Engaging the Online Audience
A while ago PaidContent.org reported on some findings from market-research firm NPD that found that the percentage of Internet users who bought CDs in the last quarter has fallen yet again to 22 percent (down from 25 percent in the same quarter last year). The continued decline isn’t really news any more, but there were some other interesting tidbits to consider.
Teens’ usage patterns today help define new models for tomorrow’s consumption. The good news: overall, online music sales are growing, and teens themselves purchased 34% more paid digital downloads than last year. The bad news: there’s still wide spread use of illegal P2P networks among teens.
While it’s easy to interpret these numbers as signs of further doom and gloom for the music industry, they are also an indicator of how the music experience needs to evolve – and what younger generations value in that experience.
The data in the NPD report suggests that what is working are high engagement models which answer the consumer’s increasing demand for a personalized and novel experience with their music – one that allows them to share and interact with others around content.
There’s still experimentation to be done to find the right balance between a compelling consumer experience, and a monetization model but the good news is that there’s a more direct and timely feedback loop between media owner and media consumer than has ever existed.
Even without the state of the economy, it should be an interesting year for both media companies and consumers.
Posted by Scott Brown at 02:01PM PST
Carter Feb 16, 2009
The problem with experimentation to see which way(s) various online groups want to transact with music is that the barrier of entry is too high in the sector. Music distribution licenses are very expensive and so we are left with a few groups chasing the old 99 ¢ paradigm (iTunes).
The current economy has made it even more difficult for creative distribution models to sprout. Hopefully once a few gain traction, the Labels will recognized they need to embrace more than one revenue stream and more than one pricing model.