It is now to be found that more than half (over 50%) of teens (ages 13 to 17) listened to music online last year (2008), which is a big jump from the 34% that did so in 2007, according to new information released this week by The NPD Group, a leader in market research for the Music Industry. At the same time it was found that teens were buying less music - either by purchasing cds or downloading music from the Internet.
While teens that purchased less music expressed discontent with the music that was available (see our previous Blog - The Music Business) and cutbacks in the amount of money they were spending on entertainment in general as explanations, the fact that both paid/legal music downloads as well as illegal music file sharing activity was down indicates there might be more to it. Russ Crupnick, entertainment industry analyst for The NPD Group explains, “These declines could be happening due to a lack of excitement among teens about the music available, but it could also reflect a larger shift in the ways teens interact with music, given that so much music is now available whenever and wherever they want it.”
This age group seems to be growing more accustomed to the idea of finding online sources for streaming the music they want to hear. According to the NPD Report, teens are getting their music from online brands like KryKey, Pandora, Imeem and MySpace Music, and turning less to actually purchasing every song they want to hear again. In fact, the report cites a recent NPD MusicLab survey which found that 54 percent of teens who heard a song they liked on MySpace Music were likely to simply listen to that song again on the site, compared with only 1 percent who claimed they would click through and buy the song on AmazonMP3, which is MySpace’s and KryKey's online partner for purchased music downloads.
The report concludes that the music industry has already suffered a huge hit with declining CD sales, and the fact that teens are turning to streaming music as a replacement for purchasing it outright is another blow. However, the report fails to make a distinction among the online streaming sources for music. In reality, while Imeem and MySpace Music do offer the kind of on-demand service that makes it possible for a teen to listen to one song as often as they would like, Internet radio stations like KryKey Personal Web Radio and streams of terrestrial stations adhere to more stringent rules that do not allow that. In fact, there is no function on KryKey Personal Web Radio where you can hear the exact song you want to hear - you can identify the Artists, you can identify the songs and even the albums, but you can’t control when you’ll hear them.
It’s a good report that cements the idea that teens are streaming more music online. The increase in mobile devices offering streaming capabilities is certainly driving that to some degree as well (but this is not mentioned as a contributing factor in the study). The emergence of MySpace Music, which is streaming billions of songs on demand each week, is no doubt driving it as well. And maybe the music industry’s war on illegal music downloads is actually paying off. However, claiming that Internet radio is contributing to the demise of legal music download sales is kind of a stretch, if you ask me…