Blighty’s Media Habits… Or Should That Be Foibles? 14/08/2008
Your favourite media regulator and mine, Ofcom, issued its latest report on good old Blighty’s media habits this month with the following things being unceremoniously and unsurprisingly revealed (thanks to the brilliant Five Eight for the summary):
– Album sales fell by 20M units to 138M in 2007
– Single sales (driven by digital) rose by 18M units to 86M in 2007
– The total value of the music sales market fell by 15% over the year to £943M
– Digital sales grew by 21% over the same period to £81M
– Two-thirds of music downloads were to a computer (with the rest to mobile)
– 52% of 15-24-year-olds download music files, movies or video clips but only 17% of over-65s do
– 6.0M people in May this year listened to a Podcast (up 40% from a year ago). Some 3.7M listen to Podcasts every week
– 57% of respondents claimed to have accessed unauthorised music in 2007 (up 16% from 2006)
– 20% of people aged 18-24 in 2007 claim to stream, download or copy unauthorised music
– 40% of people have access to an MP3 player
– 48% of 12-15-year-olds play music on their mobiles
– 26% of people play CDs on their games consoles and 10% play MP3s on them
– 14.5M people listen to the radio online (up 21%)
– 7M homes have a DAB set (up 17%)
– There are now 74M mobile connections serving a population of 60M
So let’s go through these and see what they mean to us eh?
Album sales fell by 20M units to 138M in 2007 – the trend that’s been worrying the music industry for years now continues to worsen with a rather notable drop of twenty million. For those only semi aware of the music industry’s plight it’s the album sales that are the money spinners for the record labels – or at least they were but with the steady increase in live and merchandise revenues the industry is beginning to look elsewhere to make its cash. It took its time but labels are slowly starting to rely less on album sales (although it is still heavily weighted on them) and with figures like this you can see why.
Single sales (driven by digital) rose by 18M units to 86M in 2007 – unfortunately for the record companies it’s not as simple as the increase in single sales counteracting the fall in album sales for the rather obvious reason of price. Remember when you were 14 and you’d go down to Woolworth’s to buy your favourite generic pop artists latest single for £3.99? In retrospect that now seems utterly absurd to us spoilt consumers. Four quid for a single?! When I can buy it for 79p on iTunes or stream it for free on Imeem/We7/Muxtape?
Figures like this are leading entrepreneurial chaps like Guy Hands to suggest that single deals may be the way forward. Why commit countless bags of cash to a three album deal when they might flop after their third single? Suggestions of signing artists for a number of singles with a first refusal* option for an album (*the company who releases the singles gets the option to release an album before anyone else) are becoming more regular and they have their pros and cons for the artist in question. They get the joy of not being tied down for too long so they can pursue other options but they don’t get the security of the potential cash that stereotypically comes along with a few album deal.
The total value of the music sales market fell by 15% over the year to £943M – this pretty much sums it all up really doesn’t it? The underlying theme from all music industry analysists around; look into monetising other areas. And god bless them they’re trying; with new models being announced on a near weekly basis, just which one is going to stick?
Digital sales grew by 21% over the same period to £81M – again, no real surprises here although they still have a long way to go to make up the loss of tangible sales.
Two-thirds of music downloads were to a computer (with the rest to mobile) – this figure surprised me somewhat, I felt that the UK market wasn’t embracing mobile downloads to the extent it apparently is. This figure may have somewhat to do with the introduction of the iPhone in the past year and I still believe that this figure is going to rise significantly in the coming years. Taking Japan as an example; the market is pretty much the reverse there with the majority of downloads going straight to mobiles rather than computers due to a mixture of superior technology and, I’m informed, a ‘cash culture’ where credit cards are not as common as they are in the UK. The mobile phone market has a huge potential for growth and it will be interesting to see if anyone can monopolise it in the way that iTunes have done the MP3 store.
52% of 15-24-year-olds download music files, movies or video clips but only 17% of over-65s do – another finding of this report that surprised me. I expected the 15-24 percentage to be higher and the over 65’s to be lower. I’ve racked my brain and I genuinely don’t think I personally know anyone over 65 who will have downloaded content from the internet. Maybe it’s a Sheffield thing. I’d assume the amazing BBC iPlayer will have something to do with this figure and it’d be interesting to discover what these percentages were in previous studies. I’d assume they’ve both risen but to what extent? Is there a market for MP3 sales that heritage acts aren’t fully utilising? Is my Nan secretly longing to own Tony Christie’s back catalogue on her very own pink iPod Nano?
6.0M people in May this year listened to a Podcast (up 40% from a year ago). Some 3.7M listen to Podcasts every week – this is higher than I expected due to the lack of podcast listeners in my close circle of friends. I’m a big fan of Podcasts and I’m constantly telling others who have similar tastes as me to go listen to Adam and Joe or Jon Richardson. Again, is the BBC iPlayer responsible for some of this 40% increase? In the iTunes top twenty podcasts, nine of them are from the BBC; ranging from crass Moyles to BBC World documentaries (which my nan likes actually… ah! The penny drops!). with this massive increase is there potential to monetise podcast and open them up as a revenue stream? The rather knowledgeable Jonathan Deamer wrote a paper on this and he concludes that it’s possible and suggests that product placement would be the most likely format. Interesting stuff.
57% of respondents claimed to have accessed unauthorised music in 2007 (up 16% from 2006) – a problem that the industry is hoping will be solved by the new ISP initiative. Results are yet to be seen but I remain sceptical towards the whole idea. Also, I’m not entirely sure what that means; ‘accessed unauthorised music’. They’ve gone to a place where they could have taken it but had a last minute surge of consciousness and decided against it?
20% of people aged 18-24 in 2007 claim to stream, download or copy unauthorised music – I feel this figure would be somewhat higher if the youth of this country were 100% honest in their Ofcom survey completions (I remember being sent a survey by the DVLA about 6 months after I’d passed my test where they asked me all sorts of questions of the ‘have you committed any driving offences’ ilk and although they assured me it was anonymous I still lied through my teeth; “have I driven over 70 miles an hour on a motorway? Of course not! A constant 63mph is all you need officer!”). I believed this figure would be higher as I know a fair few people who do this, ranging from all their music being illegal to the odd one or two rarer tracks being sneakily acquired. Piracy isn’t going to die out; look at this article about the last Radiohead album. Even though fans could have gotten it legally for free they still went to P2P sites instead. It’s simply a case of damage limitation rather than all out solution.
40% of people have access to an MP3 player – it can only be a matter of years until this figure near enough doubles. Both my parents have their own MP3 player now and they’re much happier people for it. Everyone should have one; give them out with flu shots and contraception, fully loaded with chirpy music to stop youths from stabbing each other in the neck. Imagine how much happier the world would be if everyone had an MP3 player with ‘Shiny Happy People’ by REM pre-loaded into it?
48% of 12-15-year-olds play music on their mobiles – interesting figure, especially for the age range. I would imagine the majority of this music has been transferred to their device for ‘look-how-cool-I-am’ ring tones rather than purchased from some youth exploiting realtone seller that advertise 26 hours a day on various obscure music channels. This should yet again show majors that there is a demand for music on mobile and when these 12-15 year olds become old enough to take out a phone contract then it’ll become a hugely lucrative market.
26% of people play CDs on their games consoles and 10% play MP3s on them – the phenomenal success of Rock Band and Guitar Hero has shown that the gaming industry could be a potential saviour for the music industry with a huge amount of in game sales being made within all formats. This figure (referring to console users actually uploading MP3’s onto their units hard drive and then listening to the songs whilst playing a game) shows intent of future music buyers potentially wanting an MP3 store available via their Xbox’s or PS3’s.
14.5M people listen to the radio online (up 21%) – the magic words BBC iPlayer come to mind again with this fact. I haven’t personally listen to a traditional radio for a long time now as I consume most of my radio via the internet or freeview. Online radio opens up another income stream through visual advertising which otherwise would be unavailable through traditional methods, albeit a rather passive one. It can also increase sales and traffic to an artists website as if I hear something I like I’ll instantly go and Google it to find out more information. See; not all change is bad.
7M homes have a DAB set (up 17%) – I’m a big fan of DAB radio (and radio in general in fact) and I can imagine this figure rising steadily in the future.
There are now 74M mobile connections serving a population of 60M – and none of them want to buy CD’s anymore apparently. Marvellous.
So in summary? Nothing amazingly surprising but for me the big markets to look out for once the demand for CD albums becomes well and truly defunct are the mobile and gaming industry. Even I, a well known Apple product shunner, had a dream last night where I owned an iPhone (please note that was not the sole purpose of the dream, other, more interesting things were happening as well).
What I’m listening to this week: Paddy Orange and The Veronica’s
What I’m reading this week: Keith Jopling’s predicitions