An ever-growing number of startups have launched and much venture capital has been invested under the presumption that people actively seek new music and would be interested in independent fare if given the opportunity to hear it. And indeed, some people actively seek out new music–but just some.
Playlists are one way that music fans discover new songs. For example, one of Spotify’s early, unique selling points was based on the idea that people will discover music through the sharing of songs and playlists. Over time the service has added third-party apps that create new and different ways to discover music–for example, concert reviews by Pitchfork, charts by Billboard–but the playlist is still at the heart of the Spotify experience.
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But playlists don’t seem very popular in light of a February survey by Nielsen that revealed music fans of all stripes aren’t devoted to them. Half of only one group–those who Nielsen calls “digital fans”–enjoys sharing playlists with their friends while the other five groups showed far less interest. Overall, less than half of the people surveyed enjoy compiling playlists with a specific theme.
Nor are the six consumer groups in Nielsen’s study particularly interested in independent music. Disinterest in indie music is important to music services. It makes up the majority of releases in a given week. Services’ editorial coverage and recommendations often focus on independent releases. In most cases, the concept of music discovery is synonymous with music that is out of the mainstream.
Only “aficionados”–the most active and highest-spending music fans–really like indie music and going to concerts by indie or unsigned artists. All other music fans, who comprise 86% of consumers and 66% of music spending, can be described as being indifferent to indie music.
The uncomfortable truth is most people don’t invest much time in discovering. Arbitron’s new Infinite Dial 2013 report shows that AM/FM radio ranks well ahead of YouTube, music TV channels, Facebook and Pandora for music discovery. With the exception of Facebook, each is a passive experience. Platforms that demand more interaction, such as music blogs and Spotify, are at the bottom of the list.
The fact that most people are quite passive with music discovery suggests many business models are targeting only one small segment of consumers. From music discovery services (the Twitter-owned We Are Hunted) to concert ticket services (Thrillcall, Tixie) to Internet radio (Earbits, Shuffler.fm), an incredible amount of services are built on consumers’ love of indie music. That may be appropriate for the 14% of consumers who told Nielsen they mostly like indie music, but it doesn’t address the majority of those who aren’t interested.
Music startups have to make a choice: Super-serve a small group of indie-loving, discovery-hungry music lovers, or create a product that appeals to the masses. Products that allow people to discover music passively, such as radio and TV, have mainstream potential. All others might need to make discovery easier to win over lucrative mainstream consumers.