Who IS Listening? Some Interesting Demographics for the Online Music Market

Online Music Takes Off

It's become very obvious that online music is the new gold. When the world's most important tech companies - Microsoft, Apple, HP ... get involved, you know that there is profit to be had. But who is actually buying the music and who is downloading the music are two completely different groups.

Before digital downloads, the major consumer group of music was the 14 to 24 year olds. They bought the cds (or tapes or records depending on your generation) and they bought the players to listen to them. Music purchasing habits of older demographics (30's, 40's...) dramatically dropped off.

This has all changed with digital downloads.

What is happening now, is that the younger demographics, while still buying the players, are not actually buying the music. They download for free from peer-2-peer sites and from culture portals such as MTV. They are willing to spend the time looking for free music, they are not willing to spend the money on music.

It is the older demographics that are now buying more digital music, specifically 45+. Why? Because they don't want to spend the time searching - and they also have the money to spend.

Getting Generation Y to Buy
Here's some thoughts on how to get the younger demographic to start buying music.

Top down sell. Enable the parents to make it easier for their kids to purchase online music using pre-paid and set-limit accounts.

Value-added selling. Give the younger demographic more than just a song. Give them the ringtone. Give them access to exclusive content (similar to how CD's now contain more than just the music.)

Club selling. Join the club and get X number of downloads per month.

The Online Music Stats:

Top Online Music Destinations, at Home

	Unique Audience (000)	Active Reach (%)
LAUNCH	4,276	4.01
AOL Music	3,742	3.51
MusicMatch Jukebox	3,360	3.15
BeMusic	1,165	1.09
MTV Networks Music	1,161	1.09
iTunes	1,011	0.95
A-Z Lyrics Universe	703	0.66
Universal Music	560	0.52
Sony Music	516	0.48
Warner Music Group	383	0.36

Source: Nielsen//NetRatings NetView Week ending Oct. 3, 2004

Demographic Data for Music Category
Month of September 2004 US, Home

	Unique Audience (000)	Audience Comp (%)
Total	37,718	100
Male	18,200	48.25
Female	19,519	51.75
Age
2 - 11	1,787	4.74
12 - 17	6,990	18.53
18 - 24	3,703	9.82
25 - 34	5,797	15.37
35 - 49	10,888	28.87
45+	12,285	32.57
55+	5,730	15.19
65+	2,189	5.8
HH Income
$ 0 - 24999	2,890	7.66
$ 25000 - 49999	9,623	25.51
$ 50000 - 74999	10,753	28.51
$ 75000 - 99999	6,415	17.01
$ 100000 - 149999	5,134	13.61
$ 150000+	2,244	5.95
No Response	659	1.75

Source: Nielsen//NetRatings NetView

Source: Nielsen//NetRatings AdRelevance Week Ending Oct. 3, 2004

(c) 2004 MediaPost Communications, 16 W. 19th St., New York, NY 10011

Will HR 2929 Close the Cookie Jar?

A Bill is pending in Congress that is intended to improve Internet security and privacy. HR 2929 requires every tracking cookie served by third parties and aggregated publishers, be it a session cookie or a persistent cookie, be served only if approved by the end-user regardless of the recipient's browser setting.

I applaude the intent of this Bill - I doubt the logic behind the Bill.

Technology advanced, we learned how to use cookies - now the laws have to adjust so the technology is not abused.

It is ignorance or ego (or both) that a company thinks it can track your web activity without permission.

However, opt-in permission for each and every cookie is ridiculous. Opt-in should be by company or by site.

Interestingly, the Mozilla browser already has a very customizable Cookie Acceptance Policy (a function of Level of Privacy) that allows you to decide your level of privacy.

You can choose to accept, reject, flag, or allow for the session first party cookies and third party cookies based on (1) if the site has no privacy policy (2) if the site collects personally identifiable info without your consent (3) if the site collects personally identifiable info with your implicit consent (4) site does not collect persanlly identifiable.

Mozilla pretty much covers what this Bill proposes to do - by using technology - and without causing major headeaches. (Unfortunately Mozilla's new browser "Firefox" does not have the same level of detail in cookie management.)

Will politicians' technological ignorance ruin the web experience and kill a booming industry?

Check it:
http://www.mozilla.org/

Niche Marketing to Community Portals

Mark Naples of WIT Strategy wrote:
Much has been made recently about community sites and online networking portals and tools. Friendster and LinkedIn come to mind. But, these are just the latest examples in an industry segment that continues to broaden and still has an enormous upside...

With enormous universities like Penn State crafting their own deals with music sharing services, I guess it was just a matter of time before someone took advantage of what is perhaps the greatest fallow media asset online. The best part of this might just be that college students were already there. CampusNetwork.com just gave them a reason to gather. It seems pretty simple at this point, after the fact. That's why I'd expect it to succeed. (Full article at MediaPost.)

My comment:
I agree - community sites provide an amazing opportunity for marketers to target niche audiences. I use the community portal tribe.net to market online music to various music related tribes - the ipod tribe, the music lovers tribe, the jazz tribe, the guitar players tribe...

The great potential with college community sites is that each college already has the database of potential customers to which they can market the service - including (income earning) alumni. Those prospects already have a relation with that organization, lowering the sales barrier, making them more apt to become a customer. New technologies and companies such as Loudeye are making it very easy for organizations to sell media. Imagine this scenario - colleges selling media services to alumni (for example music downloads) with a percentage of the sale going to the school. (Would that be tax deductable?)


Check it: Loudeye

Succesful Political Email Propoganda

Jim Meskauskas of Underscore Marketing wrote:
Alas, this was the season for the Internet's introduction to political marketing, but not for realizing its full potential as a messaging vehicle. Stay tuned for 2006. (Full article at MediaPost.)

My comment:
What I have found interesting during this election is the large number of political party emails that are being forwarded to me by various peers - and more telling, that they have mostly been (all except one) pro-Democratic party emails. It has been very effective on who I will be voting for.

My peer base is fairly split 50/50 - so it's not that I have a leaning towards one party.

Could it be that the reason why the Democratic party is taking the 3 - 1 lead on using the Internet is due to the demographics of the Dems being younger, tech-savvy compared to the Republicans older, traditional TV watching crowd?

Additionally, the email format works well for this type of advertising, as opposed to banners, pop-ups, etc. As you stated "They need to appeal to them rationally in a text-based medium. That medium, of course, is the Web." And that medium format is email.

While the Republicans may control TV networks like FOX, the Democrats seem to be controlling the Net with cost-effective email to sway the opinion of the un-decided - and it seems to be working (at least it did on me!)