Wait, Is Streaming Actually Encouraging Record Sales? Survey Says 'Yeah... Maybe'

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Customers shop for vinyl records during World Record Store Day at Dussmann on April 18, 2015 in Berlin, Germany.

Two-thirds of music fans now consider themselves ‘multi-channel’ consumers -- those who, for example, listen on streaming and purchase a CD.

Streaming may have been hailed as the death knell of the CD and download, but new research suggests that services such as Spotify and Apple Music can actually drive sales -- at least for dedicated music fans.

According to a new survey produced on behalf of U.K. labels body BPI and the Entertainment Retailers Association (ERA), 37 percent of streaming subscription holders think that using the service had increased their spending on downloads. A similar pattern emerged with physical formats, with 13 percent of respondents saying that a streaming subscription had led to a higher number of CD purchases. For vinyl, the numbers climbed to 19 percent of those surveyed.

Perhaps more significantly, 69 percent of the survey respondents either agreed or strongly agreed with the statement: “I stream to discover music and see what’s popular, but when I come across something I love, I like to buy it.”

Close to half (42 percent) of those questioned said that they paid a subscription for a streaming service because they had used a free trial version first. Just under a third (29 percent) said they did so to remove ads and 27 percent said they paid for a subscription to access the service on a mobile device.   

When asked "what would tempt you to buy more CDs?" 34 percent said exclusive tracks. Then again, the exact same percentage of respondents also said nothing would tempt them. When it came to vinyl purchases, 22 percent said limited edition runs would encourage them to make more purchases, but a whopping 57 percent said nothing could tempt them to join the vinyl revival.

The survey was conducted last month by market research company AudienceNet using a “broadly representative” sample of 1,000 members of the U.K. adult population aged 16 to 55 plus, who all identified themselves as music consumers.

Other key findings from the report include:

-- Radio remains the most popular format for music consumption, accounting for 35 percent of total listening. This was followed by the CD at 20 percent and free streaming at 19 percent. Despite its growing popularity among mainstream adopters, paid streaming only accounted for 6 percent of total music listening.   

-- Two thirds (66 percent) of music fans consider themselves ‘multi-channel’ consumers, with millennials aged 16-34 most likely to be paying for a streaming subscription in addition to making download and physical format music purchases. The same demographic is also most likely to combine free streaming and download sales. 

-- The most common multi-channel scenario among music fans questioned was free streaming coupled with CD listening, which accounted for 49 percent. Free streaming and downloads was the second most popular combination at 44 percent.

* Just over a third of respondents listen to music for over 3 hours a day. Half of them purchased a CD in the past 12 months with 15 percent paying for a streaming subscription in the same period. After CDs, the most popular music purchase was concert tickets (35 percent) followed by download singles (33 percent) and download albums (31 percent).  

-- Three-quarters of those aged 16-24 use a mobile phone as their primary listening device.  

-- Gifting remains a key factor, accounting for one in five CD purchases year-round.

According to figures from the Official Charts Company, 2014 saw record growth in the streaming sector with British music fans clocking up 13.7 billion audio streams. BPI predicts that number is likely to double in 2015 with streaming on course to eclipse downloads as the most popular digital format.

Nevertheless, physical formats are proving to be surprisingly resilient with combined CD and vinyl sales still accounting for over 60 percent of all albums sold in the United Kingdom, amounting to around £500 million ($760 million).

The year-on-year decline in CD sales -- while still falling -- also appears to be slowing. In 2012, CD sales dropped by 20 percent. The year after, they fell by 13 percent. Last year it was 8 percent and in the first half of 2015 it stood at 6 percent. ERA figures additionally show there are now more than 10,000 High Street outlets that stock CD and vinyl product across the U.K.

“This research suggests music fans are a great deal more nuanced in their approach to new forms of technology than they are sometimes given credit for,” said Kim Bayley, Chief Executive Entertainment Retailers Association.

Geoff Taylor, Chief Executive of the BPI and BRIT Awards, sang a similar tune, saying that “the enduring appeal of compact discs and vinyl has surprised many commentators who wrote them off years ago. Unexpectedly, streaming may be enhancing their appeal to many fans, who appreciate the immediacy and convenience of services like Spotify, Apple Music and Google Play to discover and enjoy a huge range of new music, but still want to own and collect albums by artists they truly love.”