uk live music industry 2011

UK Live Music IndustrySeptember 2011

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Contents...1. Music Business

2. Who Attends Concerts

3. Media Consumption

4. Social Media

5. Discovery

6. Insiders View

7. Ticketing

8. Platforms

Contents

Music Business

Power Shift

“For years record companies have had it all their own way but that’s changing and we have to change with it”Ged Doherty, Head of Sony BMG

“Now it’s a more balanced business where you have records, TV shows, merchandise, touring revenues and so on”Jean-Bernard Levy, CEO of Vivendi (parent company of Universal Music Group)

The average hard drive contains over 8,000 tracks (approximately 17 days worth of music)

95% of music downloads are illegal

35-40% would rather put up with free, ad-interrupted streaming services than pay for ad-free

Top 100 selling albums in 90’s accounted for 30% of sales, today its closer to 5%

Sources: IFPI, Digital Music Report, Mintel Digital Trends Report, Wired

Commoditisation

46 million visits to music concerts in 2010, up by 29.2% since 2005

82% increase in number of gigs

35% increase in attendance

59% are more excited about seeing a band live than listening to albums

70% attend for the atmosphere as much as the music

“We talk more about music experiences rather than music itself”David, 24

Sources: TGI, Mintel Music Concerts & Festivals, EMR, Digital Music Survey, Carling Music Survey

Live Explosion

59% of people attended a festival in last 3 years

700+ festivals in 2010

28% of festival are held in July

21% of these are located in the South West.

Increase in size of festivals:Bestival - 55k up from 10k in 2004Glastonbury - 180k up from 100k in 2000

More than half of Benicassim tickets sold to Brits

Sources: Mintel Music Concerts & Festivals, Your Music Entertainment, BBC

Festival Fever

Top 100 US tours were down 17% to $965.5 million, lowest since 2005.

Shows (and in some cases, whole tours) have been cancelled by acts such as Christina Aguilera, The Eagles and Limp Bizkit

Live Nation has discounted more than 700 shows by up to 25%.

The average cost of a ticket for a music concert at NAA venues in 2009 was £44.59, an increase of 11.9% on 2008.

Sources: Pollstar, Mintel Music Concerts & Festivals, National Arenas Association, PRS: Adding Up The UK Music Industry

Burst Bubble?

Summary

Power shift from organisations to the consumer

People are increasingly discerning and adventurous

Atmosphere is the one thing you can’t replicate for free but it is a very crowded market place

Fans are looking beyond UK, possible new revenue streams and potential partnerships outside of music e.g. airline tickets

A perfect storm of reliance on live revenues, increased ticket prices and recession may be about to burst the live music industry

Possible messaging opportunity, facilitating fans attending concerts even when money is tight

Who Attends Concerts?

60% of 16-24 year olds would rather go without sex than music for a week.

48% of 15-24 year olds have been to a festival or concert in last 12 months

People from the pre-/no family life-stage are the most likely to visit all types of music concerts except classical

Much more likely to: Come from ABC1 backgroundRead broadsheet Have reached higher education

Sources: Mintel Music Concerts & Festivals, TGI

Youth Audience

Around two thirds of people who visit music concerts and festivals...

Visit just one genre

Sources: Mintel: Music Concerts & Festivals

Tribalism

Strong correlation between festival visitors and visiting other types of music concert

Rock/indie concert-goers correlate most highly with festival goers

Also more open to different types of concert e.g. pop, dance, rap etc

Heavily concentrated amongst 15-24-year-old males

Sources: Mintel: Music Concerts & Festivals

Festival Goers = Hardcore

Sources: Mintel: Music Concerts & Festivals, PRS

Revenue By Region

21%

19%

15%

14%

11%

8%

6% 4% 2%

LondonSouth EastNorth WestMidlandsScotlandSouth WestNorth EastWalesNorthern Ireland

37%

21%

19%

11%

11%

1%

Sources: PRS, Mintel Music Concerts & Festivals, EMR Digital Music Survey

Club Regularly vs Gig Regularly- 35% vs 9% go weekly- 5% vs 32% go less than monthly

Venue Type

ArenasMid-levelFestivalsStadiaClubsParks

Summary

Key audience = 16-24 affluent males

Little cross over in terms of genre

Leveraging existing fan communities and social networks will be key as difficult to draw in casual fans

Festival and rock/indie fans offer widest reach in terms of attendance and number of genres

Focus marketing activity around London, North and Festivals

Media Consumption

Squeeze 31 hours of activity into one day

26% of their time is spent on multiple media

They consume more hours of media a week than they get sleep

Over a third of consumers aged 16-24 are classified as Early Adopters of technology, compared to 12% of the total population

Sources: Channel 4: Youth Marketing Just Got Useful, Mintel iPhone Generation

Multi-Taskers

88.4% of 16-24 year olds deemed as heavy user of the internet

75% go online every day

Computer is their main entertainment hub

Most popular internet activities (last 3 months)88% Email 80% Social Network78% Watch video content77% Listen to music for free74% News sites

Youtube has greater reach than Facebook 77.8% vs 65.2% over 3 month period

Sources: TGl, Mintel: Digital Trends Report

Digital Life

Free Loaders

‘Access to all areas’ mentality

And a real reluctance to pay for media content

Less interested in tangible formats (music, news, magazines, TV, video, podcasts and mobile apps)

More likely to be male than female

Sources: Mintel Digital Trends Report

Broadcast

16-24 year olds: - watch less television- listen to less radio- read less newspapers and magazines

However they still reach big numbers

Cinema is experiencing something of a revival

90% have visited the cinema

38% going at least once every month

Sources: TGl, Mintel Digital Trends Report, ABCe, Ofcom

97% of 15-24 year old consumers own a mobile phone.

37% of young consumers owning a smartphone

71% of smartphone owners in the UK have downloaded an app

20% 16-24s listen to music online through a smart phone

The mobile internet has become synonymous with Facebook access

Sources: Ofcom, Youth TGl, Mintel Digital Trends Report

Mobile

Summary

Experts at filtering information

Media consumption in consumers aged 16-24 is largely dictated by the pace of technological innovation itself, so need to be ahead of the game not merely reacting to it

Digital channels, mobile and cinema offer best route to audience

Mobile integration will be key to any success as lowers the boundaries from recommendation to purchase

Social Media

STRONG TIES

4-6 independent groups of 2-10

Communication is concentrated around 5 strongest ties.

Only regularly interact with 4 to 6 Facebook friends

80% of phone calls to the same 4 people

80% of Skype calls to the same 2 people

Online gamers usually play with strong ties

WEAK TIES

Friends of friends and can reach big numbers.However, we can only keep up with 150 people

FriendsTEMPORARY TIES

150 - Dunbars NumberWhen social groups begin to break down

Seen in ancient villagesRoman armies

And even social networks

Communication

One to one. One to some. One to many. Some to some. Some to many

Many people use email for private exchanges

4 reasons people update status - shape how others perceive them- maintain and grow relationships - share content - source information

No such thing as ‘the’ influencer

Much more complicated

Duncan Watts (Yahoo! Research) found that when choosing new music, knowing what music other people listened to was far more influential than whether the music was of high quality. He found that the music people downloaded was the music that other people had downloaded before them.

Influence

People care about what they look like

Collect badges, friends, followers and titles

Drive trail/participation

Establish advocacy

Maintain loyalty

Help me build trust in someone

The Game

Sharing

Content is king

Photos, videos etc

Groups, likes, retweet, status up dates

News and information

Privacy is key to build trust

FriendsMark Granovetter, The Strength of Weak TiesBuddy Brain Drain, New York PostConnected, Christakis & FowlerFacebookusagewatch.org

CommunicationProfiles as Conversation, BoydAddressing Constraints, GrossMintel Digital Trends Report

InfluenceConnected, Christakis & Fowler6 Degrees, WattsThe Tipping Point, GladwellIdentifying Influential Spreaders in Complex Networks, Researchers at Universities in the USA, Sweden and IsrealEffects of Word of Mouth Versus Traditional Marketing, Trusov, Bucklin, Pauwels

The GameI rate you, you rate me. Should we do it publicly?, University of MichiganTrust and Nuanced Profile Similarity in Online Social Networks, GolbeckStrategies and Struggles with Privacy in an Online Social Networking Community, Strater and Lipford

Sources

Key findings

‘Friends’ are not one homogenous group and the way they interact can vary wildly

Social media key to trial, advocacy and loyalty

Go beyond the cash incentive to earn it e.g. reviews, recommendation, photography, video and social competitiveness/rewards

Discovery

Sources: Human Capital: Youth and Music Survey

0

20

40

60

80

100

6763

49

2118

17

14

RadioFriends

Music TVPrint Media

TV ShowsMusic Mags

Blogs

Where would you say that you usually find out about new bands/artists that you like?

Sources: Human Capital: Youth and Music Survey

0

20

40

60

80

100

38

1515

8

44

1

YoutubeMyspace

Band SiteFacebook

NMELast.fm

Blogs

Where would you say that you usually find out about new bands/artists that you like?

Social

‘friend’ a band on Facebook and be alerted to their gig, just as you would a birthday

56% heard of festivals by word of mouth

48% used community websites

Sources: Association of Independent Festivals

Why People Don’t Go

60% of 16-24 year old concert / festival goers would go more regularly if tickets were less expensive

“Nearly 35% of [ticket] inventory goes unsold and if you ask fans why they didn’t go to shows, one of the more popular reasons is ‘I didn’t know about it.’”

Sean Moriarty, former CEO of Ticketmaster

Sources: Mintel Music Concerts and Festivals

Filling The Void

Sites such as Songkick exist purely to inform music fans who register with it of forthcoming concerts and tours.

Summary

Ironically with so many methods of discovery fans are finding it hard to keep track of their favourite bands

Investigate partnerships / integration with: - Recommendation services- Youtube- Radio stations- Social networks

Ticketing

Buying Tickets

Online accounts for approximately 80% of total sales.

80% of young consumers would be interested or very interested in using their mobile phone to pay for products.

Sources: Mintel Online Booking and Ticket Purchasing, Alcatel-Lucent

42% to get an online discount

Sources: IPSOS, Mintel Online Booking and Ticket Purchasing

34% because it could only be booked online

20% were already online comparing prices

14% clicked through from email newsletter

12% were sent a link by a friend or family member

11% read a review, then clicked through to book

3% saw a post or photo on friends social network profile

Why Online?

83% find online more convenient

79% only trust well-known sites for buying tickets

72% are confident that online transactions are secure

64% say a poor website would put them off a venue

58% are more confident about getting popular tickets

50% are more likely to book if there are photos

30% are more likely to book if there are videos

Attitudes To Booking Online?

Sources: IPSOS, Mintel Online Booking and Ticket Purchasing

Trust

Secondary operators marketing strategy has been built on promoting its consumer protection initiatives.

51%of online shoppers said social media had influenced their online purchasing activities in the past.

74% of these people said reading a negative comment influences their likelihood to do business with the company with

56% said they avoided a particular vendor after reading bad reviews.

52% saying they used a particular vendor after reading good reviews.

Sources: Mintel Online Booking and Ticket Purchasing, Tealeaf

Secondary Market

Almost 500,000 people have been ripped off by ticket scams in the last year to the tune of £30 million.

One in seven people who buy a ticket to a live event is ripped off by a fake website.

70% of scams relate to live music events.

Sources: Viagogo, Metro, Mintel Music Concerts and Festivals

Summary

Online is perceived to offer a better deal and convenience

But has issues with trust, especially for a new platform

Trust can be built through design, user experience, peer recommendation, partnerships and leveraging background of credibility of boards

Insiders View

“… social networking has changed the terms of how we and artists can engage with their fans/ticket buyers. Announcements can be instant and we can run specific pre sales just to facebook fans. People can also ‘complain/engage’ with us directly and for certain events such as festivals we can find out opinions on line up/artists.”

Julie Morgan, Marketing Manager, SJM Concert Promotion

Game Changer

“Make it as simple as possible, one click solution... Give incentives. If done properly, they do the work for you.”

Toby Peacock, Head of Global Project Management, [PIAS] Entertainment

(Seasick Steve, Grace Jones, Royksopp, Vitalic)

Get To The Point

“If there is no buzz - create it - be innovative and make people think there is a buzz even if there isn’t - tease people - make people go - what the fuck is that? People like to think they know everything and when they don’t it fucks with them.”

Caroline Reason, CAA UK, Booking Agent (Blur, Beck, Radiohead, 50 Cent, Yeah Yeah Yeahs)

Create Noise

“Bands like Mumford and Son do all their own direct to fan gig promotion and only release tickets to the general public if they can’t sell all their tickets in house first.”

Jon Slade, CEO, Elastic Artists, Booking Agent (Animal Collective, Diplo, Black Lips, Flying Lotus)

Loyalty

“Online ads, Facebook ads, national and regional press, in that order”

Ed Millett, Hear No Evil, Artist Manager (Guillemots, Ray Davies, Penguin Prison,

Fyfe Dangerfield, Sparkadia)

Spend Prioritisation

“Not really too expensive and intrusive”Oli Issacs, This Is Music, Artist Manager

(Simian Mobile Disco, A-Trak, Little Boots, Annie Mac)

SMS Marketing

Summary

Social media has allowed fans to engage with the acts they love

Artists and promoters can interact with fans and build stronger relationships

People want ‘one-click’ solutions

Incentives can help pull people over the line

Can’t just rely on the music / artist to get people talking

There are different ‘levels’ of fan and they need different approaches

A trend for artist going straight to their fans to sell tickets has started organically

Ticketing

Number 1 ticketing site in UK with a strategy built around exclusive deals with venues January 2008 purchased of Get Me In! for a fee in the region of £50 million.

January 2010 merged with Live Nation to create Live Nation Entertainment.

Established an 83% market share in US ticket sales by acquiring seven of its rivals and whose biggest client was Live Nation.

Sunday Times investigation found that attempts to buy tickets for Lady Gaga and Kylie Minogue tours on Ticketmaster were directed to Get Me In!

Ticketmaster

Sources: Mintel Online Booking and Ticket Purchasing, Review Centre,Company Accounts, ComScore

4.58 million visitors PCM

2.3 million unique visitors PCM

30% market Share

7.7 average minutes per visit

2010 turnover £77.8 million

10% growth vs 2009

Review Centre Av. Rating - 1.8 (out of 5) from 115 reviews


Ticketmaster


See Tickets claims to currently be selling in excess of 9 million tickets per annum in the UK with gross sales exceeding £240m per annum.

In 2007, it famously sold 137,500 tickets for the Glastonbury Festival in 1 hour 45 minutes.

Four strands:1. Traditional ‘pure play’ agent2. Web-based self-service offering 3. Provision of box office systems4. Ticket management facilities to venues and promoters who prefer to do their own selling.

See Tickets

1.9 million visitors PCM

1 million unique visitors PCM

12.7% market Share



11% growth vs 2009



See Tickets


UK-based secondary seat exchange allowing fans to buy and sell tickets amongst each other for live sport, concert, theatre, opera and other events.

‘Tickets for true fans. Guaranteed’

FanGuard Guarantee - a pledge that buyers will receive the tickets ordered (comparable or better) in time for the event, with a refund if the event is cancelled.

In the event that these terms cannot be met, buyers receive a 100% refund plus a 50% credit towards any future purchase.

Prices being charged for tickets on Get Me In! attract criticism

Get Me In!

565,000 visitors PCM

411,000 unique visitors PCM

3.7% market Share



11% growth vs 2009



Get Me In!

Viagogo is a secondary ticket exchange offering buyers and sellers a trusted and secure platform for trading of tickets supported by a guarantee.

Adopted a strategy of becoming the official secondary ticketing partner with major names in the entertainment field; such deals have been done with Manchester United, Madonna, Isle of Wight Festival, Festival Republic and IPC Media (NME)

Signed a deal with the Nectar loyalty programme whereby Nectar customers buying tickets on Viagogo earn points

Viagogo




4.1% market Share




Viagogo


Claims to be “Europe’s largest online fan-to-fan ticket exchange” with more than 1 million tickets on sale at any one time.

TicketIntegrity, which guarantees that buyers will receive the tickets they ordered in good time for the event or, failing that, they receive a 100% refund

TicketCover, which provides a full refund if an event is cancelled

White label arrangements, providing exchange site which is then rebranded by its client e.g. hmvtickets

Signed a revenue-sharing promotional deal with MTV under the terms of which MTV.co.uk promotes tickets for gigs and festivals from within news and features throughout its site

First ever ATL campaign in 2010

Seatwave



3.8% market Share


2010 €5.2 million



Seatwave

At its heart SongKick aggregates ticket prices. Tracking every venue, including small

ones, for all types of music except classical.

Recently raised $1.8 million in its 4th round of funding. This latest round of funding puts SongKick's fundraising total at just under $7.5 million.

SongKick have not released any official traffic figures but claim expansion of 20% a month, which they say will make them larger than Ticketmaster in about a year. Believing they can easily become a high traffic site with more than 60

million unique visitors per month.

The site also collects reviews of concerts and has an archive section which carries

details of concerts 20 or thirty years ago. People upload photos, video, and setlists.

Deals include Youtube and Vevo links to corresponding pages on

SongKick as well as with Yahoo search where they add value to its music searches.

Sources: Wired, Paid Content, Mashable, Silicon Valley Watcher, Read Write Web, Social Beat

Songkick

http://www.crunchbase.com/company/songkick

http://www.crunchbase.com/company/songkick

Summary

Two strategic approaches:

1. Exclusivity

2. Trust

Platforms

PR and Partnerships• July 2009 – iPhone and Android app released• October 2009 – 3UK/HTC partnership starts mobile UK offering• November 2009 – Symbian app released for Nokia, Samsung, Sony phones• April 2010 – Facebook connectivity, music sharing between friends and music management improved. • May 2010 – Ad free, paid subscriber service launched • September 2010 - Sonos partnership brings Spotify access to home hi-fi• October 2010 - Windows Phone app launch• January 2011 – Logitech partnership for more home hi-fi access• January 2011 – Shazam partnership delivers ability to play and buy track after tagging in Shazam apps.

History1) Company started in 2006. No labels on board until 2008. 2) 2009 less than 10% of users were premium subscriber with 50% growth rate, month on month3) February 2011 still not launched in the USA. Signed with EMi and rumoured to be close to deal with Warners.4) Still running at a loss, but valued at $1bn. 5) February 2011 – Spotify reaches 1 million paid subscribers.

Criticisms• Independent record labels are threatening to leave the platform over lack of royalties vs majors • Royalties negotiations with the majors are covered by NDAs

Overview: The premier European audio streaming platform. Soon hoping to launch in the USA. Strapline: All the music, all the time. Paid Subscribers: 1 million

Overview: Last.FM is a personalised music recommendation service based on the music they play on their PC, mobile device or blog siteStrapline: Need New Music?Monthly Unique Visitors: 5 million

PR and Partnerships• Scrobbler written for connectivity with almost every PC based audio player, all major mobile platforms and

many blog pages. • February 2008 Hype Machine Scrobbler released and marketed on both websites. Interconnect of user

profiles between the sites possible. • December 2008 Scrobbler incorporated into Spotify software.

Features• Creates user profiles using “The Scrobbler”, a small application that tells Last.FM what songs you are playing

on your computer or mobile device. • Recommendations are based upon play data collected by the Scrobbler. • 2010 US user base generated about 1,000 pieces of track data per second.

History1) Complete redesign in 2008 after CBS purchase. CBS press release claimed a 20% increase in traffic. 2) More than 3.5 million tracks available to stream on-demand

18million tracks scrobbled per day3) Free streaming policy ceased in 2009 in all countries except the UK, USA and Germany. Subscription fee

in all other countries in place at €3 per month. 4) 2009 financial year saw company move much closer to profit, going from a £17m loss in 2008 to a £2.8m

loss, with 55% of revenue generated from the UK market and 33% from the US market.

Overview: Apple’s opening shot into social networking in conjunction with their iTunes. Initially lacking many of the expected features, Ping has improved it’s feature list steadily since it’s launch.Strapline: A Social Network for Music. Monthly Unique Visitors: Official numbers unavailable but some suggest only about 1 million

Features• Users can follow favourite artists. • Artist’s recommendations and likes listed in their profile. • Like and Post buttons available at point of sale within the iTunes store.• Artist feed for status updates, photos etc.• Users can see what friends and other fans have been listening to.

PR and Partnerships• Permanent presence on the iTunes stores. • Status updates feed Twitter stream.• Concert information provided by Live Nation.

Criticisms• Lengthy signup process.• Difficult to connect with friends – no Facebook integration. Initially no contact import facility (eg with Gmail

address book) but that has now been rectified.• User’s taste in profile limited to three genres• Flawed recommendation engine• Initially a lack of artist pages even for relatively large artists

Overview: Tracking handpicked music blog sites and then distilling the trending of new music, aggregation of comments and creation of a community Strapline: NoneMonthly Unique Visitors: 250,000 – 300,000

Features• Where possible, all tracks available for preview on the website are also linked to the major digital music

retailers – iTunes, Amazon, eMusic. Hype Machine’s commission is their primary revenue source. • Integrated with Twitter, Facebook, Soundcloud, Last.FM, Songkick.com• Re-promotes the blogs that are it’s sources as banner ads on the site.• Users can view their friends listening histories. • Has an annual summary in it’s Zeitgeist section.• Planning iPhone application.

PR and Partnerships• Soundcloud partnership to facilitate label and artist to supply pre-release material to bloggers.• Last.FM Scrobbling enabled for registered users. Promoted on banner ads.

Criticisms• Some industry players have criticized it for making it easier to download music for free.

History• 2007 – Profiled on CNN, Wired, The Guardian• 2009 – On 100 Essential Websites list in The Guardian. • 2010 - Began Soundcloud partnership to allow labels and artists to service bloggers with new and pre-release

tracks eg Warpaint, Lykke Li, The Dears.

Overview: A website that connects fans to the tours of their favourite artists. Strapline: None Current Monthly Unique Visitors: 100,000 +

Features• Imports favourite artists list from your Last.FM or Pandora profile. • Facebook app for increased social networks integration. • Their API allows connection through iTunes, Last.FM and Pandora. Concert listings can then be filtered by

artist, location and date and other recommendations made based upon the user’s artist preferences. • iPhone app – scans users iTunes library and in combination with the phone’s GPS functionality, sends

concert notifications and recommendations to them. Not available in the UK (??)• Alerts based around favourite artists, favourite venues, friends gig activity. • Distills Twitter feeds, capturing tweets about local shows of favourite artists so users can “experience” the

concert. • Has the largest database of upcoming concerts in the world (Music Week 13 August 2009)• Affiliate program allows 50% of ticketing revenue received by Bandintown from third party users goes to host

website. Current partners include HypeMachine, TuneGenie, Pure Volume and Absolute Punk.

PR and Partnerships• Facebook, Last.FM partnership links user profiles to tour information. • Partnerships with 60 ticket providers in 140 countries – Ticketmaster, Stubhub et al

History• March 2009 – launch API for integration into other music sites. • May 2009 – Google Trends traffic listed as approx. 750k Monthly Uniques• August 2009 – iPhone app launched that integrates GPS data for local gig recommendations, and also site

redesign and Twitter integration. • August 2009 – 30,000 registered members, 500k+ unique monthly visitors.• September 2009 – Affiliate program launched to share ticketing revenue.

http://www.tunegenie.com/

http://www.tunegenie.com/

http://www.purevolume.com/

http://www.purevolume.com/

http://www.absolutepunk.net/

http://www.absolutepunk.net/

Overview: Nokia‘s “Comes With Music” was a short lived unlimited download service offered for selected Nokia handsets. The service was free for the life of the phone contract.Strapline: Comes With MusicMonthly Unique Visitors: N/A

Features • Major label content contained DRM except in China. • Users were able to keep their downloads after the first year even if they did not continue to pay for the service. • Piracy concerns meant that tracks could only be transferred between the handset and the user’s computer.

History • October 2008 – Launch party.• December 2008 – Tunebite software released that strips the Microsoft DRM from downloaded tracks.• July 2009 – Unofficial figures revealed the service only had 107,227 users across the initial nine countries it was launched in. • August 2010 – Rebranded as OVI Music Unlimited and folded into the OVI Suite offering. • 2011 – OVI Music Store Unlimited closed in 27 markets (remains in India, China and Indonesia).

Summary

Closed systems don’t thrive

Interface is everything

Unique if possible, extra special if not

Online doesn’t mean virtual

Music consumers are mostly not train spotters

uk live music industry 2011

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