Transcript Document

Entertainment: Music Trends
March 2011
Contents
Market Environment
Annual digital music revenues to hit
£12.3bn by 2015
Bolstered by the take-up of subscription services, annual digital music revenues are
predicted to hit $20 billion (£12.3 billion) by 2015. Revenues from music subscription
services will grow by over 60% between 2011 to 2015 at the expense of individual track
downloads from outlets such as iTunes. The growth in individual tracks downloaded from
digital music stores has slowed in the US - a trend likely to be emulated in Europe.
Analysts said that the industry is failing to cope with the amount of music freely available
online, not just the illegal kind but on-demand music services such as Spotify, which is
masking the fact that the industry isn’t maximising revenue potential.
A BPI report released during the last quarter suggested that digital music downloads
account for over a fifth of legal music sales in the UK, but that over 76% of all music
downloads were classified as illegal.
Source: NMA.co.uk
Music: Did you know?
• Growth in sales of digital music halved last year in spite of increased action on
behalf of governments to tackle digital piracy globally.
• Digital music revenues grew 6% to $4.6 billion in 2010, only half the 12% growth
seen in 2009, and a fraction of the 25% growth in 2008 (Financial Times, Jan
2011)
• Of all music singles sold, 98% are now purchased online, according to the latest
figures from the Office of National Statistics. In 2007, digital and physical single
sales totalled 87m, in 2009 digital and physical sales had reached 153m - an
increase of over 75%.
• Digital album purchases grew by 160% in the two years between 2007 and 2009
as more and more consumers shifted to using mp3 devices. Physical album
purchases fell by 14% over the same period.
• 25% of young people aged 11-14 purchase clothes online, 23% purchase video
games, 21% purchase DVDs, 20% purchase CDs and 18% purchase music
downloads (MediaTel, November 2010)
• In September Britain recently passed the 500-million mark for digital music
downloads (Official Charts Company)
• Official digital music has grown at a phenomenal rate with over 98% of the singles
bought now being downloads (MediaTel)
Source: Mintel Oxygen, Feb 2011
Online Spending Habits:
Market Size and Forecast
UK online spending trends and forecasts, 2005-15
120
Best case (£m) 107.4
Market value (£m)
100
Mintel forecast (£m)
97.3
Worst case (£m) 87.2
80
(£m)
58.6
60
40
Confidence intervals
20
0
0
2005
95%
90%
2006
2007
2008
2009
2010
2011
2012
2013
Est.
Actual
2014
2015
70%
50%
Forecast
Source: IMRG Capgemini Index/Mintel
Note: 2005-10 figures are from IMRG, 2011-15 projections
are Mintel’s own projections based on these figures
Source: Mintel Online Spending Habits, Feb 2011
• Online spending in the UK
exceeds that of any other
European country, with
IMRG data putting the
figure at £58.6 billion in
2010.
• Online spending grew by
17.6% year-on-year in
2010.
• Average level of spend
online by consumers has
been responsible for
driving growth. Ofcom
estimates that average
online consumer spend
for the year reached
£1,031.
Media Multi-taskers
“
“
With so much media entertainment
available to the 16-24-year-old
consumer, competition for time and
attention is intense. Rather than simply
extending reach through establishing a
presence across all media, advertisers
are now faced with the challenge of
trying to reach the media multi-tasker,
who is able to undertake several forms
of communication and entertainment
simultaneously and therefore shift
attention towards whichever media are
the more engaging. (Mintel, Oct 2010)
Source: eMarketer, Feb 2011
Traffic and Demographic Trends
Music Search Traffic KPIs
Traffic
• Searches for clothing generics increased by
+37% between 2009 and 2010
• Searches for clothing generic increased by
+15% Oct to Dec 2010 v Oct to Dec 2009.
Insights:
• Sales by DIY retailers in 2010 were £10.9
billion, down 2% on 2009 (Mintel)
• Over the last five years there has been a fall
of 4 percentage points to about 56% of the
adult population, that's 2 million fewer people
undertaking DIY projects (Mintel)
1. Microsoft Advertising Intelligence Tool
Home & Garden Demographics and Daily Trends
35-49
32% . 25-34
1.Microsoft Advertising Intelligence Tool – December 2010 to Feb 2011 data
Retail & Online Retailers Spend
• For the most part, Retail advertisers tend to spend the most on
advertising in the Press and on TV
• On average the industry currently spends around 5% on Internet
advertising (not including search). 2010 expenditure has increased
+1% from that of 2009
Source: NNR adDynanix : Jan – Nov 2010
11
Display Advertisement Publisher Location:
Reach and Frequency (Retail – Food)
• Microsoft sites delivered both the highest number of impressions and the highest number
of unique visitors for Food Retailers in Dec.
Source: ComScore adMetrix : December 2010
Display Advertisement Publisher Location:
Reach and Frequency (Retail – Food)
• Microsoft sites also have the highest share of Food Retailers ad impressions, however
average frequency is very competitive and far less than eBay, AOL and Glam Media.
Source: ComScore adMetrix : December 2010
Top Advertiser by Impression and UU by ComScore
AdMetrix (Food Retailers)
Source: ComScore AdMetrix – December 2010
Industry Insights
Music Online usage
Internet activity on PC/laptop in last 3 months
all respondents, by demographics, August 2010
In October 2010 a Mintel report
found that:
Base: 3,000 internet users aged 16+
Source: GMI/Mintel: Youth Media Consumption Habits, October 2010
•
65% of 25-34 year olds
listened to music online for free
between Aug – Oct 2010
•
This rose to 77% of users aged
16-24 year olds!
Music Online usage
The same Mintel study also found:
Media usage habits
all respondents, by demographics, August 2010
Base: 3,000 internet users aged 16+
Source: GMI/Mintel: Youth Media Consumption Habits, October 2010
Users expect to be able to download music and
films free of charge from the internet
% who agree or agree strongly, by gender, age and social grade
Source: nVision Research, 2010
Base: 1,000 online respondents aged 16+, GB
What Do People Buy Online?
Goods/services bought online, December 2010
“Which of the following, if any, have you bought/spent money on via the internet in the last 12 months?”
Base: 1,025 internet users aged 16+
Any
Books, CDs, DVDs, video games/software
Clothing/footwear
Toiletries/cosmetics
Food and drink
Insurance
Holidays/leisure travel
Entertainment tickets
Toys and games
Home electronics
Music, video/film, software downloads,ebooks
Household cleaning products
Gift vouchers
Other housewares
Portable electronics
Personal accessories
DIY or garden products
Home appliances
Furniture and furnishings
Online gambling/casino gaming
Sports equipment
Online subscription for music, video or magazine content
Online dating membership
Motor vehicles
None of these
Source: Ipsos MORI/Mintel
Source: Mintel Online Spending Habits, Feb 2011
0
10
20
30
40 50 60 70
% of respondents
80
90
100
What entertainment would you miss most on a
desert island?
By those aged 14-24
Source: British Music Rights/UK Music/University of Hertfordshire/nVision, 2009
Base: 1,808 respondents (1,158 in 2008) aged 14-24, UK
“I prefer music which is not mainstream but new and
challenging”
% who agree or agree strongly, by gender, age and social grade
Source: nVision Research, 2010
Base: 1,000 online respondents aged 16+, GB
Modern pop music no longer addresses social issues and
problems as it used to do
By gender, age and social grade
Source: nVision Research, 2010
Base: 1,000 online respondents aged 16+, GB
Frequency of listening to music
By gender, age and social grade
“Which of these best describes how often you do each of the following activities? Listen to music”
Source: nVision Research, 2010
Base: 1,000 online respondents aged 16+, GB