Nielsen’s “Music 360” report: Digging in with David Bakula

Thursday, November 14, 2013 - 1:10pm

Nielsen released its annual Music 360 survey report this week. Two of the headline points are that radio is the dominant music-discovery medium, and that teens listen to music in YouTube more than any other source.

RAIN spoke to David Bakula, SVP of Analytics and Client Development at Nielsen, about radio, YouTube, streaming service, and music consumption.

RAIN: When it comes to recommendation, discovery, and perceived value, it seems like radio and YouTube are the two touchstones of the Music 360 report. That’s interesting, as it seem to juxtapose analog vs. digital, old tech vs. new tech.

DB: There is quite a dichotomy. Terrestrial radio has been a trusted medium for years. YouTube has become, for certain demographics: “The minute I want to hear something, that’s where I go.” It’s different from asking radio “Tell me what’s popular, and give me something I don’t know.”

Twenty-nine percent [of respondents] report using YouTube the way they would want radio to be. On-demand, this is what they want to listen to now. That’s almost a third of people -- amazing.

People still feel that radio understands them, and still is on the cutting edge of what’s new. It is the greatest discovery tool out there.

Then there is on-demand as consumption. Radio is still a major driver of consumption, and drives a lot of YouTube consumption. There is a type of YouTube content, like Gangnam style videos, where YouTube is a visual medium. They lose impact when you only hear them, and don’t see them. There’s always going to be a way in which YouTube has an advantage, because of the video component.

RAIN: Interesting point, that radio drives YouTube consumption. In addition to the reason you’ve mentioned, YouTube also offers secondary products, like studio outtakes or live performances.

DB: Right. It’s a slightly higher level of engagement. There’s a lot of specialty content. There is also the social aspect -- the ease of sharing a YouTube video. There is not the same level of engagement around sharing a love for a radio station.

One of the things we look at in the 360 is: not only how are people consuming music, but when are they doing so. Car audio is a popular [venue] to look at. YouTube is never going to get there. YouTube premium [a new subscription music service reportedly in development] might become more of a background thing, where you listen to a playlist. Video is the money shot for YouTube. That video is never going to permeate the car audio experience. Exercising is another example -- you’re not going to watch video while jogging. But you do want to listen to music.

RAIN: The Music 360 report is a snapshot. Are there any trends to note?

DB: Some of the questions change from year to year. We do see growth in streaming. The year-over-year growth in the number of consumers who reported streaming was 40 percent. Certainly the trend is up. We track all kinds of streaming -- 2.2-billion streams per week.

RAIN: Are subscription services included, as well as Internet radio platforms like Pandora?

DB: Yes, [the study] includes questions about all the streaming services. We measure streaming as a whole, and also behavior within individual services. Now, this survey was conducted in August. Sometime around December we’re going to have YouTube premium rolling out, and nobody knows what that’s going to look like. That’ll be an interesting shift next year, to see how many YouTube users switched to premium.

With Arbitron in the house, I think you’ll see that we do more frequent consumer research around radio, around listening, The 360 report is meant to be an annual snapshot. That’s a good time frame to look at. But this is an industry that changes quickly and dramatically . By Q1 next year we might have YouTube premium, Beats Music, who knows what Deezer’s plans are -- potentially dramatic shifts. Look at how much the landscape changed since Spotify launched a couple of years ago.

RAIN: It has become a crowded field, jammed with platforms and brands with indistinguishable feature sets.

DB: Absolutely. In the music business we get a little lost by in how much we talk about these things internally, making differences bigger than they actually are for consumers. There was a lot of excitement when Spotify launched [in the U.S.], but actually it wasn’t that much different from Rhapsody, Rdio, and MOG.

The expectations for Spotify were that it was a cool service and probably would do well. It became like a club where the cool kids were. It was a little like the Facebook launch, where you had to be in a certain subset of the population just to get in. Spotify actually changed the culture, and started to get streaming on the map. The general public started to be aware that streaming services were out there. Certainly Pandora was making inroads. But this was more about on-demand streaming.

RAIN: Perhaps one of the reasons Spotify had such an impact is that ad-supported listening provided an easy on-ramp for first-time user to discover the value proposition of subscription music.

DB: We’ve learned during the last few years that when Spotify came in, took hold, and started to grow, the other streaming services were growing along with it. It wasn’t that people using other services left those services. Spotify grew everything as streaming became a more common thing for the general consumer. It’s more common for consumers to say, ‘This is the way I’m going to consume my music.’

RAIN: Your report indicates that consumers are still buying music, either as CDs or downloads. But there have been decreases, especially in older demographics.

DB: There are many consumers who report being able to spend more money on music than they actually do. It has to be put in a format that they want to consume. If we do that, people are willing to spend money on it.

Nielsen moves toward online listening measurements

Thursday, October 17, 2013 - 12:40pm

In the first methodology change after the acquisition of Arbitron, and its rebranding as Nielsen Audio, Nielsen has announced it will include radio online reruns in its ratings, according to Inside Radio and Audio4cast.

The decision is an inching movement toward measuring webcasts, and will be applied to a specific programming scenario -- when a station provides complete rerun loops online, as is the case with some morning shows. The online component must be unaltered, and include all content and commercials. The measurement will not stand alone, but will be bundled into the broader ratings picture

A 24-hour window applies: listeners who access the online repeat after that period will not be counted. This windowing limitation shares the same principle as Nielsen’s “Same Day” measurement of television viewing on DVRs -- in that measurement the 24-hour viewing day starts at 3:00am. The new radio-stream measurement applies to a different time-shifting opportunity for listeners that doesn’t involve home recording of the content.

Jennifer Lane of Audio4cast notes: “I’m sure this is the first of many changes that Nielsen will make to its measurement of audio.”

Nielsen/Arbitron merger puts cross-platform data on the horizon

Monday, September 23, 2013 - 12:20pm

Selling inventory across properties and platforms is historically difficult, plagued by confusion for the buyer and heavy educational lift for the seller. Part of the challenge lies in reconciling different measurement methods. When media planners must grapple with opportunities defined partly by siloed data formats, buying naturally falls within those silos.

One potential in the Nielsen acquisition of Arbitron, approved on Friday and expected to close next Monday, is the creation of cross-platform measurement standards that will smooth over the knowledge gaps between radio, streaming, and television consumption. Ideally, agencies seeking demographic or other audience categories would view an integrated usage landscape and position their brands with greater intelligence and efficiency. On the content side, seats might be more equitably positioned around the table, given a smarter and more integrated view of audience proportions. As Tom Taylor remarked, to many stakeholders a utopian integrated market "is so close they can taste it."

The Nielsen/Arbitron merger was agreed upon in principle in April, as a $48-per-share grab worth $1.6B. Friday’s FTC approval hinges on remedies designed to solve potential competitive strangulation.

The agency’s concern is that, in eliminating competition between the two data giants, and creating a cross-platform behemoth, clients would pay more for consolidated measurement than they did when dealing with separate entities. Further, a discouraging Goliath-vs.-upstarts scenario looms large in the FTC’s consideration of this merger.

The solution requires Nielsen to provide intellectual assets and technical assistance to an FTC-approved third party -- a remedy that does more than just allow competition; it fosters it. The remedy essentially creates and nurtures a startup cross-platform competitor. (FTC PR here. Full statement here.)

The technology in question is Arbitron's Portable People Meter (PPM), currently in use by ESPN and comScore. The FTC mandate requires that licensing arrangement and product support to continue for eight years. Nielsen also clarified in this morning's conference call its obligation to license and support the PPM platform for other emerging companies.

Speaking of competition, the FTC commissioners are not speaking with a unified voice in this case. Commissioner Joshua Wright disputes the remedy, and asserts that the merger should transpire sans the competition remedies. Wright’s headline quote: “In fact, there is no commercially available national syndicated cross-platform audience measurement service today. The Commission thus challenges the proposed transaction based upon what must be acknowledged as a novel theory—that is, that the merger will substantially lessen competition in a market that does not today exist.” (FTC dissenting view here.)

Commissioner Wright’s argument aside, the FTC remedy is not inconveniencing Nielsen CEO David Calhoun’s buoyant reception of the acquisition conditions. The Nielsen chief’s public statement calls the FTC package a “highly acceptable outcome.”

Nielsen's planned integrated media platform may drive ad volume for webcasters

Wednesday, December 19, 2012 - 1:15pm

Nielsen president of global media products Steve Hasker told Bloomberg that among Nielsen's intentions in acquiring Arbitron is to begin measuring online radio services like Pandora.

Bloomberg writes Nielsen "wants to offer its advertisers a unified system that measures audiences across multiple forms of media, making it easier for them to make ad-buying decisions -- whether on TV, radio or the Web."

StreetInsider credited the news for a Pandora stock price bump after speaking to analyst Rich Tullo. Tullo thinks the webcaster could likely profit from rising ad volume as large media buying agencies adopt this new Nielsen integrated media platform.

Arbitron's history with webcasting, and Pandora in particular, hasn't been entirely smooth. Since the dawn of Internet radio, Arbitron has repeatedly entered, then exited, net radio audience measurement. Pandora last year (with Edison Research, here) began releasing its own listening stats, using Arbitron's common broadcast radio metrics (Pandora is also measured by Triton Digital's Webcast Metrics, using Internet radio's slightly different metrics). Arbitron (more in RAIN here) and many of its broadcast clients (from Inside Radio via NPR Digital Services here) criticized the stats, calling them unreliable and nonsensical.

Arbitron meanwhile has long had ready -- but never released -- a cross-platform radio ratings service (more here), and as recently as its Q3 conference call told shareholders the service "would use online logs to measure Internet radio listenership and include all types of Web radio, from terrestrial stations' streams to services such as Pandora" (more here). Presumably for this service, Arbitron partnered with AdsWizz (here). It's been suspected that pressure from its broadcast radio clients, who likely wouldn't welcome competition from webcasters and broadcasters around the world, has prevented Arbitron from launching the service. 

But it may not be too late for Arbitron to get back into the Internet radio ratings game. Pandodaily's Erin Griffith wrote yesterday, "It’s a market that’s still young enough to be figuring things out. With a new owner and possibly new attitude, Arbitron could be there on the ground floor."

Read Bloomberg here. Read here. Read Pandodaily here. H/T to The Verge here.

Nielsen buying Arbitron, also creating Twitter TV rating. Taylor asks, "How about for radio?"

Tuesday, December 18, 2012 - 1:30pm

Nielsen and Twitter have forged a deal to create the "Nielsen Twitter TV ratings" to measure the total audience for social TV activity on the social media platform. Couple that with today's news that Nielsen is buying radio ratings leader Arbitron, and smart folks like Tom Taylor begin to ask, "Can radio be far behind?"

There's no real indication of such a development yet, but it's not hard to imageine that "a new radio morning show could be 'trending,' one of these days," suggests Taylor. Read more from him today here.

Read about Twitter TV ratings at LostRemote here and GigaOm here.

If a U.S. teen has a mobile device, chances are it's a smartphone

Wednesday, September 12, 2012 - 11:40am

According to Nielsen research, as of July, 74% of 25-34 year old mobile customers now own smartphones, a surge from last year's 59% for that group.

However, the most dramatic increase of smartphone penetration was among teenage (13-17) mobile customers, with the majority (58%) now owning a smartphone. That figure was just 36% a year ago.

"Among most age groups smartphones represent the majority of U.S. mobile subscribers, but American teens were the age group adopting smartphones the fastest," said Nielsen analyst Nichole Henderson in a press release. "As teens increase in their share of smartphone owners, mobile carriers and manufacturers should consider how to market to this growing group."

Overall, 55.5% of U.S. mobile subscribers own smartphones, up from 41% a year previous.

The graph, and press release, are from Nielsen, here.

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