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From Stream to Ticket: Mapping the Value of Music Discovery

Here’s another collaborative piece, this time with Eventbrite, as we learn more about the value of music discovery and the connection with music fans who attend concerts.

There’s an ongoing debate about the future of the music industry—and a central issue
revolves around how people’s changing consumption habits are affecting revenue for
artists.

Case in point: per capita spend on CDs and digital downloads fell from $35 in 2008
to $18 in 2014. However, per capita spend on live music grew from $29 in 2008 to
$48 in 2014.

Though it may look bleak for album sales alone, it’s promising news for the music
industry at large because concert-goers are more profitable–by a long shot–to the
industry than a fan who just buys an album and skips the show.

Fans that buy tickets to live events, big or small, spend nearly twenty times as
much on music (including concert ticket purchases) than non-ticket buyers: $276
compared to $15.

They spend four times as much on CDs and downloads, 10 times as much on
merchandise, and are nearly twice as likely to pay for a music subscription. As a platform that has ticketed more than 165,000 music events to date, Eventbrite has
experienced first-hand the rapid growth of concerts and festivals. So we set out to
understand the link between music discovery and live concert attendance.

In partnership with independent research company MusicWatch, Inc. we conducted a
nationwide survey of 1,000 people between the ages of 18-49 who have attended at
least one concert in the past year. We analyzed the results by grouping fans according
to the primary channels they use to discover new music and how uncovered postdiscovery
behavior is helping drive incremental spending in live music.

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Has the advent of social media and streaming services turned traditional discovery on its
head, driving listeners to the live show rather than the record or iTunes store? Let’s take
a look at streaming first.

What does streaming have to do with ticket sales?

Streaming services are on the rise, with participation growing from 56% of the Internet
population in 2012 to 69% in 2014. As a result, streaming services have become a major
source of music discovery: when asked how they discovered artists and bands in the
past year, 42 percent of survey respondents cited audio or video streaming services like
Pandora, Spotify and YouTube. And with new streaming services brought to market by
key players ranging from Apple to Jay Z, this trend isn’t going to slow down anytime
soon.

There’s understandable concern throughout the industry that streaming-induced
discovery will merely lead to more streaming, especially as physical and digital sales
decline. But fortunately for artists, that’s simply not the case. Half of the fans that
discover a new artist or band through streaming are buying tickets to their show.

But are all my friends doing it?

The music-curious aren’t just leaning on streaming services to find new sounds. Two out
of three respondents say they discover a lot of music they like on social networks, and
14 percent mentioned learning about entirely new artists and bands on Facebook,
Twitter, Instagram, Snapchat and Tumblr.

After seeing friends post about music or concerts, people don’t just listen to music—they
take the leap from online to offline and actually buy tickets to shows.

Part of this is because friends don’t let friends hit shows alone. The other part is thanks
to FOMO, “Fear of Missing Out,” which helps drive ticket purchases and concert
attendance. At Eventbrite, we’ve seen that a single Facebook share drives an
incremental $4.48 in ticket sales for music events.

It’s clear from those that discover music via social channels that nothing can replace the
exhilaration of a live show, especially when you know all your friends are there.

Guess what else drives FOMO?

Turns out, live streaming of events also fans the FOMO flames. Sure, people can now
enjoy live concerts from the comfort of their couch, but faraway fans aren’t just watching
shows passively in their slippers—they’re engaging online. A recent Eventbrite study on
20 million conversations about music festivals shows 23% of those posts came from
people participating remotely—totaling over four million updates from fans missing out.
After Coachella live-streamed the festival in 2011, ticket sales went through the roof (or
should we say, through the Sahara tent?). And the trend isn’t just a fringe thing: 70% of
live streaming participants say they are more likely to attend a future live event after
participating in the experience online.

Which channel breeds the highest value music fan?

While radio and TV remain the largest forms of discovery, the 8% of people who say
they discover new artists while at a concert, show, or music festival are
significantly more likely to purchase a ticket to see them perform again later. Just
goes to show, there’s nothing like the real thing, baby.

Fans who discover artists at live events are nearly two times as likely to buy artist
merchandise. And considering that the average merch buyer spends $104 in a year,
fostering discovery at shows has the potential to build a larger pool of revenue for artists.

Moving beyond linear discovery

While linear forms of discovery like radio-to-consumer are still very much alive, music
discovery today is a more integrated process. Streaming, social and live are on the rise,
and ultimately serve as key contributors to the upward trend in live music spending.

These integrated channels have the power to accelerate the discovery of new artists,
creating a viral loop that amplifies buzz and drives ticket sales.

The experience of attending a show is becoming more and more popular—and
profitable. Fans that buy tickets to live events, big or small, spend nearly twenty times as
much on music than non-ticket buyers. Not only is live the most engaging way to
experience music, it creates the strongest bond between artist and fan. Fans become
more emotionally and financially invested in the artists they experience live, bringing
more value to the industry—and the artists who make it run.

1: MusicWatch Annual Music Study, Internet Population 13+
2-4: MusicWatch, Inc

This article also appears on Eventbrite.com.

student listening to music

College Students Willing To Pay for Music Streaming Services

Here’s a collaborative piece between MusicWatch and Monmouth University on college students’ motivation to pay for streaming; the study shows a diverse mix of music engagement methods.

WEST LONG BRANCH, N.J. (July 1, 2015) — College students are more willing to pay for music streaming services than non-students, according to a Monmouth University analysis of MusicWatch Inc.’s Annual Music Study, which surveyed 5000 Americans 13 and over, including over 700 college students.

The study revealed that 3 out of 4 college students (77 percent) found some feature that would motivate them to pay for a premium music streaming service compared to 46 percent of overall streaming users.

Broad accessibility, ease-of-use, getting music they want right away and music discovery are key benefits students see from free or ad-supported music streaming. However, they would be more likely to convert to premium services if it was harder to get their music from free services, if the paid services offered more choices or if music wasn’t available from the free versions until later. Bundling the subscription fees with their mobile bills was also cited as an incentive to upgrade to a paid service, and the study also showed that free trials are a key lever in moving students from free to paid subscriptions.

The Monmouth University analysis was conducted by Joe Rapolla, chair of the Music and Theater Arts Department and director of its popular Music Industry Program. Rapolla, former senior vice president of marketing at Warner Music Group, concluded that subscription services need to strategically balance how their options impact their bottom lines.  In one case, the ad-supported (Freemium) model is a gateway to paid services, and in other cases, this is the option of choice.  According to Rapolla, the services need to structure their offerings, commercially positioning each so they are all generating revenue.

“The data shows that price isn’t necessarily the barrier,” Rapolla said. “However, given that many students are satisfied with the music they can get from the free, ad-supported options, and so many have come to rely on video streaming services to get their music, the value-proposition of premium streaming services becomes imperative to communicate. Free is a price point that needs to strategically and carefully co-exist with other price points.”

Despite the perception that college students might only be streaming music, the study showed that they are actually engaging in a variety of ways. Yes, they stream, but they also listen to CDs or their collection of digital downloads. One in five full-time college students bought a CD last year, and 25 percent are still buying paid downloads.

russ graph 1

“We have this habit of generalizing about college students, assuming they are at the bleeding edge of every entertainment technology,” said Russ Crupnick, managing partner of MusicWatch. “In fact, college students are a diverse population, and many embrace old-fashioned values related to music ownership or listening to CDs. Students do see value when they buy CDs or downloads; the industry has to convince them there is also value that comes with moving up to a paid subscription service.”

From MusicWatch’s study page: Methodology note: The data referenced in this press release is from the MusicWatch Annual Music Study, which was released in April 2015. MusicWatch surveyed 5,000 U.S. consumers, age 13 and older; results were projected to the U.S. population.

 

About Monmouth University

Monmouth University is a leading private institution that offers a comprehensive array of undergraduate and graduate degree programs. Located in West Long Branch, New Jersey, Monmouth University’s magnificent coastal campus is approximately one hour from both New York City and Philadelphia. Monmouth University is listed in U.S. News & World Report’s “Best Colleges,” Princeton Review’s “The Best 379 Colleges,” and Money Magazine’s “Best Colleges for YourMoney.” To learn more, visit www.monmouth.edu, or follow Monmouth University on Twitter @monmouthu.

About MusicWatch, Inc.

MusicWatch provides in-depth music consumer research and analyst services for the entertainment industry. With more than ten years of trended data and new research released quarterly, MusicWatch helps clients understand the latest market trends, consumer purchasing and listening habits, including music streaming services, broadcast and satellite radio, and music devices. For more information, visit www.musicwatchinc.com.