Music Spending: The Same As It Ever Was?

SXSW is rapidly becoming THE place for all types of announcement and product releases, from hardware to software, album releases to media studies. Where once other conferences like MacWorld, New Music Seminar, MIDEM or MusicTech were the center of attention, they've all ceded their importance to the show held yearly in Austin.

And since the music world is now revolving around SXSW, it's only appropriate that Nielsen Entertainment should introduce their latest study of spending on music there. The study looked at the consumption habits of 4,000 "music fans," who's category accounts for 75% of music spending in the US, and takes into account everything from the purchase of music, concert tickets and artist merchandise.

As you can see from the infographic below, the most serious music fans, the "aficionados," can spend as much as $422 a year on music. The fact is that Nielsen also discovered that they illegally file share more than any other segment, with an average of 30 a year, which didn't seem to impair their actual spending on music music (perhaps it even enhanced it). This segment accounts for as much as 40% of music spending.

The next segment spends between $196 and $363 per year, with a subcategory called "Big Box" who shop at mass retailers partial to pop and country music.

Finally, the least engaged consumer spent between $44 and $121 per year on music. 60% of this category has never seen their favorite artist live and is more likely to use a free streaming service like Pandora. 25% of these use Spotify or Rhapsody.

I don't know that the general findings of this study are any different from any other era or decade of music. There's always been a multi-tiered system of music consumers that ranged from ambivalent to passionate to aficionado, so that hasn't changed. I don't even think that the spend levels have changed much, adjusted for inflation. In fact, this probably holds true for other segments of the entertainment industry as well.

What is interesting is the way music is being consumed, as shown by the study. Take notice the differences between the category between CD sales (purple) and digital tracks (orange). Then take notice how much live events (red) make up each category. Finally, check out where paid online subscription comes in (dark green).

This all goes to show that, if anything, there's a chance industry growth. In fact, Nielsen exec David Bakula estimates that it could grow as much as $2.6 billion, which is certainly good news for the for anyone with ties to the business.

The study does point out what everyone seems to forget is that when we speak of the "music industry;" there's a lot more to it than just recorded music. While recorded music is less than half of what it was at its peak, the rest of the business remains somewhat healthy.

----------------------------------

Help support this blog. Any purchases made through our Amazon links help support this website with no cost to you.

Interested in the Music 3.0 archives? Buy The Music 3.0 Guide To Social Media. The best of over 800 posts.

You should follow me on Twitter for daily news and updates on production and the music business.

Check out my Big Picture blog for discussion on common music, engineering and production tips and tricks.