Boomers Rule

1
Boomers Rule
of US pop. By RIAA Age Segment
Mean age excluding 12 under 41 yrs.
2
And most music is bought by people like
3
1984 John Ritter is between families, and the
average physical music buyer is...
29
4
1994 Ellen isnt a franchise, and the average
physical music buyer is...
31
5
2004 Friends no more,and the average physical
music buyer is...
35
6
Trends to watch

• Women in the majority physical buyers and
  listeners
  
• Teens and boomers
• Growing importance of African-Americans
• Nearly 20 of physical buyers

7
Distinct Music Buyer Profiles
Source NPD MusicLab March 04
8
Digital Divide
35
Mean age excluding 12 and under
9
Distinct Music Buyer Profiles
Source NPD MusicLab March 04
10
More Statistics

• 8 out of 10 digital music consumers report also
  buying physical product
  
• True for both legal and P2P users

Source NPD MusicLab
11
More Statistics

• 44 of paid service users also used a P2P service
  in the past 6 months
  
• One in five P2P users reported using a paid legal
  service to download music

Source NPD MusicLab, NPD MusicWatch, Digital
Estimate- Jupiter, Aug 04
12
What would make you much more likely to buy music
digitally?
Ownership, Quality, Security
Source NPD MusicLab
13
Whats it about?

• Physical is about commitment
  Long-term fan, and Ill buy the CD for my
  collection
  
• Digital is about dating
  I can pick and choose the songs I want
  instead of buying the entire album

Source NPD MusicLab July 2004
14
Households Acquiring Digital Music Files Legal,
Ripped, IM- But mostly P2P
Anticipation Period
Post Litigation
Source NPD MusicWatch Digital- adjusted for lag
15
Households Acquiring Digital Music Files P2P,
Legal, Ripped, IM
Source NPD MusicWatch Digital- adjusted for lag
16
Litigation has had an effect
Why have you decreased or stopped usage of file
sharing services?
NPD MusicLab, May 2004
17
Music And The Computer Legal Digital Music
Percent of Households Buying From A Legal Music
Service
Average files acquired per month12
Source NPD MusicWatch Digital
18
Fundamentals

• Getting older, and younger
• Premium on target marketing
• Overlap
• Heavy music buyers choose variety
• Sustained promotion
• To expand the legal user base

19
Music Retailing In America

• Its a Wal-Mart nation
• Battling Consumer Indifference
• Do the basics
• Be a Volvo

20
Retailers Challenge

• There is an ongoing and fundamental shift in
  shopping preferences that puts traditional music
  and entertainment retailers at risk
  
• Consumers are basically indifferent about where
  they shop for music
  

21
Change in Channel Shares
Source NPD MusicWatch 9 Months Ending June 04
compared w 9 mos ending June 02
22
In the past two years
Share Among Teens (13-17) CD/Record Stores.- 10
pts
Mass Merch6 pts Electronics..5 pts
Share Among 18-25 CD/Record Stores.- 8 pts Mass
Merch4 pts
Electronics..9 pts
Source NPD MusicWatch Oct 01-June 02 v Oct
03-June 04
23
Dixie Chips!
We asked video and music buyers what else they
bought at
Nearly 9 of 10 American households shop at
Wal-Mart!
24
Getting your fair share?
We asked video and music buyers what else they
bought at
25
I make special trips to buy music
NPD Incidence Study July 2003
26
Doesnt matter where I buy my music
NPD Incidence Study July 2003
27
Why do you purchase physical music?

• I like the whole experience of going to a store
  to shop for music

14
citing as one of top 3 reasons to buy physical
music
Source NPD MusicLab
28
Where else did you buy physical music?
Virgin Megastore Music Buyers
Source NPD Media Link June 04- past 12 mos
29
In search of excellence
Mean 35
Source NPD MusicWatch Feb. 03- Jan. '04 Buyer
.

30
Repeat Music ShoppingProduct Mix, Value And
Convenience/ Organization
Factors Driving Future Shopping Intent
Source NPD MusicWatch Jan. 03- Dec. 03
Correlation of attribute with future purchase
intent
31
Translated to share