Poor Fan Engagement Is Costing Music Industry $450M – $2.7B Annually [Nielsen Study]

Posted: August 13, 2013 in Artist Corner

Courtsey of Hypebot.com


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The U.S. music industry is leaving hundreds of millions on the table yearly thanks to poor fan engagement, says a new Nielsen survey. The study of 4000 found 6 levels of fans, each with different spending levels and music consumption habits:

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The “aficionado” spend more than $422 per year on music, concerts and merch and the “digital fan” spends an average of $363 a year while using the smartphone or tablet as their music hub. “Big Box” fan shop at mass market retailer, usually buying pop and country music, and spend $196 per year.  These buyers account for 40% of the music buying public and 75% of all U.S. music sales, and many of them would spend more if offered the right opportunities.

Even more potential for growth lies in what the study labels “ambivalent” fans – those who spend between $44 and $121 a year on music. They are, say Nielsen, “seeking more — not particularly engaged with the music but are using Pandora … Willing to pay for streaming concerts and willing to pay for special/unique content.”

It’s the problem that hundreds of music tech startups, labels, managers and artists are trying to solve with  music discovery, social media, direct to fan sales, VIP packages, unique fan experiences and more.

It’s all familiar ground to regular Hypebot readers.  But seldom has the top end potential been stated so starkly:  $450 million – $2.68 billion more income spread throughout the music ecosystem annually. 

“Fans want more,” said Barara Zack, Chief Analytics Officer at Nielsen Entertainment Measurement at his SXSW presentation. “There is an unmet need there. There is a desire to engage at a different level than what they have.”

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