CMA Releases Major Consumer Research Segmentation Study
Largest Study in the 50-Year History of the Association Profiles Country Consumer
The Country Music Association released key findings from its 2008 Country Music Consumer Segmentation Study during CRS-40 at the Nashville Convention Center. The extensive research project is the foundation of CMA's mission to be a repository for information useful to the music industry, while providing timely education for its members.
"During these challenging economic times, it is more important than ever that we provide value for our members and we encourage them to turn to us as a resource for information about our consumers that they could never afford to collect on their own," said Tammy Genovese, CMA Chief Executive Officer.
"The project is perhaps the most far-reaching and comprehensive study of Country Music consumer attitudes and behavior ever undertaken," said Brian Philips, President of CMT and a member of CMA's Board of Directors. "The broad sample of more than 7000 consumers gives it statistical reliability we haven't seen before. A terrific starting point as the CMA prepares the blueprint for our future."
The study was created to define the Country Music consumer: to identify their behaviors and tastes, to closely examine what motivates them to invest in the artists and music. Once identified, the "Core," comprised of "CountryPhiles" and "MusicPhiles," needs to be nurtured and maximized, while the next group of consumers is developed and groomed.
With consumer insight comes potential industry revenue as CMA strives to identify and define the Country consumer and better understand their behavior and what external forces influence them. The study was designed to examine different segments of fans who presently - and possibly in the future - provide financial support for the music industry.
The approach is three-fold:
1. Isolate, and if necessary, segment current core customers on relevant criteria
2. Among those remaining, segment on most relevant criteria to create various growth potential groups
3. Define and remove various groups of poor prospects
Approximately 2 in 5 American adults ages 18-54 (39.6 percent) qualify as "Country Music Fans," as defined by the study. These individuals further split into two major groups based on current and potential revenue contribution: a small group or "Core," who account for the vast majority of Country Music spending; and the larger group "Low-Funding" who engage heavily for free in the Country Music pipeline, but represent future revenue growth potential.
"The 'Low Funders' don't spend a lot of money, but they do spend a lot of time with Country Music," O'Brien explained.
For the most part, they are who you think they are. Demographically, The Core Country Music user is "a bit" more likely to be Caucasian and from smaller towns. They skew slightly female, but there is no significant age or income difference from non-Country Music users.
What does distinguish them from Poor Prospects is a blend of attitudes and behavior across three key dimensions: Affinity ("I like it"); Engagement ("I consume it for free'); and Revenue ("I buy it").
When it came to "Affinity," consistently across ages and genders, County Music and some form of rock music were the genres the subjects of the study would not want to live without. Country was favored because of the relevance to real life and universal truths; appropriateness for the family; buddies, BBQ, beer, dancing and fun; the outdoors; and its staying power and enduring appeal.
All genres can be mapped perceptually. In perceptual research, Country Music owned an area characterized by meaning and virtue. Rock on the other hand, is largely perceived as provocative and music-based. This helps explain why Country and rock were "can't live without" formats for the Country Music core.
A key learning from this data was that it was important to present new artists in a manner that illustrated their personal ties and commitment to the essence of the genre in order to connect with the people who buy the records and concert tickets in a very tangible and sincere way.
Both qualitative and quantitative revealed a clear hierarchy of engagement in Country Music across predominantly free media pipelines with radio at the top, followed by television, Internet, and print. With 79 percent of Country adopters listening to Country radio it is the pinnacle Country Music connection with an average of more than 24 hours spent listening each month.
They know what they like, and don't like. They like the "free" nature of the medium. They appreciate that it is family-friendly and acceptable for all ages. They like the mood enhancing, energizing quality of the music. And, in general, DJs are a plus.
But there are minuses, too, including radio's perceived repetitiveness and limited song list; the general lack of identifying the artists was a frustration; and the number of commercials led to channel surfing or switching to CD or iPod listening.
An aggregate 81 percent engage in one or more TV pipelines to find Country Music, but spend less time doing it - 13 hours a month versus 24 for Country radio. Popular choices include CMT (53 percent); the CMA Awards (48 percent); the ACM Awards (40 percent); GAC (27 percent); and "Nashville Star" (25 percent).
The Internet is reshaping the media habits of Country Music users and consumers with Web access. The key to online engagement is access - for those 71 percent of those who have it, the Internet becomes the central medium. Not surprisingly, younger Country Music enthusiasts are much more likely to have a digital Country Music engagement focus and will undoubtedly carry this tendency into their future years.
Like their interests, the dollar of the Country Music user is spread across a range of revenue sources. The largest percentage still purchase CDs (54 percent). Among Country consumers ages 18-54, 65 percent are "CD-dominant" and 35 percent are "Digital-dominant" based on total Country Music acquired. And once they become "Digital-dominant" Country Music acquirers, they contribute very little CD revenue.
Digital-dominants pay for less than half of the Country Music they acquire with far more unpaid acquisition via CD ripping versus illegal downloads. The percentage of Country Music volume paid for by Digital-dominants is 38 percent, compared to 67 percent for CD-dominant users.
Currently CD copying (piracy) is more prominent than illegal downloads. Thirty-eight percent have borrowed a Country CD to copy compared to 23 percent who have gotten free downloads.
"They look at copying CDs as 'sharing' not 'stealing'," O'Brien offered.
Overall, 1 in 4 Country Music supporters attended a Country concert in the past year, which translates to 11 percent of the US adult population ages 18-54. They see it as the "best way" to experience the music. They believe it deepens the artist/fan relationship. There is a strong interest in cross-genre concerts with Country and rock. On the negative side, they felt "ripped off" by the price of merchandise and they were frustrated by unknown or hidden fees that increased the cost of the concert-going experience.
So, who is not a fan? There are three types of "Poor Prospects" that account for 60.4 percent of the American adult population ages 18-54:
1. Disengaged Gift Givers (7.9 percent), who dislike Country Music, but sometimes give it as a gift to people who like it
2. Music Rejecters (34.5 percent), who are not engaged with music of any kind
3. Country Music Rejecters (18 percent), who are engaged with music, but dislike Country Music
"Don't waste valuable financial resources or time on this group," Foley said. "We encourage you to write off the 'Poor Prospects' because this group is the least likely to become Country Music consumers capable of generating future income for the industry."
The industry's "bread and butter" is the "Core." They are music lovers who drive extensive revenue and they can be divided into two groups: CountryPhiles and MusicPhiles.
CountryPhiles skew slightly female (54 percent) versus the average American adult, they are more likely to be married, Caucasian and from small towns. They are passionate fans of Country Music. They appreciate the core values of the format and the artists. And, their commitment translates to both significant engagement time and industry revenue.
"Protecting and more fully leveraging this group should be the Country Music industry's top priority, because even small erosion among this group has substantial negative revenue implications," Foley said. "The good news is that they are not entirely drained as a revenue stream and the study revealed opportunities to generate more engagement."
They engage with many Country Music portals, but less with digital. Only half have home Internet, but many access the Internet elsewhere - at work or away from home. There were three key reasons driving lack of home Internet access: the cost, they had no interest/or need, and their inexperience or content concerns. Fifty-eight percent of this group did claim that they want to have Internet connectivity in the near future.
This group accounts for a major proportion of total Country Music related media hours - especially with radio (33 percent). CountryPhiles claim Country radio as the No. 1 vehicle for introducing new Country Music.
They are very CD/album oriented and are willing to pay for music. More than half (55 percent) believe you really miss something when you only purchase songs rather than the whole CD by an artist. Fifty-six percent believe it is important to support the artists they love by paying for their music.
MusicPhiles skew male (55 percent) versus the average American adult, they are younger, more diverse (especially Hispanic) and more urban. They are extremely hip, high tech, engaged music lovers who happen to include Country Music in the mix.
"They like it, more than they love it," O'Brien said.
MusicPhiles are "music ambassadors" who spend as much or more on buying Country Music CDs for others as for themselves. Though heavily involved with all sorts of media, they are not as deeply engaged with Country radio, TV or Web. In contrast to the CountryPhiles, they are much more tech-savvy and digitally focused. They have large CD and digital libraries and their Country Music collections exceed those of CountryPhiles. While they spend less time with Country radio than CountryPhiles, they still cite it as their No. 1 source when it comes to discovering new music.
MusicPhiles and CountryPhiles collectively contribute a significant amount of money to the format, so it was important to look at the impact of current economic conditions on these two Core Country Music segments with additional research conducted in November.
Nearly 9 in 10 CountryPhiles have negative perceptions of the overall state of the economy and 6 in 10 express personal financial challenges. Versus total American adults, MusicPhiles are less intensely negative about the overall economy, and fewer (51 percent vs. 59 percent) express personal financial challenges.
More than half of CountryPhiles claim they are already spending less on Country Music as well as many other discretionary items.