To be sure, old media is still impactful. Even in the digital age, nothing else comes close to broadcast radio's influence. Sixty-one percent of people told Nielsen they discover new music through terrestrial radio, a sizable increase from 51 percent a year earlier. (That's slightly lower than another survey, the latest "Share Of Ear" report from Edison Research and Triton Digital, which found that 69 percent of Americans cite radio as a source of music discovery.) The next-most-cited discovery mechanism after radio was friends and relatives (45 percent), then movies (31 percent), audio or video streaming apps like YouTube (27 percent), social media apps (25 percent) and television (23 percent). But streaming options such as Pandora and on-demand services like YouTube and Spotify are eroding broadcast radio’s large audience and listening time. These trends suggest the way people discover music is changing.
Notably, live events have become more impactful. The percent of people saying concerts and other live events are a source of music discovery rose to 12 percent, from 7 percent in 2014.
While festivals are widely believed to be a crucial for music discovery, Nielsen's report says festivals and other live events are a source of music discovery for fewer than one in eight Americans. Given the proliferation and increasing popularity of festivals, that might seem to be a low number -- after all, a festivalgoer would struggle not to run into a handful of unfamiliar artists playing a variety of stages.
Only about a fifth of Americans actually attends a concert in a given year -- the number was 22 percent in 2013, according to a Live Analytics survey. But many people that attend a concert make a discovery. A recent survey conducted by MusicWatch for ticketing company Eventbrite found that a third of people that attended at least one concert in the prior year discovered an artist at a concert or festival.
Radio ranks to high on the list of discovery sources because it's a low-cost medium that's used by a high number of casual (and, no insult intended, low-value) fans. The same came be said for streaming apps. To listen to Pandora or watch a music video on YouTube requires little investment.
In contrast, concertgoers are high-value music consumers. Live music accounts for just over half of music spending, according to the latest "Music 360" report. Billboard estimates live music accounts for roughly $15.1 billion of the $29.07 billion total consumer spending on music, based on Nielsen's 13-and-over population of 266.7 million, and average music spending of $109. Over three in five dollars (61.5 percent, or $9.3 billion) spent on live music goes toward larger concerts while small club gigs and DJ events each account for 9.6 percent, or $1.5 billion.
Concertgoers are a valuable group. About 20 percent of Americans spend roughly $15 billion attending concerts and festivals each year. A third or so of this group comes away with interest in a new artist. Touring isn't cheap, but that return on investment shouldn't be overlooked.