NPD Group

RAIN Summit West recap: NPD Group research

Wednesday, May 15, 2013 - 11:55am

NPD Group SVP/Industry Analysis Russ Crupnick sees the music industry headed towards another cliff -- and thinks streaming audio and capturing the favor of the 100 million "casual music fans" may be the keys to averting it. Crupnick presented recent research findings at RAIN Summit West last month in Las Vegas. 

"We desperately need streaming radio to succeed," Crupnick told attendees. "We need to get the lawyers, guns, and money out of the way, and start having a better understanding of how to get consumers on to the next model."

Back in the '90s, 90% of adult Americans regularly bought CDs. NPD research shows it's now 35%, and that's not being replaced by paid downloads. Just about 23% of people have purchased a music download in the last year, which means 3 of 4 haven't! And, as much as CD purchasing has dwindled, it's still more prevalent than downloading! And the amount of time people spend listening to these legacy formats (CDs, MP3 files, and even radio a bit) is down too.

Here's the bright spot: online radio usage is up 6% among young people (see the chart) -- and up 23% among baby boomers -- in the past year. Online radio is even the "way number-one" reason people are quitting P2P downloading: "It's just so much easier to use a streaming service," Crupnick paraphrased.

And, Crupnick adds, "these are really valuable customers" to the music industry. While the average American spends $24 on music in a year, Pandora listeners spend $40, and Spotify users $52. Streaming audio listeners also strongly out-index average Americans buying concert tickets.

But the real opportunity for streaming radio to succeed, and the music industry to avoid another cliff, Crupnick argues, is not going after the "core" music fans (the 30% of the population that accounts for 80% of the money spent on music). Radio and streaming services are already "serving them really well." The opportunity lies with attracting the other 70% of people -- the "casual" music fan.

Consider: Nearly all "core" music fans listen to AM/FM, and 77% listen to non-subscription online radio, according to NPD figures. And while a good majority of casual fans also listen to music on AM/FM (74%), just 25% listen to free online radio. That's the 100 million people market opportunity. That's the potential audience gain for Internet radio, if it can reach beyond the hard core music fans and get to everyone else who listens to AM/FM.

And to do that, Crupnick advises, it's necessary to understand the mentality of that casual listener. He stresses that the research shows these people aren't at all focused on those things broadcasters and webcasters obssess over. NPD found, as he put it, "98% of people don't know what 'an Rdio' or MOG is!" Most casual listeners don't really have any interest at all in mobile apps (though he suggested an Apple streaming radio entrance might change the game).

The lack of interest in mobile apps notwithstanding, Crupnick says "this battle is going to be won in the car," as that's where the vast majority of casual music fans' listening takes place.

And casual listeners aren't interested in subscribing for music either. "We've gotta figure out a way to help these services thrive outside of subscription," he concluded. "We can work together, labels, artists, services, to grow the pie."

RAIN Summit West was April 7 in Las Vegas. You can listen to audio from Crupnick's presentation, and all the RAIN Summit West content, on our website. Look for the SoundCloud links in the right-hand margin of

Our next event is RAIN Summit Europe, May 23 at the Hotel Bloom in Brussels. Limited space is still available. Information and registration links are available on the RAIN Summit Europe website here.

Web radio "fastest growing music listening option," says NPD Group

Tuesday, April 3, 2012 - 12:05pm

NPD GroupOnline radio services reached 43% of U.S. web users in 2011, according to research from The NPD Group. The market research company says that's up 9% -- or 18 million users -- from 2010. NPD says that makes Internet radio "the fastest growing music listening option." Meanwhile, AM/FM radio usage stood at 84% ("relatively steady," said NPD). 

The NPD Group found that web radio is most popular among web users age 18-25. Additionally, NPD found that just 3% of web users listened to paid Internet radio during the year. 

Listeners of Internet radio cite such serviecs "as a reason to do less file sharing, and they credit online radio with improving their ability to discover new artists," said NPD Group SVP Russ Crupnick.

You can find The NPD Group's press release here.

It's not clear if those 43% of U.S. web users are regular Internet radio listeners, or tuned in just once or twice during the year. Additionally, though The NPD Group says 12% of web users "listened to music integrated into Facebook or other social networks by services like Spotify and MOG," it's not clear if listening to Spotify and similar on-demand music services is included in the 43% figure. -- MS

NPD Group: Far from hurting music sales, online radio cited as reason for growth

Tuesday, March 6, 2012 - 11:55am

Music sales increasingAfter years of decline, more consumers are buying music, in part thanks to online music services. So says the NPD Group in its "Annual Music Study."

The NPD Group found that in 2011, for the second consective year, the total number of music buyers increased (up 2% to 78 million). Plus, total music-track sales rose 4% thanks to "a healthy paid-music download market."

Consumers surveyed by the NPD Group pointed to the wide variety of music services now available -- from AM/FM to Pandora and Spotify -- as a driving factor behind increased music spending. Mobile devices, a decline in P2P downloads and the perception of improved quality also were cited as reasons for growth. 

The report makes the (oft-made) point that the profileration of online radio and web music services hasn't replaced the need to buy and own music. In fact, as stated, it may help drive more music sales.

The NPD Group"Despite all of the exciting online radio options, we are still seeing healthy growth in the market for digital-music downloads," said Russ Crupnick, a SVP at NPD. "As long as consumers want to own digital tracks and continue to have a passion for the physical format and a way to play their CDs, online radio and paid-to-own music will live in harmony." 

All Things Digital's Peter Kafka comments (here) that it's "a little counterintuitive" that music purchases would increase in the face of growing free streaming options.

"But that’s always been part of the streaming music service pitch to the big labels... We’re starting to hear murmurs from the labels that this is actually how it’s working in the real world, too."

You can find The NPD Group's press release here.

In-car smartphone listening growing as AM/FM, CD declines

Thursday, October 20, 2011 - 9:00am

Listening to an iPhone in the carNearly a third (29%) of respondents said they listened to music from a smartphone or "smart device" (like an iPod Touch) in the car, according to a new study by the NPD Group. That's up 9% from last year.

Meanwhile, 80% said the listen to AM/FM in cars and 53% listen to CDs. But those behaviors have declined 2% and 4% from last year, respectively.

The time people spent listening to smartphones in cars grew 9% from last year (reaching 3.5 hours per week). Time spent listening to AM/FM and CDs is down around 9%.

"Smart devices streaming music could end up being the largest threat to CDs and broadcast radio since the dawn of digital music," said NPD Group's SVP Russ Crupnick.

"A tipping point is approaching when vehicles and portable devices move from a tethered connection to a more integrated one."

You can find the NPD Group's press release here.

iOS app purchases up over last year, study finds

Tuesday, October 4, 2011 - 12:30pm

Of users who bought content via iTunes, 39% purchased apps for iPhones, iPod Touches or iPads, according to NPD's iTunes User Report 2011. That's up from 31% last year and compares to 75% of users who purchased music from iTunes. Bizmology has more coverage here.


Wednesday, June 1, 2011 - 12:00pm

Nearly 40% of respondents age 18-54 said they listen to Internet radio on a mobile device, according to a new survey of over 1,000 people by Audio Graphics and Borrell Associates. That’s up from 22% in December 2009.

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