Future of the Recorded Music Industry: Part 1 - Value and Payment

Table of Contents

CONTENTS

EXECUTIVE SUMMARY

INTRODUCTION

METHODOLOGY

• AGE
• GENDER
• EDUCATIONAL STATUS
• EMPLOYMENT STATUS
• MARITAL STATUS

SURVEY RESULTS

• IMPORTANCE OF MUSIC
• COMPARISON OF FIVE TYPES OF MUSIC ENTERTAINMENT
  • Relative Importance
  • Willingness to Pay
• PIRACY
  • Paid-for vs. Pirated Music-CD and Digital
  • Music Enthusiasts vs. Non-enthusiasts
  • Absolute Level of Piracy
  • Actual Level of Piracy
  • Demographics
• MONEY SPENT ON RECORDED MUSIC
  • Current Expenditure
  • Stated Future Intention
  • Hard-core Non-payers

ANALYSIS

• BEHAVIOURAL CONDITIONING: NEW BELIEF SYSTEM
• CHANNEL ISSUE: INTERNET MEANS FREE
• SHIFTING VALUE PROPOSITION
  • New Value Proposition
  • Change in Who Contributes the Most Value
  • Analogy 1: Mobile Phones
  • Analogy 2: Second-hand CD Market

TOPLINE RESULTS

SURVEY QUESTIONNAIRE

LIST OF FIGURES

• Figure 1: Age Distribution of Survey Respondents (U.S. Online Users)
• Figure 2: Gender Distribution of Survey Respondents (U.S. Online Users)
• Figure 3: Educational Status of Survey Respondents (U.S. Online Users)
• Figure 4: Employment Status of Survey Respondents (U.S. Online Users)
• Figure 5: Marital Status of Survey Respondents (U.S. Online Users)
• Figure 6: Segmentation of Respondents: Music Enthusiasts and Non-enthusiasts (U.S. Online Users aged 15 to 25 years)
• Figure 7: U.S. Consumer Attitudes towards Four Types of Musical Entertainment (15 to 25-year old online users)
• Figure 8: Comparison of Different Types of Music: Consumer Payment Ethos
• Figure 9: Relative Proportions of Paid-for vs. Pirated Music: 15 to 25-year old Online Users in the U.S.
• Figure 10: Relative Proportions of Paid-for vs. Pirated Music (15 to 25-year old Online Users in the U.S.) - Music Enthusiasts vs. Non-enthusiasts
• Figure 11: Percentages of Paid-for Music by 10% Bin (CD and Digital): 15 to 25-year old U.S. Online Users
• Figure 12: Percentage of Music Collection that is Paid-for (CDs and Digital) - Variation with Age
• Figure 13: Who Delivers the Most Value to the Music Consumer?
• Figure 14: Mobile Communications Business: Who Delivers the Most Value to the Consumer?
• Figure 15: Music Consumption Experience: Comparison in Value Added by (Most) Record Labels and Technology Companies

LIST OF TABLES

• Table 1: Five Different ways in Which Consumers can Spend Time and Money on Musical Entertainment
• Table 2: The Two Most Important Forms of Music: Summary
• Table 3: U.S. Consumer Attitudes towards Four Types of Musical Entertainment (Music Enthusiasts and Non-enthusiasts)
• Table 4: Consumer attitudes towards importance and willingness to pay: personal music collection, gigs & concerts and live music (15 to 25-year old Online Users in the U.S.)
• Table 5: Consumer attitudes towards importance and willingness to pay: mobile phone ringtones and music services (15 to 25-year old Online Users in the U.S.)
• Table 6: Calculation of Absolute Level of Piracy: Songs Added per Year per Respondent & Equivalent Retail Value
• Table 7: Average Monthly Expenditure on Music: CDs and Digital (15 to 25-year old online users in the U.S.)
• Table 8: Average Monthly Expenditure on Music - Stated Future Intention
• Table 9: Comparison Between CD and Digital Music: Product Delivery Vehicle and Value Extraction (Record Labels and Technology Industry)