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Streaming Drives Sales, According to New Study
YouTube might be "the devil" to Garth Brooks, but in another's eyes, it's a great source of music discovery. In fact, a new study being released by the Country Music Association suggests that adults 18-plus are far more likely to buy music after being exposed to it on YouTube, Spotify and other streaming services than listeners who hear a song for the first time on AM/FM radio.
The study, which focused on consumers who remembered hearing a new track in the previous seven days, asked where they heard the music, if it was by an artist they were already familiar with, and how they responded to the most recent new song they heard.
Some 69 percent took some action, whether that meant searching for further information, playing it for a friend or making a purchase. Invariably, users who discovered the song online were more likely to respond. Half who listened on a streaming app did further research -- such as hitting Shazam to identify the artist, or Googling the lyrics. That figure is triple the 17 percent of radio listeners who conducted follow-up research.
More importantly for labels and artists, fans who streamed a new song were three times as likely to buy it than listeners who were exposed to it on radio. Some 25 percent of respondents purchased a new piece of material after hearing it for the first time online, while only 8 percent of radio listeners bought it.
Consuming music through apps is, of course, easier – and safer – than buying music while listening to the radio in a car. But that's not the only thing driving the disparity.
"A lot of the streaming users are very heavy music enthusiasts, so they do want to have a colleciton of music and they are buying the music," says CMA senior director market research Karen Stump. "Obviously it's not 50 percent, like we'd all like it to be, but compared to other discovery platforms, it is definitely a signfiicant player to driving purchase conversion."
The CMA is unveiling the proprietary study to its membership during a Nov. 20 luncheon, but its findings have significance for music beyond country, too. Respondents were categorized by their primary format to study how, for example, a pop music fan's music-discovery process differed from a country-centric consumer. The differences between genres were negligible.
"So what you're seeing in this report isn't just country music fans," Stump says. "It's all genres."
While radio listeners might be less liable to respond to new music, terrestrial broadcast is still the media where most people find new songs for the first time. Some 43 percent of consumers in the sample cited the radio as the place they most recently heard a new title. YouTube, streaming apps and other online properties totaled 28 percent.
While researchers were somewhat surprised that streaming consumers were heavier music buyers, they were also shocked to discover how little people are sharing their discoveries via social media. Just 5 percent of radio users mentioned a new song on Facebook. That number jumped to 13 percent for streaming apps and 23 percent for YouTube constituents.
Even allowing for more traditional forms of sharing -- such as playing a new song for a boyfriend -- YouTube users, at 49 percent, were far more likely than radio listeners, at 14 percent, to pass it along.
Those positives don't entirely negate the arguments that Brooks, Taylor Swift and Jason Aldean's label, Broken Bow, have made as they take on YouTube and Spotify. Those artists are big album sellers, and the study supports the notion that exposure to new music doesn't necessarily translate to album purchases.
Nineteen percent in the study group bought newly-discovered music in the previous week, but of that 19 percent, a full 41 percent of them bought just the one digital track. Meanwhile, 29 percent bought that one album. Only 17 percent bought that album and one or more additional releases.
Clearly, Brooks, Swift and Aldean are being reasonable in protecting their album sales, though most other artists would not be wise to model their marketing plans after them.
"I don't think everybody could pull off what they could pull off," Stump notes.
One other piece of data helps to indicate how small the number of hyper-fans music companies and artists are targeting. The survey only represents the habits of the 23 percent of respondents who could remember hearing new music in the previous seven days. Reverse that data, and it means 77 percent of American adults either don't hear a new song in the course of seven days or don't recognize that they're hearing something they've not heard before.
Thus, the 19 percent of people who bought new music during the seven-day window were really just 4 percent of the total population (19 percent of the 23 percent who recognized new music). And the 17 percent of those buyers who bought more than one album are a mere 0.07 percent of the total population (17 percent of the 4 percent).
The CMA intends to break down the data further in the coming months, sorting consumers by their level of enthusiasm. Core uber-consumers will, of course, be a central focus.
"They're not the only people that we need to understand," says Stump, "but in order to impact sales of our music, we need to know more about that group and how to market to them."