breakthrough trends in the new music business conductor jay frank founder/ceo digsin players bryan...
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BREAKTHROUGH TRENDSIN THE NEW MUSIC BUSINESS
CONDUCTORJay Frank Founder/CEO DigSin
PLAYERSBryan Calhoun VP New Media & External Affairs, SoundexchangeRuss Crupnick SVP & Senior Industry Analyst, NPDJosh Friedlander VP Strategic Data Analysis, RIAAGregory Mead Co-Founder, MusicmetricChris Muratore VP Merchant Services and Emerging Growth, Nielsen EntertainmentAlex White Co-Founder/CEO, Next Big Sound
ALBUMS EARN LESSSONGS EARN MORE
Adele “Rolling In The Deep” sold over 11 Million units in 2011, the most of any single song in the Soundscan era
New distribution geared towards revenues of singles (YouTube/Vevo, Subscription, Licensing, etc.)
Singles Take Longer To Break
• CARLY RAE JEPSEN– Released September ‘11, Peak June ’12
• GOTYE– Released July ‘11, Peak May ‘12
• FUN– Released September ‘11, Peak March ’12
• ONE DIRECTION– Released August ‘11, Peak April ’12
• FOSTER THE PEOPLE– Released February ‘10, Peak August ‘11
Industry Shift – Half of Revenues Digital in 2011
1%
50%
99%
50%
0%
20%
40%
60%
80%
100%
2004 2005 2006 2007 2008 2009 2010 2011
Physical
Digital
Source: RIAA
Source: RIAA
Source: RIAA
2011TRANSACTION &
PERFORMANCE
TOTALSOverall Music Consumption is at an All-Time High!
Nielsen will capture more than30 BILLION
Streams & Transactions in 2012
Music Streaming & Download Activity• Through the first 5+ months of 2012, Nielsen has capture more than 14.1Billion audio and video streams and 622 million digital track downloads.
(Note: video streams is missing a large portion of YouTube activity)
• When looking at the 14.1Billion total streams Nielsen has captured so far in 2012, more than 11.2 Billion are audio streams through services like Spotify, Slacker, Rhapsody, Cricket, Rdio and MOG.
• Since November of 2011, weekly streaming activity has gone from 400 million per week to 660 million per week in the most current week. • After an 8% growth year in 2011, digital track sales in 2012 are up 6% so far in 2012.
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0120
100
200
300
400
500
600
700 Total Streams Audio Streams Digital Track Sales
-Projected track sales for year end 2012 is 1,350,000,000 – record year.- Streaming activity will increase by more than 33% in 2012.
Mill
ions
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2012 Proj
- 200,000,000 400,000,000 600,000,000 800,000,000 1,000,000,000 1,200,000,000 1,400,000,000
19,000,000
143,000,000
353,000,000
582,000,000
844,000,000
1,069,000,000
1,196,000,000
1,172,000,000
1,271,000,000
622,000,000 1,370,000,000
Digital Track Sales By Year• Digital track sales reached another record high in 2011 w/ nearly 1.27 Billion sales. • YTD 2012 digital track sales are on record pace again and projecting to be around 1.37 Billion.
Note: 2012 is year to date sales through June 10th .
199519961997199819992000200120022003200420052006200720082009201020112012
2012 Proj
- 100,000,000 200,000,000 300,000,000 400,000,000 500,000,000 600,000,000 700,000,000 800,000,000
368,000,000
448,000,000
505,000,000
580,000,000
648,000,000
706,000,000
712,000,000
649,000,000
636,000,000
651,000,000
599,000,000
553,000,000
449,000,000
360,000,000
301,400,000
237,000,000
223,500,000
80,663,000
200,000,000
CD Album Sales By Year
CD Album Sales By Year
• CD album sales peaked in 2001 with 712 million CD albums sold and in 2012 still account for the majority of albums sold: 61%.
Note: 2012 is year to date sales through June 10th .
2004
2005
2006
2007
2008
2009
2010
2011
2012
2012 Proj.
- 20,000,000 40,000,000 60,000,000 80,000,000 100,000,000 120,000,000
5,500,000
16,200,000
32,600,000
50,000,000
65,000,000
78,400,000
86,300,000
103,100,000
50,346,000
117,500,000
Digital Album Sales By Year
Digital Album Sales By Year
• Digital album sales continue to grow each year and YTD 2012 account for 38% of all album sold.
Note: 2012 is year to date sales through June 10th .
- Up 14% YTD over 2011.
Music Consumption Song & Album Facts There were 8 million different songs downloaded at least once in 2011.
Note: 94% (7.5 million songs) were downloaded less than 100 times each and 30% were downloaded only 1 or 2 times.
Other interesting digital song facts: Top 200 downloaded songs = 20% of digital song sales (263m) Top 3,300 downloaded songs = 50% of digital song sales (635m) Top 10,000 downloaded songs = 65% of digital song sales (830m)
There were 77,000 new album releases in 2011 that sold at least one unit that produced 113.2 million album sales.
Less than 1% of all new album releases (350 titles) accounted for 70% of all new album release sales.
94% of all new releases in 2011 sold less than 1,000 units each (72,000) and 80% sold less than 100 units.
Music File Sharing - Today
• 1 million active music torrents• 200 million individuals tracked• 2 billion music ‘file trades’ in 2012 (so far)• 10% of American BitTorrent users use an
anonymous VPN• USA makes up 22% of music file sharing• 60% of downloads made by top 40% of users
Music file sharing - Trends
11/18/10 2/26/11 6/6/11 9/14/11 12/23/11 4/1/12 7/10/120
50
100
150
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Music Torrents Created per Day
This year
Music file sharing - Trends
12/23/11
1/12/12
2/1/12
2/21/12
3/12/12
4/1/12
4/21/12
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0
50
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New torrents per day
400000
450000
500000
550000
600000
650000
700000
750000
Illegal Downloaders per day - USA
Music File Sharing - Conclusion
What does torrent data show?
• Downloads in the USA are reducing• Availability is not correlated to downloads• Downloads are correlated to sales
• Using file sharing data, sales can be predicted
2007 2008 2009 2010 2011$0
$50
$100
$150
$200
$250
$300
$350
$400
$143
$169
$205
$270
$377
$36
$100
$155
$249
$292
$11
$12 $17 $18 $20
Total Collections (in millions)Total Distributions (in millions)Administration Costs (in millions)
*
*
*
Organizational Efficiency
(* pre audit)
70% of Americans aged 12 or older now have a broadband connection.Up from 13% in 2002.
44% of Americans have smartphones. Up from 14% in 2010
17% of Americans listened to online radio in their cars by connecting their mobile phones, up from 6% in 2010
Revenue per user
23
'2-5 '6-8 '9-11 '12-140
5
10
15
20
25
30
35
iPod touchAndroid SmartphoneiPhoneiPad
Ages:
For “Connected Kids” iPad gets attention, but Touch gets usage, especially as kids become “tweens”
Music apps as important to connected tweens as social networking, but…
24
GamesM
usic
Socia
l Netw
orking
Silly/
Fun
Books
77%
50% 49% 46%
25%
Apps Used: 12-14 Yr. Olds
Music apps as important to connected tweens as social networking, but…
25
GamesM
usic
Socia
l Netw
orking
Silly/
Fun
Books
77%
50% 49% 46%
25%
Apps Used: 12-14 Yr. Olds84% of music app
users only have freeapps
Saving the next generation…
26
• Establish value proposition• Create commerce platforms• Integrated experience• Rethink social media• Licensing deals
As kids… CDs account for half of the entertainment content they own…games, movies, books