How Americans Spend on Music

September 17, 2015

This article is included in these additional categories:

Hispanic | Media & Entertainment | Mobile Phone | Radio | Sponsorships | Teens & Younger | Word of Mouth | Youth & Gen X

Nielsen-How-Americans-Spend-on-Music-Sept2015A slight majority (52%) of Americans’ spending on music goes to live events, says Nielsen [download page] in reporting the results of a recent survey. Admission to live music concerts represents the largest share of music-related expenditures; at almost one-third (32%) of all spending, concert admissions alone are on par with combined spending on physical forms of music (13%), digital tracks/albums (11%) and music gift cards (7%).

While there’s roughly an equal weight in overall spending between live events and recorded music, Millennials (18-34) and Hispanics skew more towards live events. For Millennials, 64% of all music-related spending goes to live events, while for Hispanics events account for 61% of all expenditures. Both groups over-index in share of dollars spent on music festivals and admission to DJ events, while under-indexing on satellite radio subscriptions and gift cards.

(That doesn’t necessarily mean they spend less on those formats when considering absolute dollars. After all, Hispanics report spending 50% more on music than the average consumer, per the report.)

As the results show, music festivals are a particularly influential part of Millennials’ music-related spending, and the survey indicates that Millennials comprise 44% of all festival goers. In examining the reasons why fans (not just Millennials) choose a festival, the report reveals that the line-up (86%), proximity to where they live (68%) and price (62%) are the chief influencers, though half choose based on where their friends and about half go to the same festival each year.

Previous research from Nielsen has shown that music sponsorships can provide opportunities for marketers: 43% of music fans surveyed said they notice when a brand or product sponsors an artist or brand. A significant share of fans also said they would be persuaded to try a product based on the brands’ promotional activities.

Recent data from IEG indicates that sponsorship spending on music in North America is expected to grow by 4.8% this year to $1.4 billion. That growth rate outpaces the sponsorship industry (4%) as a whole, along with all other property segments including sports (4.4%) and causes (3.7%), per the report.

This year non-alcoholic beverages top beer as the most active sponsorship category. In fact, non-alcoholic beverage companies are 3.8 times more likely than the average of all sponsors to sponsor music. But, Anheuser-Busch ranks as the most active sponsor in North America, ahead of Pepsico and with Coke (last year’s leader) back in fifth.

Returning to the Nielsen study, live events, performances and concerts appear to be a growing source of music discovery for Americans. This year about 1 in 8 (12%) respondents aged 13 and older said they discover music from live events, up from 7% last year. Still, radio (AM/FM or satellite) continues to be the most common method by which Americans discover music, cited by 61% of respondents. Word-of-mouth is also popular, as friends and relatives are a source of music discovery for 45% of respondents, including 65% of teens (13-17).

In other highlights from the Nielsen report:

  • Three-quarters of survey respondents said they listen to music online during a typical week;
  • Almost half – 44% – listen to music on a smartphone during a typical week;
  • Cost (83%) and ease of use (82%) rank as the most important factors when selecting a streaming music service;
  • The top reasons respondents are unlikely to subscribe to music streaming services is that they are too expensive (46%) and they can stream music for free (42%); but
  • Almost 1 in 10 of those who don’t currently pay for streaming indicate that they are likely to subscribe within the next 6 months.

About the Data: Data for the Nielsen Music 360 2015 report was collected July18 – August 3 among 3,305 consumers reflective of the population of the United States. Additional responses were collected for ages 13-34 and for Hispanics. The survey was offered in both English and Spanish, as selected by the respondent. Data was weighted to the U.S census population based on age, gender, race, education and household size.

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