The global music industry has been going through a long and well documented transition.
After a long period of decline the industry returned to growth in 2015, with global digital revenues overtaking physical revenues for the first time, according to a study conducted by ticketing platform Eventbrite and Media Insight Consulting.
This transition has seen a decline in both CD sales and digital downloads and strong growth in streaming, with revenue from subscription services growing at 101% in Australia in 2015 and making up 14% of overall sales (up from 7% in 2014).
The Australian market is currently ahead of the global curve, transitioning to a primarily digital market in 2013 and growing 5% in 2015. More people are listening to more music than ever before.
Notably for radio businesses, the study has found that live music events are a growth area. iHeartRadio concerts, Nova’s Red Room, SCA’s Rooftop events all take advantage of this trend.
Within the live music sector, the study reveals sustained growth in attendance of gigs and music festivals.
Between 2008-2014 Australia saw a 42% increase in revenue from live performances and a 17% increase in attendance3. “Looking at the festivals market, we have seen a shift away from the larger mass market festivals, to more boutique offerings that offer a lot more than just a musical experience,” says the report.
The study was conducted in July 2016 and analysed responses from just over 2000 Australians who responded to an online survey. It analyses consumer trends related to the consumption and discovery of live and recorded music in Australia and provide a number of key takeaways for those in the music industry.
When it comes to music, Australians are a passionate bunch – a massive 40% of us say that music is our number one passion. This 40% are the early-adopters and the taste makers for the rest of the population, and from an industry standpoint, they represent the most important customer base to understand and target.
The study identified how these ‘music passionates’ consume music, compared with the rest of the population. It mainly focuses on the music industry, but there are some useful trends which could b e interesting for the radio industry.
A key message for the music industry from the study is: The music industry as a whole needs to get better at converting passion for music into financial transactions. Educating and converting consumers who have until now consumed for free must be the top priority. The report advises:
“Advances in technology mean that we have more data than ever before so identifying this audience has become easier, the key is how this data is used. Simple things like segmenting your mailing list by those fans that have bought in the past, or providing exclusive content to superfans can help realise more revenue… Leveraging superfans is all about monitoring social media, collecting and analysing data on your fanbase and meeting them face to face. Find your tribe and work together.
Useful information for the radio industry is that new generation music consumers want experiences. The study says:
While the study mostly focuses on new music channels such as streaming services, the same lessons are still relevant for radio, which has long been an experiential and product sampling medium.
Regardless of where music is discovered, there are some clear behavioural trends once a discovery is made, reports the study:
“The key to long term revenue generation lies in understanding the consumer journey once someone lands on YouTube or another platform to listen to an artist for the first time. On top of that, collecting data on a new fan and forming a relationship over time must be a priority. Requesting mailing list signup across as many touch-points as possible is critical to ensuring this continued engagement with a fan.”
The challenge for the industry is to ensure that a platform like YouTube is not the full and final destination for core fans, advises the report.
Newer platforms like Snapchat have also grown fast with the majority of their user base in the youngest demographic. Users flit around the service, viewing photos and videos under 10 seconds in length, which makes building a depth of relationship with fans more difficult.
“Short form media in today’s transient world further reduces an artist’s contact time with their fans and this highlights the importance of a) having a personality and b) tailoring content to the service in question (if you only have 10 seconds, don’t waste 8 of them on something that isn’t key to the message you are telling),” advises the report.
Gen Z males are most likely to pay to stream and to attend a live show or festival after discovering a new artist, so they represent biggest revenue opportunity.
Live music discovery is heavily influenced by other people. Word of mouth is the most common way people discover live music events. In the online world, the role of the influencer is critical – 30% of people surveyed state that they discover live music events via a social media post from a friend, versus 22% for social media ads and 17% for outdoor ads… Outside of specific music festivals, there are opportunities for artists at non-music events such as food and beer festivals where live music plays a role.
The full report can be found here.