The IFPI shares annual Consumer Insight reports. The Music Consumer Insight Report 2016 shares some information that I think will be useful in understanding and forecasting changes in music consumerism. The report is based on research that was conducted with internet users predominantly aged 16-64 in 13 of the world’s leading music markets. The territories (United States, Canada, Great Britain, France, Germany, Spain, Italy, Sweden, Australia, Japan, South Korea, Brazil, and Mexico) account for 84% of the global recorded music market. These reports are conducted to establish patterns of growth and key trends.
According to the report, 71% of internet users in the age range access licensed music. Paid audio streaming services have grown in popularity specifically amongst those under 25 with a third of those aged 16-24 now paying for an audio streaming service. The flipside is that 82% of YouTube’s visitors use the site for music. This is mostly done for music they already know versus to discover new content. It is important to note that 69% of YouTube Users ages 16-24 due use the service to listen to new music versus 58% of users older but on an overall basis 82% listen to music they already know. YouTube is free and that is why 49% say they use it for video streaming but 27% do so to sample before buying. There is still a win because of the number of ads that are played on the service. Lots of business there.
One very useful factor is the increase in smartphone usage. Currently, smartphone usage for streaming is at 55%, a 105 increase from 2015. This can change a lot of things in terms of marketing for not only streaming services but artists and labels. Should artists and labels be focused more on mobile advertising? Should streaming services ensure premium mobile optimization? I’d say yes to both.
Paid streaming saw a 20% increase on 2015 however while a significant amount of 16-24-year-olds are willing to pay for music the trend in still on the rise. It appears that paid streaming has been quite the fix for the music industry. When music first went digital, there were a lot of piracy issues and the industry was lost at how to fix the issue. Artists and labels alike were losing money. Streaming has been seeing an increase every year in most territories. Users claim that audio streaming (when paid) has a good value for the money, there are no ads, it updates libraries across devices and you are still able to listen offline. Unpaid streaming gives you continuous playlists.
Copyright infringement is still a major problem. Over one-third of all internet users access infringing music. Now, stream ripping is taking over other forms of downloading. Search engines are still directing large numbers of users to unlicensed music sites. A quarter (23%) of internet users use Google to get “free” music, of which two-thirds (66%) explicitly search for pirated content. Users are not only able to rip on the computer but on mobile devices as well. Thirty percent of internet users have stream ripped music in the past six months, 27% of which were on a computer and 19% on mobile. In 2015, this figure for internet users stream ripping was at 27% the increase is due to a rise in the 16-24 age group.
While there are some downsides to the data presented, the younger generation shows positive signs for music engagement in the future. They have grown up in a world where licensed music is widely available and on demand. This may be the reason that 82% are willing to pay for music. The popularity of streaming services, their ease of use and extensive libraries, means there could and should be a continued growth in music consumption and engagement period. Between YouTube and Streaming services, the best things these providers can do is optimize.
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