Emusic ai mstudy

ADAM KLEIN, EMUSIC CEO & PRESIDENT, WITH JAMES FARRELLY, AIM HOST

FEBRUARY 2012 • 1

eMusic Research Webinar Consumer Motivations: Moving from Physical to Digital

PRESENTED BY


FEBRUARY 2012 • 2

Presenters

ADAM KLEIN

eMusic President & CEO

JAMES FARRELLY

AIM Host


FEBRUARY 2012 • 3

What We’ll Cover Today

• Physical vs. Digital

• Digital Music Consumers

• Streaming vs. Owning

• UK and US Comparisons

• Future Predictions and Market Movers


FEBRUARY 2012 • 4

Physical vs. Digital:

How are music fans consuming music today?


FEBRUARY 2012 • 5

80% Buy Physical

UK Consumers are physically oriented…

70% Download 46% Stream

NOTE: The statistics referenced in this study are from a research study conducted with Insight Strategy Group in December 2011. The Universe was a UK nationwide sample of 1400 digital music purchasers, ages 18-64.


FEBRUARY 2012 • 6

70% play

CDs, records on

my stereo

…and primarily listen to hard copies from their

home stereo system

52% on my

computer 48% on my

mp3 player

23% on my

smart phone

6% on my

tablet


FEBRUARY 2012 • 7

Music Festivals Drive Ownership

After purchasing hard copy in retail stores or online—

live music events are one of the top three ways to

purchase for all consumer groups.

.

NOTE: Omnivores are the only exception.

For this groups, artists websites are part of the top three purchasing sites


FEBRUARY 2012 • 8

Digital Music Consumers


FEBRUARY 2012 • 9

Digital Music Consumer Segments

MORE INVOLVED

LESS INVOLVED

MAINSTREAM OFFBEAT

Highly Involved, More Mainstream

Highly Involved, More Niche

Less Involved, More Niche

Less Involved, More Mainstream

Active in seeking out mainstream

music, pop culture experts

Active in seeking out more offbeat

music, embrace the independent with

an aversion to the mainstream

Loosely engaged with music but lean

towards the popular when interested Introverted, less active and less

engaged consumers with offbeat tastes


FEBRUARY 2012 • 10

MORE INVOLVED

LESS INVOLVED

MAINSTREAM OFFBEAT

Five Segments that We’ll Reference Today

Cultural

Independents

Independent

Followers

Omnivores Mainstream

Leaders

Mainstream

Followers



Streaming vs. Ownership



Why is ownership preferred over streaming?

• 87% will not give up owning music for streaming

• 93% feel that owning music gives them security

• 68% feel that streaming from a subscription service

means that they don’t have control (78% Cultural Independents)



Streaming Adoption is tied to Websites,

Not Mobile

How are consumers streaming music that they don’t own?

• 31% on their computer

• 17% on their mobile device



Streaming is often a catalyst to ownership

64% use streaming to discover new

music before deciding to buy it.

Streaming plays a key part in the

new music discovery process.

70% will stream for free, but will

not pay to stream music.



UK & US Comparisons



UK Consumers are more physically-oriented…

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

Stream

Download Music

Buy Physical

UK

US

80%

70%

46%

51%

71%

52%

NOTE: Respondents were asked to please select the statement(s) that best describe them.



Across all formats, US consumers are more

likely to stream

0% 20% 40% 60%

Streaming owned music via a cloud on my

mobile

Streaming owned music via a cloud on my

computer

Streaming music I don't own on my mobile

Streaming music I don't own on my computer

UK

US

Both US and UK

consumers are

more likely to

stream music

that they don’t

own!

31%

17%

17%

14%

53%

35%

20%

17%

NOTE: Respondents were asked to please select the statement(s) that best describe them.



Future Predictions:

What will cause the shift from physical to digital?



4 Key Drivers of Change

VALUE + CONVENIENCE

Exceptional value that is part of

an enhanced, full experience

Easy access to personalized

recommendations + rich listening

experiences

ARTIST SUPPORT + COMMUNITY

Create a experience where consumers

can feel closer to and support the artist

Evoke the real-world feeling of artist

interaction and backstage access

UK Cultural

Independents

enjoy the social

currency that

music provides



Tap Into The UK Festival Culture

Create a virtual way to replicate

the physical social experience and bring

fans closer to the artists they love

.



Market Movers:

What opportunities exist for digital services?



Ownership

Ownership is still the key market driver.

Cultural Independents are more oriented towards owning than streaming—

they truly value the experience of owning music.

.



Targeting

Knowing your target and super-serving your audience is how today’s digital

music services will get ahead.

Digital music marketing today is direct-to-fan.



Questions?



FOR MORE INFORMATION, CONTACT:

Adam Klein, eMusic CEO & President

[email protected] | www.emusic.com

Thank you

Entertainment & Humor

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