Steve Redmond on Nielsen's latest music consumption figures

Monday August 20, 2012

'Cassettes more popular than Spotify' shock!

So the award for the most surprising statistic of the week has to go to this report which points out that more Americans (9%) say they listened to music on cassette in the past year than listened to it on Spotify (7%).

It's a fantastic bar-room nugget, but of course you need to put it into context.

Spotify has only been available in the US market since July 2011.  Cassettes have of course been around for 50 years and are 20 years off their peak.

Bear in mind too that these are stats about listening rather than paid consumption and you might conclude that they are fairly worthless.

Yet this is the same Nielsen study (official release here) which generated headlines around the world when it revealed last week that US teenagers listen more to music on YouTube than on the radio.….

As the piece quoted above points out, perhaps the most striking thing about the report was not the success of YouTube, but the resilience of the CD.

Even among teenagers - a demographic which has never known a world without the internet and downloading - the urge to own a physical music product remains strong with 50% of them saying they listen to music on CD, and more than a third saying they still buy CDs.

Which set me to thinking how obsessed the debate about the future of music has become  with the relative performance of physical versus digital rather than with the absolute size of market opportunities.

Take the digital album: of course it's growing. In the first half of this year sales were worth £91.9m. But given that somewhere north of 80% of it is in the hands of iTunes, that leaves a comparatively low £18m or so for the rest of the market to fight over.

Which brings us to the CD album, 28.8m of them sold already this year worth a significant £212m in a genuinely competitive market.

Looked at from one end of the telescope, it can only be a negative story. CD sales have clearly plummeted from their peak. Looked at from the other side, however, the CD market still represents an opportunity worth hundreds of millions of pounds.

Its relative performance may be poor, but the absolute size of the opportunity means it ought to be taken seriously.

The danger of the obsession with the relatively strong performance of some parts of the music market compared with others, regardless of their absolute performance was typified in a catch-up phone call I had this week.

"So what's new?" I asked in post-holiday mood. "Well, digital albums are doing really well," he replied.

If only the market as a whole wasn't down 20%, I responded.

Silo thinking, an obsession with novelty and the relative size of different slices of the cake, rather than the absolute size of the cake itself: taken together these are all rather depressing.

I think I might just go and listen to a cassette…

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