Thursday 24 July 2008
Tempo Europe is a multi-country study conducted by Ipsos MORI measuring digital music behaviour across GB, France and Germany.
Ipsos research demonstrates freeloaders in the big 3 European markets have a significant overall music category spend
The results reveal that, while they may not pay for the music they download, 30% of the total annual music spend within the category on other music items within these markets can be attributed to "freeloaders". Within the music category "freeloaders" have an estimated value of over £600m* in GB alone, this amounts to a significant share of music spend.
How many downloaders are freeloaders?
In GB a quarter of all adults have downloaded music (23%), and the majority of these are freeloaders (56% of all downloaders). In Germany, nearly a fifth have downloaded (19%), and 54% are freeloaders. In France, a quarter has downloaded, but they are more likely to be freeloaders (76%).
They don't pay for digital music, but freeloaders are spending the same proportion of their total spend on recorded music as paying downloaders
Despite their reluctance to pay for digital music, freeloaders, like active downloaders**, spend just under half of their total category spend on recorded music (44% vs. 45% respectively).
Indications of cannibalisation of physical music by digital music amongst paying downloaders
Freeloaders spend a third of their total music spend on CD or vinyl purchases, but active paying downloaders allocate just a fifth of their total spend to physical audio formats (34% vs. 19% respectively). That paying downloaders spend a similar proportion of their total music spend on digital as they do physical indicates the degree to which cannibalisation between physical and digital exists amongst paying downloaders (15% vs. 19% respectively).
Where else do downloaders spend money in the music category?
A third of GB freeloaders' annual music spend is attributed to listening equipment (34%), a fifth on concert tickets (20%), and a small proportion on merchandise (3%). The story for France and Germany is much the same:
Opportunities for future revenue leverage amongst freeloaders
The results of Tempo Europe highlight the opportunities available for generating revenue from freeloaders through other channels:
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The non-paying online trial model is important, and may avoid cannibalisation of paid for physical recorded music
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Spend on merchandise is relatively low in comparison to spend on listening equipment, but opportunities could exist for merchandising vendors to tie up with equipment manufacturers to leverage spend in both revenue streams
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Strong similarities across all markets suggest the potential for a unified pan European strategy
Footnotes:
* Based on claimed annual spend amongst downloaders on the music category
** Those that have paid to download a track in the past month
Technical note:
Tempo is a multi-country study conducted by Ipsos MORI across GB, France and Germany using both offline and online methodologies. Quarterly waves of face-to-face offline omnibus interviews are conducted to generate a demographic profile of digital music downloading behaviour across each country. The results of the offline study are used to calibrate the sample profile of downloaders in each country for the online deep dive study, which is conducted twice a year.
The figures quoted above are a combination of data from the 2008 Quarter 1 offline study, and the 2008 Quarter 2 online study. All results are based on data which have been weighted to be nationally representative of the offline general population of each country.
Offline fieldwork took place during January 2008; results are based on 982 interviews conducted in-home amongst adults aged 16+ across Great Britain, 1008 interviews in France, and 1051 interviews in Germany. Online fieldwork took place between March-April 2008 amongst music downloaders aged 12+; results are based on 991 interviews across Great Britain, 1007 across France, and 1004 across Germany.