insight Consulting CEO Chris Carey opened AIM’s Indie-Con 2017 by revealing how consumers are (or aren’t) paying for music, where and how they are accessing it and what the future of ticketing could be (spoiler: it’s Amazon).
Here are the top 10 things we learned from his presentation.
Data shouldn’t make all the decisions
Of course an economist was always going to be self-reflexive about their own research methodology, but this also acted as a warning to those who draw on data in terms of how they use it and understand it.
“Data should be your muse,” said Carey. “In a music context, your creativity should be supported by your data and not the other way around. It should exist to make better decisions for your artists. It should be there to help you do the best job you can do […] It shouldn’t make all the decisions.”
Playlists are driving discovery more than radio…
Drawing on his company’s own research, based on a survey completed in January so it’s as fresh as it can possibly be, Carey said that 67% of 16-24-year-olds say streaming helps them discover music most, which was up from 56% in April 2016. “That is encouraging as you have a generation that is eager to discover,” he said. “Playlists, and not radio, is driving discovery [for them].”
…but radio is still hugely important for the mainstream consumer
“Radio still plays a massive part in music discovery and still plays a massive part in music listening,” said Carey. “Three-quarters of people under 35 and 80% of people over 35 have engaged with radio at some point or another over the last three months. When it comes to being happy to listen to what’s on the radio, half the people are happy to just listen.”
At 33p a day, subscription streaming is far from overpriced
From their own research, they found that the vast majority of consumers on subscription services listen to music for up to two hours a day. Based on a £9.99 monthly subscription, this is a running cost of 33p a day. He said this is a key weapon the industry should be using to shut down those who crow about subscription streaming being prohibitively expensive.
The album is not dead… yet
Looking at the enduring nature of CD sales among respondents (albeit falling), the death of the album format has been greatly exaggerated, he argued. “The album is not dead,” Carey said. “And the CD is not dead – yet.”
YouTube is the most important listening channel and follow-up mechanism
This is obviously not going to land well with labels amid the ongoing arguments around the ‘value gap’. But for 30% of respondents, YouTube is their main listening channel for music; while for 31% of respondents it is the main follow-up mechanism (where they go to after they have discovered a song or an artist somewhere else).
There was bad news as well for the dedicated audio services, with 9% of all respondents using Spotify, 2% using Apple Music and 1% using Deezer. Most worryingly for the record business overall, 64% of YouTube users said they don’t need anything else for their music listening. 30% of people use YouTube as their main way of listening to music and a good proportion of them find it sufficient.
A few people pay for multiple services but well over half will never pay for one
The industry dilemma pegged out in horrifying detail. While 7% of respondents (and 10% of males) said they had multiple subscription services (anecdotally, Carey said this was down to people having a service rolled into their mobile account or Amazon account that they rarely used while paying for one they did), a chilling 58% said they would never pay for one.
Of course this will be partly down to education and marketing to get them onside, but the bulk of the UK say they are beyond the reach of subscription streaming.
Less than a third of the UK population is the total addressable audience for subscriptions
Stripping out from the data those who say they will never pay for a subscription service and those who run multiple subscriptions, Carey estimates around 30% of the UK population is the total addressable audience for subscription services. He feels this is still a hugely lucrative market if it can be cracked, though.
Spotify will endure – despite not having a sugar daddy
Carey talked about how he technically has access to Amazon Music as part of his Prime account but never uses it. The real trick for services is finding a way to ensure customers stay and the best way to do that is via playlists – as it becomes too much of a chore to take them anywhere else. “That is a big part of why Spotify will be resilient despite not having a sugar daddy to subsidise it,” he proposed.
Amazon will surprise everyone in the ticketing space
Going into the live market and looking the new wave of ticket retailers, it is Amazon that is winning the war of public perception despite only tentatively moving into this space.
Respondents were asked who they would like to buy gig tickets from in the future and Carey said that Amazon, at 30%, “scores incredibly highly” in terms of public perception of being a ticket retailer. “That is going to be a really interesting one to watch in the next 12-18 months,” he said.