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Declining Music Sales Aren't All Down to File - Sharing: Report
By Jon Newton, p2pnet.net
(more articles from this author)
2003-06-06
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Although more than half of lost music sales can be attributed to file sharing, the music industry and retailers need to look beyond file sharing for other important root causes of ongoing music sales declines - especially among mature music buyers.

That's the conclusion of a recent consumer-tracking survey from NPD MusicWatch, an info service from NPD Music that reports on what consumers buy, as well as where and why.

Consumers across all demographics are buying less music now than in the past two years, says the report. Total full-length CD sales were down 13% Q4 2002 compared to Q4 2001 and, "Already this year Q1 unit sales trended downward by 9 percent," says the NPD going on that while p2p accounts for more than 50% of lost music sales, 60% of music consumers with access to the Web "have not downloaded any music for free" and sales to those customers are off by as much as 7%.

"Without a doubt, file sharing has had huge negative impact on music industry sales," says Russ Crupnick, NPD Group vp. "But our research shows that even if digital file sharing were to disappear tomorrow, the record labels and retailers would still need to overcome important underlying causes of recent market declines."

While there are many root causes for lost sales, one important view is uncovered by looking deeper into the demographic segments of music buyers, says the NPD. "Research shows steeper sales declines among consumers aged 36 and over, than among younger demographic groups," it says. "Nearly half of these adult consumers report they are purchasing less music, because there's less music they're interested in buying. Plus, fewer than 10 percent of this age group report purchasing less music because of downloading.

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Crupnick says it's important to note that this group of 'mature consumers' represents 45% of all CD sales, "and near-term population growth trends should stand as a warning to the industry to reach out to older buyers, because the core teen and college market population is not expected to grow over the next five years".

"Often the older consumer is looking for deep catalog titles by artists like Paul McCartney, Bruce Springsteen, Santana and the Rolling Stones. But with growing consolidation within the retail market - and the rise of mass merchandisers in the place of failing independent music sellers - there's less chance the stores they shop will carry the types of music they're looking to buy."

When reviewing the needs of an older demographic segment, several possible prescriptions for dwindling sales present themselves, adds the NPD. Included are:

1. Focus on the revival of legacy artists - Recent music industry sales successes of CD compilations by older artists (e.g., The Beatles "One" and Pink Floyd "Echoes") illustrate that mature buyers will still purchase music when it fits their taste. "There remains a big opportunity for additional sales of legacy artists among older consumers," says Crupnick.

2. Create specialized sections for adult consumers - As consumers get older, they are less likely to be influenced by radio and more likely to be influenced by finding a record while browsing. In fact, just over a quarter of people age 35 or older report purchasing a CD after hearing a single on the radio, versus more than half of teens. Said Crupnick, "music merchandisers need to look at each segment of their consumer base separately and, when possible, cater to the way they shop. Point-of-purchase merchandising and sales incentives targeted toward older consumers might also help increase sales."

3. Leverage targeted marketing - Advertising influenced purchases of music among 12 percent of teens (age 13 to 17), but the same can be said for only 4 percent of music buyers over the age of 36. Said Crupnick, "Whether this finding implies that younger people are more susceptible to advertising than mature consumers can be debated; but it makes sense for record labels and retailers to revisit marketing and advertising plans, to reach the eyes and ears of older consumers."

Source: www.p2pnet.net

Related News from Mi2N:
» Declining Music Sales: It's Not All Digital Downloading, Says The NPD Group


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