CMA Country Music Consumer Segmentation Study Results
Country Music Consumers Continue to Embrace Format, But Spend Less
The Country Music Association released key findings from its fourth quarter 2009 follow up to its original 2008 Country Music Consumer Segmentation Study during CRS-41 at the Nashville Convention Center. The extensive research project is the foundation of CMA's mission to be an educational resource for the music industry.
Over the past two years, CMA in partnership with The Right Brain Consulting LLC and Chicago-based Leo Burnett Company, has interviewed nearly 10,000 adults in an effort to provide the industry with sweeping fan understanding to help drive industry vitality in challenging economic times.
"As company budgets for research are reduced, or eliminated, it is more important than ever that CMA assumes a leadership role by providing this timely and in-depth look at our consumer as a benefit to our stakeholders," said Steve Moore, Chairman of the CMA Board of Directors. "As an industry, we can't ignore the facts in front of us. Information is critical to the decision making process for any business."
Overall, the impact of the U.S. economic downturn is impossible to ignore. The Country Music industry is facing revenue pressure from a range of consumer-based fronts including the economy, a decline in the Country fan base, reduced consumer Country Music spending, and a continued move away from buying full albums to single songs or acquiring "free" music.
Fans dipped slightly in 2009 from 2008: 37 percent vs. 39 percent of Adults 18-54, including a drop in the size of the lucrative CountryPhiles and MusicPhiles segments.
These two segments account for the bulk of Country Music category spending. Their share has dropped from 70 percent in 2008 to 55 percent in 2009. As a result, total Country fan spending on CDs, legal music downloads, and concerts declined an estimated 28 percent since 2008.
At the same time, there is positive momentum in fans' attitudes toward the Country genre with increased engagement in free pipelines including radio and the Web. Consumers' overall attraction to Country Music is due to the music's personal relevance and uplifting nature in good times, and bad.
Two in five fans feel better about Country Music than they did in 2008. Country's unique characteristics and connection to "real life" make it appealing in challenging times. And they are more optimistic about their own economic future. Twenty-eight percent of fans now rate their personal finances as "Excellent/Very Good" vs. just 7 percent in 2008.
The Country fan is still an attractive consumer segment for potential sponsors. Income levels are in line with average American adults, with strong gains in those who are college-educated (64 percent vs. 34 percent in 2008).
The role of Country radio has been strengthened by the challenged economy. Usage and average hours spent listening are up significantly. Not surprisingly, the study identified radio, along with word-of-mouth from friends and family, as the No. 1 influencer in fans' music taste and behavior.
Monthly Country Music radio listening is up from 79 percent of fans in 2008 to 93 percent today. Weekly Country radio listening hours are up to an estimated 9.9 hours per fan from 6.4 in 2008.
With Americans economically stressed and working harder to make ends meet, radio is potentially a strong performer due to its portable, free, and "workplace-acceptable" nature, which allows fans to take it wherever they go.
Fan responses did indicate a strong desire for radio improvements that testing shows would strengthen the fiscal health of the Country Music industry. There is consistent feedback from year-to-year with one third of the fans tested saying that they would listen to Country Music radio more if there was less repetition and a wider variety of songs.
New product concept testing among the prime Country fan segments showed strong industry-building potential of "deep cuts" radio programming. Thirty-seven percent of these fans rated such a "go deep" idea "Extremely Relevant/Relevant." The consensus was that playing a wider, deeper variety of cuts by an artist would influence genre investment, with 44 percent of fans saying it would increase the likelihood that they would by more CDs.
Country fans are adopting new media and technology at a brisk pace. An estimated 18 percent of Country Music radio listening is via online streaming, podcasts, or cable TV "radio." Nearly one in four visit Country radio station Websites on a monthly basis.
Fully 78 percent of Country fans now have home Internet access and 61 percent of fans go online monthly to explore Country content. Access for CountryPhiles is up from 48 percent in 2008 to 60 percent in 2009. And four out of five of those CountryPhiles without home access go online at another location, including at work or through friends and family.
YouTube has become the dominant Web destination for Country content, with 40 percent of online fans visiting monthly. This is likely the primary destination for viewing music videos. While the Web is increasingly important, the frequency of fan Web engagement with Country content should not be overestimated.
Only four online destinations attract one in four Country fans in an average month - YouTube, iTunes, Country artist/band Websites (as an aggregate), Country radio station sites (as an aggregate). Only YouTube and Pandora achieve weekly visitation by more than one in 10 fans (all other measured destinations are 10 percent or less). Social networking sites are growing as Country content destinations, but still visited monthly by only a minority of fans: Facebook (20 percent), MySpace (18 percent), and Twitter (10 percent).
By comparison, 93 percent listen to Country radio, 55 percent watch CMT, and 25 percent watch GAC monthly.
Key retailers and e-tailers - such as Walmart, iTunes, Target, etc. - are becoming more important. With fewer brick and mortar retailers carrying CDs and physical product, Walmart's domination and Target's No. 2 status is solidifying. Walmart was the source for 48 percent of fans' last CD purchases (up from 44 percent in 2008) and Target was up to 16 percent from 12 percent in 2008.
iTunes accounted for 72 percent of last Country Music downloads, up from 56 percent in 2008. Amazon.com, Walmart.com, and all other sources showed relative declines of 28 to 46 percent as last purchase source. Nearly half of last "free" downloads were acquired through legal methods including free from iTunes, company promotions, or artist Websites.
Building industry partnerships with these key purchase pipelines appears to be vital to ensure the future health of consumer spending.
The Country Music fan landscape is a combination of change, challenge, and a glimmer of cheer:
* The change is the continued shift from paid to free engagement and consolidation in retail pipelines.
* The challenge is the economy, the downsizing of the Country fan base, with fewer lucrative Core fans, fewer units purchased, and a desire for more variety at radio.
* The glimmer of cheer? An attractive fan demographic, positive genre attitudes, higher fan purchase penetration, growing fan Web access, and Country radio as the No. 1 source and influencer.
The full two-year research initiative is the largest and most comprehensive study in the 50-plus-year history of the Country Music Association. 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.
The study began in the summer of 2008, with the CMA Country Music Fan Discovery and BrandProspect Segmentation. The results were culled from a phase one sample of nearly 7,500 individuals; a second callback sample of 1,850; and 10 focus groups from three regions of the country including Charlotte, Chicago, and Phoenix.
In November 2008 a follow up study focused on the economy and Internet connectivity was conducted to determine the impact of the growing economic crisis on the fan base. A quantitative online and telephone survey was conducted among 542 Country Music fans ages 18-54.
In 2009, CMA Prime Prospect Study was fielded in May with a quantitative online and telephone survey among 712 Country fans ages 18-54 in the four most lucrative fan segments identified as CountryPhiles, MusicPhiles, Today's Traditional, and Pop Country consumers.
In November 2009, the current CMA Country Music Fan Tracking Study took place with quantitative online and telephone survey among 1,087 Country Music fans age 18-54.
"The project is the most far-reaching and comprehensive study of the Country Music consumer ever undertaken by the industry," Moore said. "The large sample of nearly 10,000 consumers gives the study statistical reliability and provides a foundation for industry dialogue as we prepare for the future."
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 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. MusicPhiles are extremely hip, high tech, engaged music lovers who happen to include Country Music in the mix. The MusicPhiles are "music ambassadors" who spend as much or more on buying Country Music CDs for others as for themselves.
Today's Traditional and Pop Country consumers are the CountryPhiles and MusicPhiles in training. They have a fair amount of engagement with the format, but aren't spending money. With that in mind, it is important to maximize and grow the potential spending of these two groups.
From the beginning of the study, CMA sought to establish a Consumer Definition as a baseline for current and future study. "With this information, we have a platform for continued growth and an opportunity to layer in additional studies as questions arise and our fans continue to evolve," Moore said. "It is our responsibility as the trade association for the format to respond to changes in the marketplace by providing fact-based information to support industry growth."