optimising the online music mix - midem-exclusive nielsen white paper

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The online music mix: with an array of services and music consumption methods available to the consumer, optimising the online mix is a key proposition. In this paper, focusing on online user behaviour (excluding mobile phone usage), Nielsen will consider: the active reach of audio and video streaming services and other music sites and applications; the audience overlap between different online music services; and demographic segmentation. This paper builds on the last two papers for MIDEM, in which Nielsen explored music audio and music video streaming services across Europe (UK, France, Spain, Italy and Germany). In these we identified that audio streaming is more popular among the younger users – 18-24 year old and teenagers. Female users are becoming more interested in audio streaming services, a fact that holds most true for UK users. We also discovered that when it comes to music video streaming services, teenagers (aged 13 – 17) and young adults were the most avid users of video streaming websites. Via our research, Nielsen revealed that the higher the engagement with a video through viewing and commenting/liking/favouriting) the higher the sales; although there were a few notable exceptions. In this paper we find that the online music landscape varies widely across the countries in our survey. On the charts over the next couple of pages, we have grouped together key music sites and other large online players to provide context. The top group of sites is the social media group which includes Facebook, MySpace and Twitter in all countries with a couple of local additions in Germany. Full detail on sites included can be found in the appendix.

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Page 1: Optimising the online music mix - midem-exclusive Nielsen white paper

Optimising the online

music mix Jean Littolff, Managing Director

Helena Kosinski, Marketing Manager

Nielsen Music

November 2011

Page 2: Optimising the online music mix - midem-exclusive Nielsen white paper

Table of Contents

1. Introduction

2. Methodology

3. Key Takeaways

Country Round Up

4. The UK

5. France

6. Germany

7. Spain

8. Italy

9. Audience Composition

10. Audience Overlap Analysis

11. Conclusion

Page 3: Optimising the online music mix - midem-exclusive Nielsen white paper

The online music mix: with an array of services and music consumption methods available to the consumer,

optimising the online mix is a key proposition. In this paper, focusing on online user behaviour (excluding

mobile phone usage), Nielsen will consider: the active reach of audio and video streaming services and

other music sites and applications; the audience overlap between different online music services; and

demographic segmentation.

This paper builds on the last two papers for MIDEM, in which Nielsen explored music audio and music

video streaming services across Europe (UK, France, Spain, Italy and Germany). In these we identified that

audio streaming is more popular among the younger users – 18-24 year old and teenagers. Female users

are becoming more interested in audio streaming services, a fact that holds most true for UK users. We also

discovered that when it comes to music video streaming services, teenagers (aged 13 – 17) and young

adults were the most avid users of video streaming websites. Via our research, Nielsen revealed that the

higher the engagement with a video through viewing and commenting/liking/favouriting) the higher the

sales; although there were a few notable exceptions.

In this paper we find that the online music landscape varies widely across the countries in our survey. On

the charts over the next couple of pages, we have grouped together key music sites and other large online

players to provide context. The top group of sites is the social media group which includes Facebook,

MySpace and Twitter in all countries with a couple of local additions in Germany. Full detail on sites

included can be found in the appendix.

1. Introduction

Page 4: Optimising the online music mix - midem-exclusive Nielsen white paper

Our data source is proprietary metered panels of computer internet users, both at home and at work,across five countries.

Users in five countries – the UK, Germany, France, Italy, and Spain – are analysed.

Nielsen grouped websites together according to their main purpose: we have eight groups – socialmedia, music sales, music audio streaming, music video streaming, lyrics and music notation websites,music news websites, live music, and illegal download.

• The social media group includes websites such as Facebook and Twitter.

• Music sales refers to websites on which users can purchase digital music tracks. This group howeveralso includes applications which can be used for listening to music.

• Music audio streaming refers to websites and applications that allow users to listen to personalizedradio stations or music on demand, e.g. Last.fm, Spotify, Deezer.

• The music video streaming group is composed of websites that host official music videos; it does nottake into account fan-uploaded music videos.

• The lyrics and music notation group refers to websites that post song lyrics, lyrics translations, guitartabs and sheet music.

• The music news group is made up of websites that provide daily music artist news and information onnew album/single/video releases.

• The live music group consists of websites that sell tickets or provide information about upcomingmusic concerts or festivals.

• The illegal download group is made up of torrent websites and applications, free illegal mp3 downloadwebsites and peer-to-peer websites and applications.

A list of the websites included in each category is provided in the appendix.

Nielsen CapabilitiesNielsen provide online metrics to clients across the globe. Data available includes individual site, serviceand application breakdown data. Nielsen provide website metrics including active reach, coverage, timespent, sessions and page views. By further combining this data with demographic breakdown includingage, gender, household income, education and occupation, Nielsen provide our clients withcomprehensive and trusted insights into online behaviours.

2. Nielsen Methodology

Page 5: Optimising the online music mix - midem-exclusive Nielsen white paper

- Social Media is widespread, reaching in most analysed countries more than 60% of the audience. It is

an anchor of online users’ behaviours.

- Online video streaming being accessed by, either close to, or higher than, 1 out of 2 internet users. It

is a critical stream to provoke revenue generation and simultaneously to promote music content. Pure

music video streaming within this category is showing a very decent reach of the internet population.

- Music sales sites and apps (including apps which can be used to listen to music) and music audio

streaming usage do reflect strongly what is locally on offer, and habits of music consumption. France is

high on both sales and audio streaming, Germany and the UK more skewed toward sales, Italy and

Spain still struggling against sites where illegal downloads are available.

- The overlap between the different sites (metrics of audience which visited multiple music related sites:

music sales, music audio streaming sites and music video streaming sites) shows an ecosystem which

has grown out of its infancy. In some countries, like France, users jump equally from sales sites to video

streaming or audio streaming sites. Users move from video to audio streaming sites in greater numbers

than those progressing the other way. These interchanges promote the multi channel strategy of

promotion and also encourage methods of revenue generation from this bundle of channels.

3. Key Takeaways

Page 6: Optimising the online music mix - midem-exclusive Nielsen white paper

4. The UK

• Of all the countries in Nielsen’s sample, UK has the highest active reach for music sales

websites. Active reach is the percentage of all active unique internet users who visited a website

or used an application. Note: the music sales category includes applications which can be used

for listening to music.

• A variety of music audio streaming services operate in the UK. The most current data from

September 2011 shows that such websites and applications reach around 5% of the online

population in the UK.

• In August and September 2011, 35-49 year old men were the most frequent visitors to audio

streaming websites and applications in the UK, visiting on average 2 times per week. They were

also the ones who spent the most time on audio streaming platforms.

• Music video streaming websites reached almost 15% of the British Internet users in September

2011. The most frequent visitors of music video streaming websites were 18-24 year old men,

with 1-2 visits per week. In comparison, users in the other demographic groups visited such

websites between 2 and 4 times a month.

Active Reach - UK - September 2011

0% 10% 20% 30% 40% 50% 60% 70%

Socia l Media

YouTube

Music Sa les

Music Video Streaming

Il legal Download

Lyrics & Notation

Music Audio Streaming

Music News

Live Mus ic Source: UKOM/ Nielsen

A list of the websites included in each category is provided in the appendix.

Page 7: Optimising the online music mix - midem-exclusive Nielsen white paper

5. France

• Music audio streaming services have succeeded in creating a larger user base in France (the

active reach of audio streaming services was 13.5% in September 2011). The most frequent

visitors to audio streaming websites in August and September 2011 were 25-34 year old men (1 - 2

visits per week).

• Music video streaming websites have also been able to attract substantial number of users (16.5%

active reach in September 2011). In August and September 2011, French women visited more

frequently and spent more time on music video streaming websites than men. However, this

difference is rather small.

Active Reach - France - September 2011

0% 10% 20% 30% 40% 50% 60% 70%

Socia l Media

YouTube

Music Video Streaming

Music Sa les

Music Audio Streaming

Il legal Download

Music News

Lyrics & Notation

Live Mus ic

Source: Nielsen

Page 8: Optimising the online music mix - midem-exclusive Nielsen white paper

6. Germany

• Of all music-related websites, music sales websites have the highest online penetration in

Germany (12.5% active reach in September 2011). Note: the music sales category includes

applications which can be used for listening to music.

• Whilst there are a number of music audio streaming services available in Germany, they have yet

to attract a large proportion of the online population.

• Music video streaming websites are growing in active reach. However, YouTube is not licensed

by GEMA for music content. The average German user visited a music video streaming website

2-3 times a month. There is almost no difference between the different demographic groups

regarding frequency of visits.

• 25-34 year old women were the most frequent visitors to lyrics websites in September 2011, with

5 visits per month. The average user visited 2-3 times a month.

Active Reach - Germany - September 2011

0% 10% 20% 30% 40% 50% 60% 70%

Socia l Media

YouTube

Music Sa les

Il legal Download

Music Video Streaming

Lyrics & Notation

Music Audio Streaming

Music News Source: Nielsen

Page 9: Optimising the online music mix - midem-exclusive Nielsen white paper

7. Spain

• Music sales websites have a lower active reach than music audio and video streaming in Spain.

Note: the music sales category includes applications which can be used for listening to music.

• Music audio streaming services have managed to attract a significant number of the Spanish online

users (11% active reach in September 2011). In September 2011, the 18-34 year old men were the

most frequent visitors to audio streaming websites and applications. They were also the ones who

spent the most time on audio streaming services, followed closely by 35-49 year old men.

• Music video streaming is also prominent (19% active reach). The most frequent visitors to music

video streaming websites in September 2011 were the 18-24 year olds.

Source: Nielsen

Active Reach - Spain - September 2011

0% 10% 20% 30% 40% 50% 60% 70% 80%

Social Media

YouTube

Illegal Download

Music Video Streaming

Music Audio Streaming

Music Sales

Lyrics & Notation

Music News

Live Music

Page 10: Optimising the online music mix - midem-exclusive Nielsen white paper

8. Italy

• A small number of music audio streaming services are available in Italy.

• Of all music-related websites, music video streaming websites have attained the highest active

reach – 17% in September 2011. In September 2011, the most frequent visitors to music video

streaming websites were the 13-17 year olds, who accessed a video streaming platform once a

week.

• Lyrics and notation websites are more popular in Italy than in the other European countries in

the sample (active reach of 9.7% in September). The average Italian user visited a lyrics

website 2-3 times a month in September 2011.

Active Reach - Italy - September 2011

0% 10% 20% 30% 40% 50% 60% 70% 80%

Socia l Media

YouTube

Music Video Streaming

Il legal Download

Music Sa les

Lyrics & Notation

Music News

Music Audio Streaming

Live Mus ic

Source: Nielsen

Page 11: Optimising the online music mix - midem-exclusive Nielsen white paper

Audience Composition - France - Video Streaming

9.0%

15.9%

30.7%

30.8%

35.2%

32.3%

25.2%

21.0%

0% 20% 40% 60% 80% 100%

Sep - 2010

Sep - 20112 --17

18-34

35-49

50+

The reach of services is one key metric, butas important is knowing who the mainconsumers of a particular music service areand how the audience composition of suchservices changes over time. The graphshere provide examples of the shifts thatoccur in the demographic composition ofmusic websites’ visitors. The 18-24 year oldusers in Spain represented a smallerproportion of the audience of audiostreaming services in September 2011compared to 2010, whereas the 35+ yearolds have grown as a percentage of the totalvisitors. In France, children and teenagersmade up a larger part of the music videostreaming websites’ audience in September2011 compared to September 2010, with theproportion of 35+ year olds declining.

9. Audience Composition

Audience Composition - Spain - Audio Streaming

8.2%

9.2%

53.3%

46.3%

26.2%

31.3%

12.2%

13.2%

0% 20% 40% 60% 80% 100%

Sep - 2010

Sep - 20112 --17

18-34

35-49

50+

Source: Nielsen

Page 12: Optimising the online music mix - midem-exclusive Nielsen white paper

Thus far in this paper, Nielsen has investigated the relative importance of each type of music-related

website and application to the online consumer. However, the various online music platforms do not

exist in isolation, but rather form an ecosystem of music services. As users are exploring the wide array

of options to access music content online, there is an overlap between the users of different online

music services.

With the hyper-fragmentation of the music industry, the music consumer can choose to access/purchase

content in many different ways and not just choosing one method. To substantiate this point, Nielsen

has conducted an audience overlap analysis which shows what proportion of the visitors to a particular

website also visited another website.

For example, in September 2011 50% of the French users who visited any music audio streaming

website also went to a music video streaming service and 30% of those who visited an audio streaming

service visited a music sales website. The figure below illustrates the virtuous circle that exists between

these different types of online music platforms.

France – September 2011

10. Audience Overlap

Music Sales Sites

Music Audio Streaming Services

Music Video Streaming Services

30%

27%

31%

28%

50%

41%Source: Nielsen

Page 13: Optimising the online music mix - midem-exclusive Nielsen white paper

11. Conclusion

A variety of music services are available to music consumers, allowing them to rely on more than one

way to access/purchase music. Having looked into these various ways of music consumption, it is

important to address the question of whether a virtuous circle exists within this complex ecosystem. The

challenge for the music industry is to maximise the interconnection between the different music sources

in order to generate more revenue from consumer usage and to capture maximum user attention, as

users are trying to navigate their way through the plethora of services on offer.

Comparing music related websites in each of these countries outlines the nuances of the local business.

For example, both music video and music audio streaming services are strong in France, while music

sales sites remain strong in the UK and Germany (markets ranked 3rd and 4th in the world sales ranking

by the IFPI in 2010). In Spain, where there is a well documented piracy problem, music sales sites have

lower reach, but streaming services have become popular.

Considering audience overlap, whilst there are notable overlaps between the different online music

services, a keystone service that links all the other online music platforms, has not emerged. Big names

in online search and social media are seeking to integrate with variety of online music services, and

tracking developments in that direction will be interesting to watch.

In summary, online music services - digital download sales, audio streaming and video streaming - are

all interconnected. They all benefit from the rest of the music industry ecosystem (notably from radio,

TV, and concerts) and contribute to it (for example, to live concerts).

Increasing marketing impact and maximising the revenue from any source will require continuing to

rebuild a quite straightforward model in a world which is not simple anymore.

Page 14: Optimising the online music mix - midem-exclusive Nielsen white paper

Appendix

Category UK

Social Media Facebook, Twitter, Myspace

Music Video Streaming VEVO, Dailymotion Music, Orange Music, SFR Music, Free Music, Paroles de Clip, MTV Networks Music, Ournia,

Stars Music

Music Audio Streaming Spotify, Deezer, Last.fm, Radionomy, Goom Radiom, Jukebo, MusicMe, Jiwa, Fun Radio, AlloMusic, Musique Radio

Music News Websites such as Great Song, Premiere Musique, Lesinrocks, Pure Charts

Music Sales iTunes, 7 Digital, eMusic, CD Universe, Beezik, Starzik, Fnac Download, Qobuz

Lyrics & Notation Websites such as AZLyrics, LyricsMode, Lyrics007.com, Sing365.com, Ultimate-Guitar.com

Illegal Download Websites such as The Pirate Bay, BitTorrent, Torrentz, BeeMp3, TorrentReactor, Mp3Skull

Live Music & Gigs Live Nation Network, Songkick, Stereoboard.com, GigWise.com, Virtual Festivals, Music Glue, BandsInTown

France

Social Media Facebook, Twitter, Myspace

Music Video Streaming VEVO, Muzu TV, Dailymotion Music, MSN Music, MTV Networks Music

Music Audio Streaming Spotify, we7, Last.fm, Napster, Jango.com, Mixcloud, ReverbNation

Music News Websites such as BBC Music, RollingStone, Billboard, Drowned in Sound, allmusic

Music Sales iTunes, 7 Digital, eMusic, CD Universe, CD WOW !, Amazon Mp3 Downloader, Beatport

Lyrics & Notation Websites such as AZLyrics, LyricsMode, Lyrics007.com, Sing365.com, Ultimate-Guitar.com

Illegal Download Websites such as The Pirate Bay, BitTorrent, Torrentz, BeeMp3, TorrentReactor, Mp3Skull

Live Music & Gigs Concerts.fr, infoconcert.fr, ConcertAndCo, Concertlive.fr

Germany

Social Media Facebook, Twitter, Myspace, meinVZ, studiVZ, schülerVZ

Music Video Streaming Yavido, Dailymotion Music, tape.tv, MTV.com

Page 15: Optimising the online music mix - midem-exclusive Nielsen white paper

Music Audio Streaming Simfy, Last.fm, Napster, Jango.com, musicstar

Music News e.g. Web.de Musik, GMX Musik, Laut.de, Hiphop.de

Music Sales iTunes, 7 Digital, eMusic, CD Universe, Amazon Mp3 Downloader, tonspion, T-Online Musicload

Lyrics & Notation Websites such as AZLyrics, LyricsMode, Lyrics007.com, Sing365.com, Ultimate-Guitar.com

Illegal Download Websites such as The Pirate Bay, BitTorrent, Torrentz, BeeMp3, TorrentReactor, Mp3Skull

Spain

Social Media Facebook, Twitter, Myspace

Music Video Streaming VEVO, Muzu TV, Dailymotion Music

Music Audio Streaming Spotify, Last.fm, Rockola.fm, Los40.com, Vagos.fm, Yes.fm

Music News e.g GoEar, Cadenadial.com, HHGroups,Jenesaispop

Music Sales iTunes, 7 Digital, eMusic, CD Universe,

Lyrics & Notation Websites such as AZLyrics, LyricsMode, Lyrics007.com, Sing365.com, Ultimate-Guitar.com

Illegal Download Websites such as The Pirate Bay, BitTorrent, Torrentz, BeeMp3, TorrentReactor, Mp3Skull

Live Music & Gigs Nvivo.es, Conciertos 10, Ticketsfera

Italy

Social Media Facebook, Twitter, Myspace

Music Video Streaming VEVO, Muzu TV, Dailymotion Music, Virgilio Musica, Musictory

Music Audio Streaming Last.fm, Jango.com, DADA, Radionomy, Cubomusica, ReverbNation

Music News Websites such as rockol.it, musicsite.it, italianissima.net, Sonorika.com, ondarock.it

Music Sales iTunes, 7 Digital, eMusic, CD Universe

Lyrics & Notation Websites such as AZLyrics, LyricsMode, Lyrics007.com, Sing365.com, Ultimate-Guitar.com

Illegal Download Websites such as The Pirate Bay, BitTorrent, Torrentz, BeeMp3, TorrentReactor, Mp3Skull

Live Music & Gigs Live Nation Network, Concertionline, 5gig.it

Page 16: Optimising the online music mix - midem-exclusive Nielsen white paper

Nielsen Music is the measurement reference of the music industry, and the market data and research partner of choicefor the music sector. Our local and international teams of research and music experts bring the best set ofcomprehensive, robust and quality insights to our music clients.

With Nielsen Music, access, understand and interrogate:

• What music is played on radio and music television (airplay monitoring); we are the only respected and official brand for charts and provide detailed analysis with both local and international coverage.• What is sold (sales tracking); tracking of digital sales globally and physical sales in selected countries.

• What is said and by whom; measurement of internet behaviour and consumer generated media (buzz).• What is advertised and where; complete advertising information.• Who your customers are: significant global consumer and ad-hoc research capabilities.

Nielsen Music is successfully working with more than 500 clients representing all elements of the music chain: recordcompanies/music labels (majors and independents), radio and TV stations, music publishers, performing rightsorganisations, artists and their management, digital media and services, mobile phone companies, retailers, the videogame/gaming industry, consultancy firms, and the media. Nielsen Music (www.nielsen-music.com) is a division of Nielsen(www.nielsen.com), the leading global market research company.

Contact details:

Jean Littolff – Managing Director, Nielsen Music International ([email protected])

Helena Kosinski – International Marketing Manager, Nielsen Music International ([email protected])

About the author

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