Weekly Register: Strait Talk—Does On-Demand Drive Sales?

© 2013 The Nielsen Company

Consumer research giant Nielsen recently debuted its first Entertainment Consumers Report aimed at exploring how people listen, buy and play with music, home video, games and books in the U.S. Overall the data showed that home entertainment consumers are embracing digital at a higher rate than ever before.

No. 1 Country Album this week!

The on-demand streaming results stood out to this writer since they added fuel to the debate question: Does on-demand streaming drive sales?

Music is considered to be “on-demand” when the consumer can choose exactly which song to hear. Examples of on-demand companies include Spotify, Muve and most recently Google All Access. (Streaming that is programmed by the station, like Pandora, is called “webcaster” or non-interactive.)

Nielsen’s report found that on-demand streamers are highly motivated music lovers and 29% of them are likely to purchase new music after hearing it through a streaming service. As the red circles reveal, compared to the average U.S. Internet user they are 96% more likely to follow a celebrity on a social network and 90% more likely to be heavy music spenders.

The research supports Spotify’s claims that its service is not a substitute for purchasing, but helps fuel it. But perhaps it’s premature to draw conclusions about the relationship between on-demand streaming and sales behavior. We are still at an early point in the development of the services.

Why? Two main reasons. Firstly, paid on-demand subscribers still represent a very small portion of the overall streaming sample. The RIAA reports that for year-end 2012 all U.S. streaming services (on-demand and webcaster) had a total of only 3.4 million paid subscribers. So the majority of streaming listeners are experiencing a free or ad-supported experience. They have not yet committed to pay. Secondly, streaming depends upon uninterrupted connectivity which is still not a completely ubiquitous experience. Loading a digital file on your device, so you are not dependent upon bandwidth everywhere you go still makes sense. But what about when the bandwidth is universal— in the air, in your car and in every nook and cranny on the planet? Won’t that destroy the concept of owning MP3 files?

What are your thoughts?

And now onto this week’s sales results…

Reading The Grid In A Strait Line
Like a premium single malt scotch, George Strait enters the Current Country album chart at No. 1 while simultaneously placing his well-worn Resistol atop the radio airplay charts at the same time. Pretty smooth, Mr. Strait, and well deserved. Love Is Everything scanned almost 120k units (27% digital) showing improvement over his last album release which registered first week sales of 92k.

Also debuting this week was Donald Trump’s new favorite Celebrity Apprentice, Trace Adkins. Trace placed Love Will at No. 6 with sales of almost 25k (28% digital). Adkins’ new offering fell short of his last trip to the Weekly Register when his debut rang up 47k units.

The new product pipeline has been active the past few weeks and correspondingly we see country move from last week’s +1.1% to a kinder gentler +2.6%. This lead is especially appreciated when comparing country sales to all-genre, which is down YTD -5.1%. That means country has almost an eight percentage point lead over the general industry. Way to go Music City. (Shhh, let’s hope the Mayor doesn’t decide to tax our good fortune to pay for the new Music City Center…)

Country’s sales surplus was also driven by week 2 sales from Lady Antebellum (No. 2; 56k) down 67% from its debut week; and Pistol Annies (No. 3; 30k) down 64% W/W. Week 3 sales from “Islander” Kenny Chesney, shifted a nice 26k for a RTD total of over 227k. And to round out the Top 6, let’s include the ever “judgmental Voice-er,” Blake Shelton at No. 4. Fans purchased  his newest collection, Based Upon A True Story about 28k times.

Next week the album release fun continues with Darius Rucker leading the charge…

Tracks are also a bright spot for country labels showing an 8.8% gain YTD, and a 2% boost W/W. Did the upswing this week come from impulsive Sunday evening downloads spurred by the Billboard Awards and the Tim McGraw special? Probably, but we’ll know better when we see next week’s numbers.

Currently, we hear that Big Machine Records is trying to pass a bill in Congress that would rename the Digital Genre Country Chart the Florida Georgia Line “Cruise” Chart. Why not, they are always in the No. 1 spot. They now have almost 3.5 million in total downloads, adding a nifty 189k this week. We’ve mentioned it before, but note that “Cruise” has two versions—the country track and a remix with Nelly. On the country chart they add sales from both versions together with one listing (No. 1). But on all-genre tracks chart they are listed separately. This week the remix downloaded 125k copies and the country version added almost 64k.

Blake Shelton, who we hear is organizing an NBC relief concert for Oklahoma (good job Blake) sits at No. 2 with “Boys ‘Round Here” ringing up a solid 109k units.

Got a question? Something you’d like to know about, but wasn’t mentioned? Don’t be a lazy slug, write me a note ([email protected]) and I’ll do my best to answer it. Oh, and about the rumor I might be heading to the BVI next week to interview Richard Branson—“no comment.”!

Keep on clicking…