The CMA presented findings from its Country Music Consumer Segmentation Study to CRS attendees this morning, (3/5). The data presented is part of an extensive study commissioned by the CMA to define and examine the key consumer revenue drivers for country music. The study, was based upon a phase one sample of over 7,500 consumers, with a call back sample of 1,850 and also featured 10 focus groups from three regions—Charlotte, Chicago and Phoenix. “The project is perhaps the most far-reaching and comprehensive study of Country Music consumer attitudes and behavior ever undertaken,” said Brian Philips, President of CMT and a member of CMA’s Board of Directors. “The broad sample of more than 7000 consumers gives it statistical reliability we haven’t seen before.”

The study was conducted by Leo Burnett Company and Starcom MediaVest Group using proprietary BrandProspect Segmentation techniques. The CMA Consumer Research Committee was chaired by Joe Galante who, together with other CMA stakeholders, was instrumental in helping to design and fine tune the study’s mission. “We intend to present the findings in a very direct way and continue to respond to changes in the marketplace,” said CMA CEO Tammy Genovese. “We want our constituent groups to fully understand the challenges we face and have a clear vision of what needs to be done to find and engage our consumer in a way that will help build a base of revenue.”

CMA will provide the complete CRS presentation on the CMA member Web site, where CMA members can access the presentation and audio files with their member password. Information will also be included in CMA’s bi-monthly member publication CMA Close Up, beginning with the April/May edition.

The Key Findings presented below are from a CMA press release. Music Row will present its own analysis and questions based upon this data early next week.

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Country Fans—Core & Low Funding
[CMA Press] Approximately 2 in 5 American adults ages 18-54 (39.6 percent) qualify as “Country Music Fans,” as defined by the study. These individuals further split into two major groups based on current and potential revenue contribution: a small group or “Core,” who account for the vast majority of Country Music spending; and the larger group “Low-Funding” who engage heavily for free in the Country Music pipeline, but represent future revenue growth potential.

“The ‘Low Funders’ don’t spend a lot of money, but they do spend a lot of time with Country Music,” Jana O’Brien (former EVP, Chief Consumer Officer for Starcom MediaVest Group and current Principal for The Right Brain Consumer Consulting, LLC) explained.

For the most part, they are who you think they are. Demographically, The Core Country Music user is “a bit” more likely to be Caucasian and from smaller towns. They skew slightly female, but there is no significant age or income difference from non-Country Music users.

What does distinguish them from Poor Prospects is a blend of attitudes and behavior across three key dimensions: Affinity (“I like it”); Engagement (“I consume it for free’); and Revenue (“I buy it”).

When it came to “Affinity,” consistently across ages and genders, County Music and some form of rock music were the genres the subjects of the study would not want to live without. Country was favored because of the relevance to real life and universal truths; appropriateness for the family; buddies, BBQ, beer, dancing and fun; the outdoors; and its staying power and enduring appeal.

All genres can be mapped perceptually. In perceptual research, Country Music owned an area characterized by meaning and virtue. Rock on the other hand, is largely perceived as provocative and music-based. This helps explain why Country and rock were “can’t live without” formats for the Country Music core.

A key learning from this data was that it was important to present new artists in a manner that illustrated their personal ties and commitment to the essence of the genre in order to connect with the people who buy the records and concert tickets in a very tangible and sincere way.

Both qualitative and quantitative revealed a clear hierarchy of engagement in Country Music across predominantly free media pipelines with radio at the top, followed by television, Internet, and print. With 79 percent of Country adopters listening to Country radio it is the pinnacle Country Music connection with an average of more than 24 hours spent listening each month.

They know what they like, and don’t like. They like the “free” nature of the medium. They appreciate that it is family-friendly and acceptable for all ages. They like the mood enhancing, energizing quality of the music. And, in general, DJs are a plus. But there are minuses, too, including radio’s perceived repetitiveness and limited song list; the general lack of identifying the artists was a frustration; and the number of commercials led to channel surfing or switching to CD or iPod listening.

An aggregate 81 percent engage in one or more TV pipelines to find Country Music, but spend less time doing it – 13 hours a month versus 24 for Country radio. Popular choices include CMT (53 percent); the CMA Awards (48 percent); the ACM Awards (40 percent); GAC (27 percent); and “Nashville Star” (25 percent).

The Internet is reshaping the media habits of Country Music users and consumers with Web access. The key to online engagement is access – for those 71 percent of those who have it, the Internet becomes the central medium. Not surprisingly, younger Country Music enthusiasts are much more likely to have a digital Country Music engagement focus and will undoubtedly carry this tendency into their future years.

Like their interests, the dollar of the Country Music user is spread across a range of revenue sources. The largest percentage still purchase CDs (54 percent). Among Country consumers ages 18-54, 65 percent are “CD-dominant” and 35 percent are “Digital-dominant” based on total Country Music acquired. And once they become “Digital-dominant” Country Music acquirers, they contribute very little CD revenue.

Digital-dominants pay for less than half of the Country Music they acquire with far more unpaid acquisition via CD ripping versus illegal downloads. The percentage of Country Music volume paid for by Digital-dominants is 38 percent, compared to 67 percent for CD-dominant users. Currently CD copying (piracy) is more prominent than illegal downloads. Thirty-eight percent have borrowed a Country CD to copy compared to 23 percent who have gotten free downloads. “They look at copying CDs as ‘sharing’ not ‘stealing’,” O’Brien offered.

Overall, 1 in 4 Country Music supporters attended a Country concert in the past year, which translates to 11 percent of the US adult population ages 18-54. They see it as the “best way” to experience the music. They believe it deepens the artist/fan relationship. There is a strong interest in cross-genre concerts with Country and rock. On the negative side, they felt “ripped off” by the price of merchandise and they were frustrated by unknown or hidden fees that increased the cost of the concert-going experience.

Poor Prospects
So, who is not a fan? There are three types of “Poor Prospects” that account for 60.4 percent of the American adult population ages 18-54:
1.    Disengaged Gift Givers (7.9 percent), who dislike Country Music, but sometimes give it as a gift to people who like it
2.    Music Rejecters (34.5 percent), who are not engaged with music of any kind
3.    Country Music Rejecters (18 percent), who are engaged with music, but dislike Country Music

“Don’t waste valuable financial resources or time on this group,” said Carol Foley (EVP, Director of Research Services for Leo Burnett). “We encourage you to write off the ‘Poor Prospects’ because this group is the least likely to become Country Music consumers capable of generating future income for the industry.”

The industry’s “bread and butter” is the “Core.” They are music lovers who drive extensive revenue and they can be divided into two groups: CountryPhiles and MusicPhiles.

CountryPhiles
CountryPhiles skew slightly female (54 percent) versus the average American adult, they are more likely to be married, Caucasian and from small towns. They are passionate fans of Country Music. They appreciate the core values of the format and the artists. And, their commitment translates to both significant engagement time and industry revenue. “Protecting and more fully leveraging this group should be the Country Music industry’s top priority, because even small erosion among this group has substantial negative revenue implications,” Foley said. “The good news is that they are not entirely drained as a revenue stream and the study revealed opportunities to generate more engagement.” They engage with many Country Music portals, but less with digital. Only half have home Internet, but many access the Internet elsewhere – at work or away from home. There were three key reasons driving lack of home Internet access: the cost, they had no interest/or need, and their inexperience or content concerns. Fifty-eight percent of this group did claim that they want to have Internet connectivity in the near future. This group accounts for a major proportion of total Country Music related media hours – especially with radio (33 percent). CountryPhiles claim Country radio as the No. 1 vehicle for introducing new Country Music. They are very CD/album oriented and are willing to pay for music. More than half (55 percent) believe you really miss something when you only purchase songs rather than the whole CD by an artist. Fifty-six percent believe it is important to support the artists they love by paying for their music.

MusicPhiles
MusicPhiles skew male (55 percent) versus the average American adult, they are younger, more diverse (especially Hispanic) and more urban. They are extremely hip, high tech, engaged music lovers who happen to include Country Music in the mix. “They like it, more than they love it,” O’Brien said. MusicPhiles are “music ambassadors” who spend as much or more on buying Country Music CDs for others as for themselves. Though heavily involved with all sorts of media, they are not as deeply engaged with Country radio, TV or Web. In contrast to the CountryPhiles, they are much more tech-savvy and digitally focused. They have large CD and digital libraries and their Country Music collections exceed those of CountryPhiles. While they spend less time with Country radio than CountryPhiles, they still cite it as their No. 1 source when it comes to discovering new music.

MusicPhiles and CountryPhiles collectively contribute a significant amount of money to the format, so it was important to look at the impact of current economic conditions on these two Core Country Music segments with additional research conducted in November.

Economic Factors
Nearly 9 in 10 CountryPhiles have negative perceptions of the overall state of the economy and 6 in 10 express personal financial challenges. Versus total American adults, MusicPhiles are less intensely negative about the overall economy, and fewer (51 percent vs. 59 percent) express personal financial challenges.

More than half of CountryPhiles claim they are already spending less on Country Music as well as many other discretionary items.
“We do not see this trend reversing anytime soon,” O’Brien said.
With that in mind, it is important to maximize and grow the potential spending of the “Low-Funders.” There are five distinct types of people who have a strong Country Music affinity and a fair amount of engagement, but who fail to generate much revenue:

1.    Today’s Digital: have some potential to engage with digital content, but are resistant to traditional media and to revenue of all types
2.    Today’s Traditional: CountryPhiles in training. This group just hasn’t made the revenue commitment, yet
3.    Classical Digital: Men, very into gritty rock-influenced, classic artists. Operating almost entirely online with weak revenue
4.    Classic Traditional: Older and fixated on classic artists. They are feeling “left behind.” They spend time with traditional media, but are having declining revenue behaviors because of the impression that there is nothing left to buy
5.    Pop Country: Very urban, responding to new, female, pop-leaning Country artists. MusicPhiles in training.

Obviously, “Today’s Traditional” and “Pop Country” groups have better revenue growth potential than the other three.

Implications
The implications for CMA and the Country Music industry are clear. The Core Country Music target is small (7.6 percent), but dedicated and a huge revenue generator for the business. They account for a major proportion of Country radio listening and they feel and crave a strong connection to the format.

The Low Funding segment is a much larger consumer base (36 percent) with potential growth. They are listening to radio online and offline and are notable and diverse in their unpaid engagement with Country Music.