Research: Streaming Taking its Toll on Online Music Purchases
Once upon a time, music fans bought their favourite artists’ work on shellac 78 rpm records. Then came vinyl records on 33 and 45 rpm, music cassettes, CDs, minidiscs (anyone remember them?) and, more recently, online music downloads. From physical items to disembodied digital files, music as a commodity — and where it can be purchased — has undergone a dramatic evolution.
And this evolution is continuing even now, with online CD and music download sales losing ground to the growing popularity of streaming, as the latest figures from Roy Morgan attest.
While the popularity of online shopping continues to skyrocket in Australia, with 41.2% of Aussies 14+ making at least one purchase via the internet in an average four-week period (up from 31.6% in 2012), CDs and music downloads have not kept pace with this growth.
In fact, both products have been on a downward trajectory over the past few years.
In the 12 months to March 2012, 6.1% of the population paid to download music and 2.1% purchased CDs online in any given four-week period. As of March 2016, these figures had slipped to 4.6% and 1.1% respectively.
In the meantime, the proportion of Aussies who streamed music online in an average four weeks grew dramatically, from 10.3% in 2012 to 19.7% in 2016. Streaming radio also gained popularity, with 9.6% of the population now doing it (up from 6.1%).
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Buying music online vs. streaming: the record industry’s ongoing evolution[/caption]
However, in this shrinking market, certain consumer groups remain well above average for purchasing music online: for example, people who also buy other entertainment products online. Most strikingly, Australians who purchase movie or TV show downloads are almost 10 times as likely as average to buy music downloads as well!
Norman Morris, Industry Communications Director, Roy Morgan Research, says:
“Ever since CDs knocked vinyl from its perch back in the 1990s, the music publishing industry has been evolving at a vertiginous rate. While record stores still exist (and vinyl is making a comeback), online shopping changed the face of music retail just as it did many other retail categories. But now, things are changing once more. The online space remains as crucial as ever to our music consumption, but the advent of streaming — whether free (eg. radio station apps) or by subscription (eg. Apple Music) — has impacted sales of downloads and CDs.
“However, music downloads in particular still have some devoted buyers. As discussed above, people who buy other entertainment products online in an average four weeks are dramatically more likely to also purchase music downloads, representing an irresistible opportunity for internet retailers to cross-promote their products.
“And this is just the tip of the iceberg. With the deep data provided by Roy Morgan Single Source, music publishers and online retailers can explore consumers’ demographics, attitudes, leisure activities and online-shopping habits to identify precisely who is more and less likely to continue buying music downloads and/or CDs online — and tailor their marketing campaigns accordingly.
“For example, Roy Morgan data reveals that Australians who go to see live rock/pop music in any given three-month period are more than twice as likely as the average Aussie to purchase downloadable music in an average four weeks. What’s more, an above-average proportion of people who stream radio or music also buy music downloads…”