Brands & Merch CMU Trends Labels & Publishers Live Business The Great Escape 2015

Trends: Five things you should know about UK consumers

By | Published on Friday 29 May 2015

Chris Carey TGE

During the CMU Insights strand ‘What’s The Point Of A Record Label Anyway?’ at The Great Escape this month, Chris Carey, CEO of music research agency Media Insight Consulting, summarised the findings of his company’s recent survey of UK consumers which set out to discover how people engage with both recorded and live music, and music-based merchandise.

More than 2500 respondents were surveyed and from their answers MIC recently published its UK Music Consumer Insight Report. After his keynote at CMU@TGE, we asked Carey to pull out the five key messages he thinks the music business needs to hear

1. UK consumers are passionate about music
One of the biggest challenges that all of us in the music business experience today is the notion that music should be free. The notion stems from the digital piracy of music at the turn of the millennium. This is usually based on the fact that piracy made music free, rather than being based on any understanding of whether consumers value music. If consumers value music, music has a value and therefore should not necessarily be free.

People are willing to pay £3 for a cup of coffee from Starbucks; £9 for a fancy glass of wine; £80 a month for a Sky TV subscription, which gives an incomplete offering and still makes you watch adverts, often within the programme itself. But £10 for all the music in the world, on demand, on your phone, PC, tablet, ad-free, is considered far too expensive.

When you look at our consumer research in the UK, 30% of the population either agree or strongly agree that music is their number one passion. When you talk to people aged 16-24 that number grows to 44%. And of those 35-44 – who we often consider too old to be interested – 36% agree! There is a passion for music that transcends age. A key challenge for the UK music industry is harnessing that passion and transforming it into income, so the industry can invest in making more music.

2. When it comes to music listening, radio still matters
When you ask people about how they listen to music, traditional radio is still the most popular way people engage. 68% of people in the UK have listened to the radio in the last six months.

While traditional radio is the most popular way to listen to music, there is an expected skew towards the older age brackets. On the flipside, 76% of 16-24s listen to music on video sites. Music on video sites was the third most popular way of listening to music (53%) and music on CD/vinyl was second with 62% of the UK listening this way.

Traditional radio listening is buoyed by the role radio plays in the car. As new cars offer greater variety (USB plug ins, aux channels and 3G/wifi enabled services) it will be interesting to see whether radio can keep its grip on the market. For now, traditional radio remains a crucial way of listening to music and a valuable way to engage with the mass market consumers, in a consistent way.

3. Music discovery. There is more to life than playlists, but they really help!
When you look at the UK population, traditional media – radio and TV – still rules the roost when it comes to music discovery. However, the youngest age groups are much more tech savvy and are discovering new music through the internet, music apps and streaming playlists.

73% of 16-24s discover new music on the internet, 42% discover on music apps and 35% through streaming playlists. These numbers are far higher than the UK average, demonstrating how youth music consumption in the UK is an increasingly digital culture.

4. People still buy music. And people still buy CDs!
Another common misconception about music is that CDs are obsolete. Globally, 46% of recorded music revenue comes from physical product. We could quickly argue that it is countries without strong internet penetration or tech adoption that is driving this trend, but Japan and Germany are some of the leading physical markets, with only 17% and 22% coming from digital respectively. (according IFPI figures).

When we look at the UK picture, 58% of the UK population bought a CD in the last twelve months! Importantly, there are almost twice as many people buying CDs as there are buying tickets for gigs and concerts. When you look at the demographics, it is that older generation still purchasing CDs, with young people preferring downloads and streaming.

But depending on the composition of your fan base, there can be a lot of money to be made by serving the older generation with the physical product they are still inclined to purchase.

5. People buy merchandise at gigs more than anywhere else
As music sales decline and audiences migrate from downloads to streaming, some in the music business have emphasised an importance on revenue streams such as from merchandise above the sale of music. It’s therefore vital to give music business decision makers an insight into the types of merchandise that get sold, who buys the different offerings, which genres of music are best for which type of merchandise, and which outlets are most popular.

30% of UK consumers have purchased merchandise in the last twelve months. Compare this over the same period to 58% of consumers who have brought a CD and it’s clear which revenue stream the average UK consumer is more likely to engage with. Now let’s be clear, we are not saying don’t sell merch, it’s important to maximise revenue from core fans and merch can be one way to do this, but we think that keeping the focus on selling music is essential ahead of the distraction of other revenue streams.

‘At the gig’ is the most popular merchandise outlet in the UK with 35% of merchandise buyers engaging this way. This is perhaps not too much of a surprise when one considers that at the gig is often the only time that fans come into contact with merch buying opportunities. The music business at large really could do more than it already is to work with promoters and get ‘merch plus ticket’ bundles on the table for fans.

There is a noticeable gender split, with females much preferring ‘at the gig’ and males much preferring high street shops. Again we have to wonder if there is a lost opportunity being uncovered with this understanding of the statistics. High street stores, and independent music retailers in particular, are looking for additional revenue streams and are the experts at point of sale marketing. Is the music business missing a revenue opportunity by not working more closely on merch with bricks and mortar retailers?