The Steady Demise Of The CD Buyer How The Music Industry Is Sleepwalking Into A Revenue Collapse
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The 20,000 Foot View The CD was the catalyst for the record labels’ apogee but now resembles a product strategy time bomb ticking away. With all the momentum of streaming it is tempting to discount CD buyers as an inconvenient legacy of the physical era, a format anomaly that will soon pass. Yet physical music sales generated more than twice the income that streaming did in 2015 and will remain a larger revenue source for the vast majority of the decade. Crucially, CD buyers are becoming an increasingly distinct group of older, less tech adventurous consumers for whom there is no digital transition path. When they stop buying CDs their spending will disappear, leaving a gaping hole in recorded music revenue. Key Findings
- Physical music generated billion in 2015, of revenues
- CD buyers the largest single group of music consumers with penetration compared for concert goers, for music and for subscribers
- Physical music fell by between 2013 and in the US and UK
- CD buyers an average age of and getting older every year
- Their average spend is just or a far short of the standard subscription fee
- CD buyers’ spend is falling annually, down in 2013 of CD buyers are female compared to of music subscribers of CD buyers are over while of subscribers are under
- Though CD are casual music fans compared subscribers they generate times more revenue than free streamers
- CD buyers valuable consumers who are neglected risk
- Physical music accounted for of German and revenue combined in 2015
- Streaming music will not overtake physical music until mid 2019
- By 2020 than a quarter of music will come from physical sales out main music markets globally
- It is for the music industry to Netflix’s lead and digitize its with its physical product customers
- Subscriptions are a natural fit for casual buyers
Companies mentioned in this report: Amazon, Netflix, SoundCloud, Spotify, Tesco, Walmart, YouTube