Just How Valuable Are Heavy Social-Media Users?
-- Are heavy social-media users more valuable than other consumers? People may guess that social media activity translates into activity in other areas. And they can point to a recent Pew Internet study that found social media users have closer relationships, get more social support than other people and are more politically engaged than most people.
But a survey by Resonate Networks has found that heavy social media users (defined as people who spend 26% of their online time on social media) are less active in the real world than other social media users. They are less likely to have signed a petition, attended a public meeting, communicated with a government official about an issue, contributed to a political party or candidate, contributed to a charity and voted in a presidential election or primary.
Furthermore, Resonate found that heavy social users are not the most valuable online group. In terms of online purchases made and the dollar value of those online purchases, the heavy usage group (44% have made online purchases, $126 per buyer) falls well short of medium users (53% and $212) and light users (59% and $297). Light users spend just 0.4% of their online time with social media. Medium users invest 4.1% of their online time with social media.
So what does it all mean? Nick Tabbal, Senior VP for Research at Resonate Networks, explains heavy social media users may not justify all the resources and marketing dollars spent on them:
"Not only are Heavy Social Media users less likely to purchase online, they spend a lot less money when they do. Again the consistent theme heavy social use doesn't translate to desired behaviors. Does this mean that heavy social users aren't valuable to brand advertisers? It depends on the brand and the budget. But are results do suggest that the rush to social should be tempered with more than a little caution."
Resonate leaves out one possible factor for the disparity: part of the difference in the three usage groups' spending could be explained by their age. Most every survey and study about social media has showed that younger consumers with relatively little purchasing power spend the most time on social media. Intuitively, it makes sense - higher earners have less time to spend online than lower earners.
And, of course, artists, labels and managers shouldn't necessarily expect immediate and direct results from social media activities. The point of these platforms is to engage fans and create a conversation, and more engaged fans are better than fewer engaged fans. But Resonates' research does remind us two things: in social media quality outweighs quantity and a return on investment might be hard to calculate. ( Forbes.com)
Hastings Reports Second-Quarter Loss
-- Hastings Entertainment reported a net loss of $4.1 million, operating loss of $5.1 million and revenue of $110.5 million for the quarter ended July 31, 2011. Music comp revenue was down 5.7%, a slight improvement over the 7.5% drop in the prior-year period. Video game comp sales dropped 5.1% after a 23.3% gain last year. Movies dropped 11.4% after a 9.3% gain last year. For the six-month period ended July 31, music comp revenue was down just 2.1% compared to 6.1% in 2010. That 2.1% decline was the result of "lower sales of used CDs and music DVDs, partially offset by a slight increase in sales of new CDs." (Press release)
Onavo's Suspect Math on Spotify U.S. Phone Installations
-- Here's a very interesting number that's getting some attention online, but don't treat it as gospel: Spotify has a 4% iPhone installation rate in the U.S., according to Onavo. That lags far behind a couple Scandanavian countries but comparable or better than some other Spotify markets in Western Europe. Onavo puts the installation rate of Spain at 5.8%, the U.K. at 2.9%, the Netherlands at 2.5% and France at 2.4%. But the U.S. is far behind Sweden at 18.6% and Norway at 13.1%.
How does Onavo track this? The company offers a data compression service so mobile phone owners transmit less data through their mobile carriers. A free iPhone app allows users to track the quantity and characteristics of their data usage. So Onavo knows what other iPhone apps are transmitting data that its servers compress and transmit to mobile carriers. But a 4% installation rate in the U.S. seems too high.
Let's do the math. There are many estimates of the number of active iPhone users in the U.S. Let's use a safe range of 20 million to 30 million. A 4% installation rate implies there are between 800,000 and 1.2 million U.S. iPhones with the Spotify app. But given what we know about Spotify's growth in the U.S. that range doesn't make sense. The latest estimate of U.S. Spotify users - across all smartphone platforms, by the way - is 175,000 paying subscribers and 1.4 million total users, according to MediaMemo. And we know only paying subscribers get the mobile access that would necessitate installing the Spotify app. So either Onavo's estimate is way off or hundreds of thousands of people have installed the Spotify app even though they cannot use it. It's entirely plausible that some people installed the app before figuring out mobile access would cost $9.99 per month. But 800,000? Implausible. ( Onavo blog)
Are Hardcover Books Going the Way of the Dinosaur?
-- Hardback book sales in the U.K. are plummeting in the age of ebooks, according to The Guardian: "Sales of adult fiction in hardback so far this year have fallen by over 10% according to book sales monitor Nielsen BookScan: by this point last year, sales of the format had reached £29.7m, while this year they stand at £26.6m. Cheaper paperback sales, in contrast, have only fallen 6%. Hardback sales have fallen in volume as well as value, BookScan said, from 2.8m copies sold by this point last year to 2.6m this, echoing a trend over the last two years: 8.5m copies of adult fiction hardbacks were sold in total in 2009, compared to just 7m in 2010." ( The Guardian)