Emusic ai mstudy

eMusic Research Webinar
Consumer Motivations: Moving from Physical to Digital

PRESENTED BY

ADAM KLEIN, EMUSIC CEO & PRESIDENT, WITH JAMES FARRELLY, AIM HOST
FEBRUARY 2012 • 1

Presenters

ADAM KLEIN JAMES FARRELLY
eMusic President & CEO AIM Host

FEBRUARY 2012 • 2

What We’ll Cover Today

• Physical vs. Digital

• Digital Music Consumers

• Streaming vs. Owning

• UK and US Comparisons

• Future Predictions and Market Movers

FEBRUARY 2012 • 3

Physical vs. Digital:
How are music fans consuming music today?

FEBRUARY 2012 • 4

UK Consumers are physically oriented…

80% Buy Physical 70% Download 46% Stream

NOTE:
The statistics referenced in this study are from a research study conducted
with Insight Strategy Group in December 2011. The Universe was a UK
nationwide sample of 1400 digital music purchasers, ages 18-64.

FEBRUARY 2012 • 5

…and primarily listen to hard copies from their
home stereo system

70% play 52% on my 48% on my 23% on my 6% on my
CDs, records on computer mp3 player smart phone tablet
my stereo

FEBRUARY 2012 • 6

Music Festivals Drive Ownership
After purchasing hard copy in retail stores or online—
live music events are one of the top three ways to
purchase for all consumer groups.

.

NOTE: Omnivores are the only exception. ADAM KLEIN, EMUSIC CEO & PRESIDENT, WITH JAMES FARRELLY, AIM HOST
For this groups, artists websites are part of the top three purchasing sites FEBRUARY 2012 • 7

Digital Music Consumers

FEBRUARY 2012 • 8

Digital Music Consumer Segments

MORE INVOLVED

Highly Involved, More Mainstream Highly Involved, More Niche

Active in seeking out mainstream Active in seeking out more offbeat
music, pop culture experts music, embrace the independent with
an aversion to the mainstream

MAINSTREAM OFFBEAT

Less Involved, More Mainstream Less Involved, More Niche

Loosely engaged with music but lean Introverted, less active and less
towards the popular when interested engaged consumers with offbeat tastes

LESS INVOLVED

FEBRUARY 2012 • 9

Five Segments that We’ll Reference Today

MORE INVOLVED

Mainstream Cultural
Omnivores
Leaders Independents

MAINSTREAM OFFBEAT

Mainstream Independent
Followers Followers

LESS INVOLVED

FEBRUARY 2012 • 10

Streaming vs. Ownership


Why is ownership preferred over streaming?

• 87% will not give up owning music for streaming

• 93% feel that owning music gives them security

• 68% feel that streaming from a subscription service
means that they don’t have control (78% Cultural Independents)


Streaming Adoption is tied to Websites,
Not Mobile

How are consumers streaming music that they don’t own?

• 31% on their computer

• 17% on their mobile device


Streaming is often a catalyst to ownership

Streaming plays a key part in the
new music discovery process.

64% use streaming to discover new
music before deciding to buy it.

70% will stream for free, but will
not pay to stream music.


UK & US Comparisons


UK Consumers are more physically-oriented…

80%
Buy Physical
51%

70%
Download Music
71% UK
US

46%
Stream
52%

0% 20% 40% 60% 80% 100%
NOTE: Respondents were asked to please select the
statement(s) that best describe them.

Across all formats, US consumers are more
likely to stream

Both US and UK
consumers are
Streaming music I don't 31% more likely to
own on my computer 53% stream music
that they don’t
own!
Streaming music I don't 17%
own on my mobile 35%

Streaming owned music UK
17%
via a cloud on my US
computer 20%

Streaming owned music 14%
via a cloud on my
mobile 17%

0% 20% 40% 60%
NOTE: Respondents were asked to please select the
statement(s) that best describe them.

Future Predictions:
What will cause the shift from physical to digital?


4 Key Drivers of Change

UK Cultural
Independents
enjoy the social
currency that
music provides
VALUE + CONVENIENCE ARTIST SUPPORT + COMMUNITY

Exceptional value that is part of Create a experience where consumers
an enhanced, full experience can feel closer to and support the artist

Easy access to personalized Evoke the real-world feeling of artist
recommendations + rich listening interaction and backstage access
experiences


Tap Into The UK Festival Culture
Create a virtual way to replicate
the physical social experience and bring
fans closer to the artists they love

.


Market Movers:
What opportunities exist for digital services?


Ownership

Ownership is still the key market driver.

Cultural Independents are more oriented towards owning than streaming—
they truly value the experience of owning music.
.


Targeting

Knowing your target and super-serving your audience is how today’s digital
music services will get ahead.

Digital music marketing today is direct-to-fan.


Questions?


Thank you

FOR MORE INFORMATION, CONTACT:

Adam Klein, eMusic CEO & President
pr@emusic.com | www.emusic.comPRESIDENT, WITH JAMES FARRELLY, AIM HOST
ADAM KLEIN, EMUSIC CEO &

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