Old Music Outsells New In 2015

Nielsen's latest music report is out and, as always, it's very revealing about what we listen to in the U.S. Perhaps it's biggest revelation is that, for the first time, old music (known as catalog sales) outsold new music in 2015.

Catalog is defined as a music release that's more than 18 months old. Of course, we're also talking about music sales and not streams, which is an entirely different matter.

That said, sales of older music came despite the huge sales numbers for Adele's giant 25 album, which was only available for sale and not as a stream. The album went on to sell 7.2 million copies in the last 6 weeks of 2015 in the U.S. alone.

But lest you think that CDs are completely dead, 2015 saw 125 million of them sold for about $1.52 billion in revenue, which is still a huge amount of money.

And that's only the CDs that were tallied by Soundscan. CDs sold privately on events and online aren't counted.

Beyond that, there were 103 million digital albums downloaded, and 11.9 million vinyl albums sold.

As you can see on the chart on the left, catalog music leads over new music in all facets of sales. I guess the "Long Tail Theory" must be working.

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Instagram Users Consume A Lot Of Music

Nielsen just completed a new study assessing Instagram user's music behaviors, and discovered a number interesting facts.

It turns out that Instagram users are above average music consumers. They spend more time listening, and they spend more money on music items than other music consumers for starters. They also take artist's live performances more seriously than most other music consumers.

Their tastes in music is also different, as they listen to more pop, hip-hop and R&B than other music consumers (check out the chart below).

They're also more than twice as likely to pay for a premium streaming tier than other users.

The upshot: if you're not on Instagram already, it's time to sign on, as there are a lot of music fans there.

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Who's The Biggest Label?

With the latest Nielsen music figures in for 2015, we begin to see the full picture of the music industry. One piece is how the major labels fit into the grand scheme of things, and Nielsen kindly hands us that info in a very digestible way.

So what's the market share of the majors and indies?

1. Universal Music Group has the largest market share by far at 38.5%

2. Sony Music is second at 29.5%

3. Warner Music Group comes in last at 18.7%.

4. Indie labels come in last at 12.6% of the market.

Indie labels can be looked at another way though. That 12.6% is for labels that are wholly operated and distributed. If you look add indie labels who have distribution through one of the majors, you find that their market share soars to 34.4% of the business.

Although most of the money is made by the 3 remaining majors, indie labels are still the lifeblood of the industry, and play an important part in the development of new artists.

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Physical Album Sales Actually Increased Last Year

After years of decline, physical album sales actually increased 1.1% in the U.S. in 2015, according to Nielsen.

There's a caveat there though. 3.6% of that came from Adele, and her 25 album was only available for 6 weeks. That album has sold over 7.4 million copies in the U.S. last year alone and is still going strong.

Digital album download sales fell by 1.1% last year, and according to BuzzAngle, song streams on audio platforms were up 99.2% to 137.5 billion. Song streams on video platforms like YouTube and Vevo were up almost as much at 97.9% to 168.6 billion.

And as we all expected, vinyl sales were up 56% to around $6 million in sales.

That's a pretty good year for music overall, and expect 2016 to be even better.

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Apple Music App Is Now Bigger Than Spotify

Apple Music may be lagging behind the other streaming networks in subscribers, but it's mobile app appears to be doing just fine. According to Nielsen, the Apple Music app is the 9th largest smartphone app with 54.5 million unique users.

This number may be deceiving, however. Nielsen calls them "active" users, but many users auto-downloaded the app and don't even realize that it's on their device.

The other apps on the list are pretty much as expected, with Facebook, YouTube, and various Google apps (Search, Play, Maps, Gmail) all higher than Apple Music.

That said, Apple Music is ahead of both Spotify and Pandora, both with far more subscribers.

So apps don't equal users, and as we all know, having an app on your phone or tablet doesn't necessarily mean that you're using it frequently or at all.

How many apps do you have that you don't use? Are you an Apple Music subscriber?

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168 Radio Stations Play Only Christmas Music

Christmas is a powerful time of the year for many people and for many reasons. So powerful in fact that 168 radio stations in the United States have converted their formats to full-time Holiday music, according to Nielsen.

That's not all. Hundreds of other stations across the country have also converted their formats to part-time Christmas music.

One of the downsides to this is the fact that there's less space than ever on already crowded playlists, to the point that superstars like Adele and Taylor Swift even get boxed out by the Xmas classics.

Speaking of which, even though most music stars try to cash in on the Christmas cheer with a Holiday release, they find it hard to break the stranglehold that songs from the 40s and 50s seem to have on radio at this time of year.

That said, I was recently on a cruise ship for a week where they didn't once play a familiar Christmas song by Bing Crosby, Burl Ives or Brenda Lee and never repeated a song the entire week, so there's lots of great Holiday music out there if only stations were willing to look.

In the meantime, take heart in the fact that on December 26th there will be 168 more radio stations back playing their regular formats, and Christmas music will be forgotten for another year.

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As Always, Female Buyers Still Fuel Pop Music Sales

What do Adele, Taylor Swift, Ed Sheeran and Sam Smith have in common? Most of the buyers of their albums are female, according to an article by Hannah Karp in the Wall Street Journal based on data from a number of market research firms.

While this info is probably no surprise to music execs who’ve inherently known this for decades, the new-found ability to have a greater understanding of an artist’s fans syncs more with the conventional industry wisdom than previously thought.

Take Adele, for instance. First of all, she’s an artist that goes completely against the grain of what the music business currently considers a pop star. She’s a full-figured women who has a relatively small social media footprint and no bombastic big-production stage show, yet she’s been crushing sales records by doing it the old fashioned way - with great songs and performances.

If you look closely at the demographic profile of her fans though, the sales records begin to make perfect sense.

According to the article, a Nielsen study funded by Sony Music found that 62% of Adele’s fans are female, between the ages of 25 and 44 years old, and have children. In other words, they’re soccer moms. What’s more, a majority of them work in the health care industry, drink light beer and Aquafina water, and are 80% more likely than average to read Parents magazine, for whatever that’s worth. To take it a step further, 28% of her fans are in the 50+ age bracket, according to music consumer research company Music Watch. Read more on Forbes.

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Hip-Hop Listeners Embrace Streaming More Than Other Genres

Hip-hop listeners have embraced streaming more than listeners of other genres, according to the numbers from the various streaming services. It appears that hip-hop and R&B artists have far more total monthly streams than any other type of music, including rock, which was previously thought to be the genre of choice for streamers.

For instance, Drake's “If You’re Reading This It’s Too Late” had 48 million streams in one week, according to Nielsen, while Kendrick Lamar’s “To Pimp a Butterfly” opened with 38 million and The Weekend’s “Beauty Behind the Madness” started with 57 million one week and 52 million the next.

Compare that with the top non-hip-hop artist, Mumford & Sons "Wilder Mind" at 15.4 million one week back in May, and it looks like streaming has a much different demographic than was previously thought.

No one has a good answer for why this is occurring, although many feel it has to do with increase in social presence from the major R&B artists. Some feel that Apple Music's Beats 1 radio service may be an influence, as an analysis of its playlists indicate that it skews towards hip-hop and R&B.

Whatever the reason, the numbers are a surprise and will warrant closer watching in the future.

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On A Positive Note - Music Sales Up Around The World

While we're used to hearing about the gloom and doom in the recorded music industry, it appears that the first half of 2015 has actually been a bright spot in sales.

At the halfway mark in the year, many countries that had previously seen their total sales slip recently have actually recorded increases, and all of it has come from digital music.

Germany, Italy, Sweden and Norway have all seen their CD sales drop by varying amounts, yet their total sales have risen, with streaming revenues rising to the forefront, according to Nielsen. The US and Canada also saw sales increase, although total revenue figures haven't been released.

One of the trends that mostly continues downward is what's known in the industry as Overall Album Consumption (OAC). It's increasingly turning into a single song world as more and more people abandon not only album purchases, but listening via streaming as well.

Interestingly enough, OAC is down in most countries, but actually increased by 14% in the first half of the year in the United States. No definitive reason has been sited, but the feeling is that the figure will even out by the end of the year, yet still stay in the positive range.

What do these figures mean? It means that more and more people are paying for music. Where many consumers previously got their music for free either through piracy or via a free streaming tier, an increasing number are turning to streaming subscriptions.

Now with Apple Music finally launched, and with YouTube's Music Key around the corner, we should see additional increases by the end of the year. My prediction - we'll be surprised at how much the industry has grown at this time next year.

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Is Smooth Jazz Dead?

For a while there in 1990s and early 2000s "smooth jazz" was front and center in radio stations in every major city across the country. Many former rock stations switch to the smooth jazz format in an effort to boost ratings, and for a while it worked.

That trend has drastically changed however, and we might have seen the last of the format for a while, at least on radio.

Stations that featured smooth jazz have seen their ratings plummet recently, causing most to bolt to another format to attract more advertisers.

But why? One theory is that smooth jazz stations struggled to attract younger listeners, which is the most desirable demographic for advertisers. Still, there seemed to be plenty of listeners in the almost-as-desirable 25-54 age demo.

Which means that the demise of the radio format may in fact be due to bad data supplied by Nielsen, who's the dominant ratings provider for both radio and television. The idea is that people were still listening, but they weren't being counted due to being in the wrong demographic.

I'm not a proponent or listener of the smooth jazz format, but the lesson here is that if it happens to one format, it can happen to others as well. Having listeners doesn't equal having the right kind of listeners for many advertisers, and by extension the station groups that own the radio stations. No wonder radio content is worst than ever. Thank you very much Madison Avenue.

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Radio Reaches An Unexpected Audience

We've heard the claims over and over that Millennials are so wrapped up in new technology online that they don't have time for anything old like television and especially radio. A new survey by Nielsen finds that mostly untrue, at least when it comes to radio.

In fact, it found that 65 million Millennials (age 18 to 34) listen to radio each week, which is about half the people in the age group. That amounts to around 11 1/2 hours of listening per week, which is still behind Gen X at 14 hours and Baby Boomers at 14.5, but it's still far more than was generally thought.

An even bigger surprise is that country is the #1 format that Millennials listen to, followed by contemporary pop and contemporary hits. They're much more mainstream that previously thought.

In general, radio is doing fine and is in no danger of going the way of other older technologies. 9 out of 10 people age 10 and up still tune in per week in some way, which amounts to 242 million people!

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Radio And Streaming Show Different Song Popularity

Both streaming and digital song sales are up this year (downloads by 4% and streaming 24%), which is a good thing, but some interesting new data shows that there's a big difference between the top songs that radio plays and the most streamed songs.

The reason why this is important is that sales come more as a result of radio play, who's playlist is controlled by consultants and program directors, while streaming is based more on the actual popularity of the song or artist. Here's what the comparison looks like, according to Nielsen and Billboard.

While radio isn't going away by any stretch of the imagination, you have to wonder how its playlists will be affected in the future as streaming increases. With so much of music radio programmed by consultants who are one step removed by the public, perhaps they'll be forced to watch the streaming charts more closely when it comes to choosing songs. Whether they do or not, radio will be changing in future thanks to streaming, you can bet on it.

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Our 2013 Online World According To Nielsen

It's always fun to look inside the Nielsen Interactive numbers to see if you can find the significance. In the charts below you'll find the usage numbers for January 2013. Take a look at the first chart of the top 10 entertainment sites.

Top 10 Entertainment Sites

Rank     Brand                            Unique Audience     Time Per Person (hh:mm:ss)
1          YouTube                           124,073,000               1:57:28
2          iTunes                                 44,965,000               1:11:58
3          Comcast Ent sites                 33,825,000               0:54:42
4          Yahoo! Sports Websites        32,581,000               0:25:02
5          IMDb                                  29,783,000               0:17:49
6          Netflix                                 28,076,000               0:46:31
7          ESPN Digital Network          27,366,000               1:02:05
8          Omg! Websites                     25,298,000               0:08:55
9          VEVO                                  25,204,000               0:07:54
10         FOXSports.com on MSN      24,385,000               0:09:59

Of course, what immediately catches your eye is the fact that YouTube (in red) was watched more than the others. It's significant that iTunes isn't all that far behind. If you factor in the fact that Apple's iRadio streaming network will be implemented sometime during the summer, this chart could look a lot different in 6 months. Also, if you combine all the sports sites (Comcast, Yahoo Sports, ESPN and FoxSports), it shows that sports is bigger entertainment sector than anything else, with nearly 2:30 of viewing.

Top 10 Web Brands by Unique Audience (U.S. Total)

Rank     Brand                          Unique Audience     Time Per Person (hh:mm:ss)
1           Google                                   170,629,000     2:05:30
2           Facebook                                145,297,000     6:41:44
3           Yahoo!                                   135,100,000     2:32:52
4           YouTube                                124,073,000     1:57:28
5           MSN/WindowsLive/Bing         123,133,000     1:15:40
6           Microsoft                                  86,986,000     0:47:26
7           Amazon                                    84,735,000     0:38:14
8           AOL Media Network                 83,826,000     2:09:36
9           Wikipedia                                 76,310,000     0:24:25
10         Ask Network                             69,447,000     0:12:30

No surprise here that Facebook leads the way in stickiness, with nearly 3 times the amount as the next in line. Everyone complains about Facebook, but we still use it a lot.

Average U.S. Internet Usage for January 2013

Metrics                                            Total
Sessions/Visits per Person                   62
Domains Visited per Person                96
Web Page Views per Person            2417
Duration of a Web Page viewed       0:01:12
Online Time per Person                   29:10:34
No. of People Who Went Online      208,703,000
No. of People with Internet access    276,778,307

What's interesting about this chart is the fact that we don't stay too long on most websites that we visit, which makes the Facebook number in the previous chart all the more impressive. Also, with a total US population of 313 million, it's pretty interesting that 208 million of them went online in January, and 276 million of them have Internet access. Yes, it is almost everywhere.

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Nielsen's New Social Media Measurements

No matter how much influence television continues to lose, it's still the top advertising medium and will be for some time to come. That said, more and more people watch television along with a computer or tablet - the so-called "second screen." Now the powerhouse ratings service Nielsen (who recently bought their long-time competitor Arbitron) has acknowledged the fact by announcing that they'll be instituting a new metric called the "Nielsen Twitter TV ratings" that measures the social media activity of a TV show audience.

A while back Nielsen acquired a company called SocialGuide, and it's their technology that will be used to track the Twitter activity for more than 36,000 programs. The trick is that it's even capable to identify tweets that are associated with a specific show, which seems to be no easy task. The company didn't provide many details on how the service would be implemented, but did say that it would begin for the Fall 2013 season.

The second screen is becoming more and more of an issue for all marketing. Google recently did a study where they found that over 90 percent of people who owned multiple devices tended to use them simultaneously, but it's not necessarily only for social media. Plain old Internet search is also a major second screen activity when watching television.

I have to admit that I won't watch TV without an iPad anymore, but most of the time I use it to search for background information on what I'm watching. Regardless of the reason you use your second screen, advertisers see this as a major marketing opening. The problem is how to do it, which no one has figured out yet. In the meantime, enjoy watching both your screens.

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Word Of Mouth Is Still The Best Advertising

It's been said in business classes over and over that word of mouth is the best form of advertising, and some new research from Nielsen backs the premise up yet again. In its most recent "Global Trust In Advertising Survey," the research company determined the following:

• 92% of consumers trust word-of-mouth recommendations from friends and family above all else. This is up 18% from the last survey in 2007.

• Online consumer reviews were the 2nd most trusted form of advertising at 70%, which was an increase of 15% in the last 4 years.

• 47% of people say they trusted television, magazine and newspaper adverts, which were all down approximately 20% from the previous survey. Interestingly enough, the majority of advertising dollars are still spent on these traditional marketing sectors.

• 58% of consumers trusted what's termed as "owned media," which are things like messages on a company's website.

• 50% found content found in emails credible.

• 42% said they trusted radio ads.

• Only 40% found product placement in television shows credible.

• 36% said they trusted online video ads.

• 33% said they trusted mobile video or banner adds while 29% said they trusted mobile text adverts.

What this all boils down to is that word of mouth always has been, and still is the most trusted form of advertising available. And, as I've stated numerous times in my Music 3.0 book, "social media is online word of mouth." Unfortunately Nielsen didn't attempt to measure the effect of social media as a form of advertising, but it's likely they would've found it to be nearly as powerful as verbal word-of-mouth.

The bottom line, when it comes to marketing of just about anything (including music), make social media a priority, since it's an effective yet inexpensive platform for getting the word out that consumers deem credible.

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

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

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Billboard Finally Updates Its Charts

It took some time and is probably about 5 years too late in coming, but Billboard has finally updated its charts to include on-demand streams from services such as Spotify, Rhapsody, Muve, MOG, Slacker and Rdio to determine chart position. It announced it will also introduce a new chart for top on-demand streaming tunes immediately.

What's interesting is that the new charts are a product not only of Billboard, but also of Nielsen Broadcast Data System and the National Association of Recording Merchandisers. That said, the charts will mostly rely on data from Nielsen.

It's little known that Nielsen has been tracking music data streams since 2005, but has largely kept the data to itself. What they did finally release was pretty interesting, like in the first 70 days of the year it had tracked more than 4.5 billion audio streams, 625 million in the last week alone.

Another nugget is that streaming activity rose 17% in the week after Christmas while digital download sales jumped 20%, and that digital single song sales are up 7% this year so far.

A possible flaw in the system is that Nielsen doesn't track Pandora and what their more than 20 million users are listening to, but at least what they've done is a vast improvement of the past way of doing it, which was strictly by sales.

Billboard has been losing it's relevance for quite some time now and desperately needed to step into the future in order to survive. With fewer and fewer music stores and labels around, it's customers and influence is dwindling, and the company has laid off some of it's best people recently as a result.

Will this be too little, too late?

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

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More People Own TVs Than Cellphones

It's been estimated that out of the 7 billion people on this planet, 2 billion of them own cell phones. But in the US, the cell phone still is not as popular as the one common object statistically found in every household - the television.

According to Nielsen, 290 million Americans in 114.7 million households own at least one TV. If you compare that with the 234 million cellphone owners, the 211 million Americans who are online, and the 116 million (ages 13 and up) who surf the mobile web, television is still the medium of choice for most people of all ages.

Want some more stats? Nearly one-third (35.9 million) of TV-owning households have four or more televisions (wow!), and only 17.5 million households have exactly one television.

So what do these figures mean? First of all, cellphones are still a growth market. We keep hearing that mobile is the future, and it surely is for audio, picture and the Internet. There may come a time when most of our consumption may be on handheld devices, but that time is not now. Of course, if the new OLED televisions as thin as wallpaper come down in price, all bets are off.

But more than anything, these statistics tell us that television is still the major media consumption device in our lives, bar none. Sure, it's losing it's power to other devices, but that's because we're becoming a multi-device culture. But don't underestimate the TV's power, because it's still there and will continue flexing its muscles for a long time.

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

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.