People Still Not Willing To Pay For Music Subscriptions

Despite all the hype over the entry of Apple Music into the streaming music arena, people are still hesitant to spend money not only on Apple Music, but any streaming service. That’s the conclusion of the latest edition of Nielsen’s annual Music 360 report.

While every day there are new articles regarding the growth of streaming music, it turns out that good old fashioned radio not only refuses to die but is actually growing in importance in regards to consumers discovering new music. Music 360 found that 61% of people say they discover music that way, which is up from 57% in 2014. 

On the other hand, only 27% of consumers said they discovered new music via a music streaming service (and that includes YouTube).

This shows that the much talked about migration to subscription music isn’t the exactly the flood that was expected by now.

One of the major reasons for the slow start is price, an opinion that industry analysts have long held and was born out again in Music 360. According to the study, the top three reasons that consumers gave for not subscribing was that services are too expensive (46%), they can stream music for free elsewhere (42%), and they didn’t think they’d use a service enough to justify the spend (38%).

Although the current $9.99 per month seems like an ideal number in terms of the music industry’s wants and needs, that figure doesn’t seem to correspond to what consumers have in mind.

The general feeling among industry analysts is that $3.99 to $4.99 is a much better ballpark for a monthly price. It’s an easier psychological barrier to breach, and addresses two of the three objections sited in the report. You might feel that your 10 bucks a month is being spent unwisely if you only listen for a few hours during that time period, but it doesn’t hurt nearly as much at half that price. 

The chances of getting just about any music licensing body to sign off on a $4.99 per month price seems to be somewhere between slim and none at the moment though. Even the mighty Apple couldn’t negotiate a reported $7.99 per month price, which signals that it’s going to take some time before a continued low adoption rate causes a re-think of that position. Read more on Forbes.

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Music Tastes Of Americans

Nielsen's Music 360 report is always a good read, and the 2014 version has some great info on the music listening habits, preferences and tastes of Americans. It's a great way to spot the latest trends and get some meaningful insight in how we consume music. Here are some of things we learned.

• Americans really do like music, as 93% listens to it, spending more than 25 hours a week doing so.
• 75% of Americans would rather listen to music than watch television.

Where do we listen to music most?
   - In the car - 23%
   - While working - 16%
   - While doing chores at home - 15%
   - While doing other activities - 13%
   - While exercising - 12%

• Radio is the top music delivery system, with 59% consuming their music that way.
• 48% consume most of their music from their own libraries
• 41% from on-demand streaming services like Spotify and YouTube
• 36% from radio-like streaming like Pandora or iTunes Radio
• A surprising and important stat is that 18% have purchased a song while streaming it.

The phone is really important when it comes to music delivery, although it only comes in their behind radios and computers when it comes to listening devices. That said, 39% of smartphone owners purchased music on their devices, which was up from 34% a year ago.

Americans appetite for music is not diminishing as many fear, but although streaming and smartphones are coming on strong, it's still good old fashioned radio that we still love the most.

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Neilsen Says Music Discovery Still Led By Radio

In a new report by Nielsen called Music 360, most people still discover their music most frequently from radio, but teens listen to music through YouTube more than any other source. Among the other findings is that 36% of teens have bought a CD in the last year, and 51% of teens have purchased a music download.

Here's a sampling of what's found in the report:

Radio is still the dominant way people discover music

• 48% discover music most often through the radio
• 10% discover music most often through friends/relatives
• 7% discover music most often through YouTube

More teens listen to music through YouTube than through any other source

• 64% of teens listen to music through YouTube
• 56% of teens listen to music on the radio
• 53% of teens listen to music through iTunes
• 50% of teens listen to music on CD

Positive recommendations from a friend are most likely to influence purchase decisions

• 54% are more likely to make a purchase based off a positive recommendation from a friend
• 25% are more likely to make a purchase based off a music blog/chat rooms
• 12% are more likely to make a purchase based off an endorsement from a brand
• 8% of all respondents share music on social networking sites, while 6% upload music.

Music player apps are most prevalent, followed by radio and music store apps

• 54% have music player apps on their smartphones
• 47% have radio apps on their smartphones
• 26% have music store apps on their smartphones

Males purchase rock music most often, while females prefer top 40

• 38% of males purchase rock most often
• 15% of females (compared to 9% of males) purchase top 40 most often

Digital music is seen as a slightly better value than a physical CD

• 63% of purchasers identified digital albums as a very or fairly good value
• 61% identified digital tracks as a very or fairly good value
• 55% identified physical CDs as a very or fairly good value

Younger consumers who do buy digital tracks, are more likely to purchase new music immediately after its release

• 33% of teens purchased a digital track within one week of release
• 21% of persons 18+ purchased a digital track within one week of release

18-24 year olds are most likely to attend a music event (among those who attend any type of live event)

• 7% attending once a week or more
• 30% attending once a month

Although 18-24 year olds attend more live events, teens are more likely to purchase T-shirts and posters while there.

• 54% (compared to 46% of 18-24 year olds) of teen attendees purchase concert tees
• 14% (compared to 7% of 18-24 year olds) of teen attendees purchase concert posters

Even though Nielsen has done great research for years, there are some things that I have to question in Music 360. For instance, it's hard to believe that most people still discover music through the radio and not from YouTube, which is the predominant way that most people under 30 listen to music. Other things, like the type of music purchased and when, haven't seemed to change for years.

What the report does illustrate is that we often don't really know what we think we know. If you listen to the media, the music world has turned completely upside down. After looking at this report, it's not as different as we're led to believe.

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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.

Radio Still Tops In Music Discovery

Yesterday I looked at the portion of Nielsen's latest Music 360 survey that pertains to CDs. Today we'll look at some of the other sections.

The one that intrigued me almost as much as teens listening to CDs is how much people still use normal terrestrial radio. According to Nielsen:

• 48% discover music most often through radio
• 10% discover music most often through friends or relatives
• 7% discover music most often through YouTube

Radio is supposed to be dying, but you wouldn't know that looking at the info outlined here. If we go even further into the data and look at teens:

• 64% of teens listen to music through YouTube
• 56% of teens listen to music through radio
• 53% of teens listen to music through iTunes
• 50% of teens listen to music through CD

There's that radio thingy again. Conventional wisdom says it's not supposed to be that high, especially with teens, but apparently it's not dead yet. But there's more:

• 54% have music player apps on their smartphones
• 47% have radio apps on their smartphones
• 26% have music store apps on their smartphones

What I'm surprised about here is that the numbers are so low. I would've expected entertainment apps to be closer to 100%.

There's some other fascinating info that can be gleaned from the survey.

• 38% of males purchase rock most often (no surprise here)
• 15% of females (compared to 9% of males) purchase top 40 most often (much lower than I thought)

• 33% of teens purchased a digital track within a week of release (lower than it once was)
• 21% of persons 18+ purchased a digital track within a week of release

• 7% of 18 to 24 year olds attend a music event once a week (that's a lot lower than it used to be)
• 30% of 18 to 24 year olds attend a music event once a month

What's most interesting in all this data is that people's listening and purchasing habits have changed in some ways and not much in others. CDs and radio are still in widespread use, but the overall enthusiasm for consuming music seems to be down. What this shows is that uur Music 3.0 world continues to be full of surprises.

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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.

CDs Still Important States New Study

Nielsen Research just came out with its yearly Nielsen Music 360 study, and like every year, it provides an interesting overview of the music world we live in. That said, it also provides a different look at reality of the music world we live in than we're led to believe.

You're going to see different parts of the study cited in the news in coming days, but I bet that most will overlook something that screamed out to me - CDs are much more relevant than most of the world thinks.

Let me say up front that I don't use optical discs of any kind and haven't for at least a year, so I have no love for the shiny pieces of plastic, but the fact of the matter is that there are a lot of people out there that still use them regularly, according to Nielsen. Here's an example from the study:

• 50% of teens still listen to music on CD.

Now it's also true that 64% of teens listen to music on YouTube, 56% on radio, and 53% on iTunes, but who would've thought that the number for CDs would be so high? If you listen to the media, you'd think that any kid that still listens to CDs is stuck in the back woods of Appalachia. still has a black and white television and only gets power for 4 hours a day. But the problem is that the media sometimes confuses the kids of Silicon Valley with the kids everywhere else, and let's face it, there's just no comparison.

Want some other figures that may blow your mind?

• 36% of teens purchased a CD last year. 

Now it's also true that 51% purchased some sort of download, but once again, most media savvy people wouldn't in a thousand years expect the CD purchase figure to be that high.

How about this one:

• 55% identified physical CDs as a very or fairly good value.

Once again, this was beaten by digital albums (63%) and digital singles (61%), but who would've thought that the CD would be anywhere near those on the chart?

This all goes to show that while the CD may a medium in a death spiral, it's a not buried just yet. It's much more viable as a distribution medium than we're all led to believe.

Tomorrow I'll provide some other interesting info from the same survey.

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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.