Nielsen has unveiled the findings from “The Buyer and the Beats: The Music Fan and How to Reach Them,” an unprecedented music study created especially for the 2013 SXSW conference attendees that provides beneficial insights about music fans, defined as those who are passionately invested in music. Co-presented by Nielsen and SXSW during this year’s conference in Austin, the report explores how music listeners engage with music and technology, utilize their smartphones, tap into free content, and engage in crowdsourcing; as well as how companies, artists and fans can be better served.
“The Buyer and the Beats: The Music Fan and How to Reach Them” reveals that 40% of U.S. consumers – those classified as “Fans” – are responsible for 75% of music spending. These Fans, who spend between $20 billion and $26 billion on music each year, could spend between $450 million and $2.6 billion more on music if compelling content is made commercially available. Additionally, the study finds that that the most avid of “Fans” have downloaded the most tracks for free–approximately 30 digital songs per fan over the course of a year.
“It’s encouraging to see such strong demand for content from music fans,” says David Bakula, SVP Client Development & Analytics for Entertainment, Nielsen. “We are finding that there’s a lot of untapped demand for additional content, which can translate into beneficial and profitable opportunities for artists, labels, and advertisers.”
A majority of “Fans” want greater engagement with their favorite musicians and would be willing to pay considerably for that access. They want to know more about what they’re like as people, and get a better understanding of the creative process. These “Fans” are prepared to pay more for exclusive or premium content, autographed products, and special merchandise. In addition, these fans would consider paying about $30 for an “online ticket” to view an exclusive live webcast.
Nielsen identifies the difference between a casual music consumer and a music “Fan,” and the best way to reach them. The core music fans include “Aficionado Fans,” “Digital Fans,” and “Big Box Fans.” Fans who don’t meet the criteria to be classified as one of Nielsen’s core music fans are the “Occasional Concert Consumers,” “Ambivalent Music Consumers,” and “Background Music Consumers.”
- Aficionado Fans (14% of respondents) – the most avid and engaged music fans are spending about $400 per year on music, concerts and artist merchandise through retailers such as iTunes, Amazon and independent record stores. These fans prefer alternative rock, are active social network users, attend live concerts and listen to music via computer.
- Digital Fans (13%) – the smartphone is the entertainment hub for these fans, who discover music via technology and listen to music via Facebook. They spend over $300 per year on music and share music more than other fans, giving music as gifts and sharing their playlists.
- Big Box Fans (13%) – these fans shop at mass retailers, are partial to pop and country music, and listen to music through a CD or mp3 player. They are highly influenced by bargains, respond well to brand endorsements, and spend about $200 per year on music.
- Occasional Concert Consumers (14%) and Ambivalent Music Consumers (22%) are less engaged with music than the “Fans,” and they spend less (about $100 and $70 per year, respectively). Nonetheless, the Ambivalent Music Consumer is open to discovery (60% use Pandora) and expressed some willingness to pay for exclusive content.
- Background Music Consumers (24%) are the least engaged of all music consumers, spending only $40 per year on music.
“The Buyer and the Beats: The Music Fan and How to Reach Them” presenters included Barbara Zack, Chief Analytics Officer, Entertainment Measurement for Nielsen; David Bakula, SVP Analytics for Nielsen; Benji Rogers, Founder & CEO of PledgeMusic; and Shawn O’Keefe, Interactive Festival Producer, SXSW. During the panel, Bakula projected On-Demand streaming to exceed 100 billion by the year’s end.
Data for “The Buyer and the Beats: The Music Fan and How to Reach Them” was collected via 1,000 consumer surveys using Nielsen’s proprietary, high-quality ePanel in the United States; 1,800 PledgeMusic contributors; and 1,200 SXSW attendees.