In the physical world, retailers do a good job of targeting specific customers. Country fans can find the artists they hear on the radio while shopping at a Walmart in a suburban or rural town. Rock and indie rock fans are well-served by the selection of vinyl and CDs at independent record stores. Christian bookstores cater to fans of the genre’s music. In some cities, Latin music fans can find music retailers targeting native Spanish speakers.
Digital retailers and services have incredibly deep catalogs but, ironically, lack the diversity of the physical world. Fans of pop, hip-hop and rock are incredibly well-served. Subscription services tend to lean toward indie rock in editorial and exclusive content, targeting one subset of consumers at the expense of fans of other genres.
The numbers suggest digital music services are underserving some groups of customers. Billboard analysis of Nielsen data shows large differences exist in the relationship among track sales, streams and radio play. The data covers track sales and streams for the top 500 songs ranked by Nielsen BDS detections (radio spins) from the beginning of the year through mid-September.
Some variation is understandable. Fans of some genres adopt new technologies — or revert to old technologies, such as the vinyl LP — at faster rates than others. Demographers differ in their preference for the CD and watching online music videos. A genre that attracts an older demographic would naturally display different digital activity than a genre favored by younger consumers.
Two ways to assess performance at digital platforms is to compare track sales and streams with the number of spins a song received. A higher ratio means a song was able to generate good activity at download stores and streaming services. A lower ratio means less sales or streams in spite of significant radio play. A relationship between radio and digital activity doesn’t necessarily mean one causes the other, but radio is well-known to have a positive impact on track sales and streams.
It’s clear that some consumers are better-engaged at digital platforms than others. Despite enough airplay to rank in the top 500 BDS detections, songs in the Latin, Christian and gospel genres woefully underperform at digital stores and streaming services alike. Country, pop and rock are about average when comparing track sales and radio spins (although country is below average in number of streams per radio spin). Hip-hop tops all genres with the most track sales and streams per radio spin.
Not coincidentally, the same three genres also have the lowest streams-to-spins ratio. Christian, Latin and gospel lag behind the other genres represented in the top 500. Hip-hop was tops again, followed by R&B, pop and rock. Country was far below the streams-to-spins average, suggesting country fans are more apt to buy than stream.
Current efforts could help some listeners better-engage with music. One likely reason Latin performs better at streaming services than download stores is Muve Music, the subscription service of prepaid wireless carrier Cricket Wireless. Latin is one of Muve’s most popular genres due to Cricket’s demographic. Similarly, country could perform better at streaming services if Rdio’s efforts to target country fans pay off.
Back to the original question: Why do digital stores and services treat all customers the same? Incentives. Stores and services have an incentive to cater to popular genres instead of less popular ones. Services also have an incentive to cater to the genres favored by the early adopters likely to become customers.
The creation of genre-specific digital services is unlikely, given the current upfront and recurring costs. That leaves two options for rights owners: create licensing terms that allow for specialization or help services target underserved fans. There need not be such a wide digital divide in music.