The Consumption of Recorded Music in the Netherlands Pieter Frankefort

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The Consumption of Recorded Music in the Netherlands

Graduation Report

P. Frankefort

Student at NHTV Breda University of Applied Sciences,

International Media and Entertainment Management

Specialization: Production

May 2017

Abstract

The state of the music industry is not as it was twenty years ago. In this digital age where music has become easier to produce than ever before, resulting in a tyranny of choice, consumers crave experiences above all else, often in the form of live events. That is not to say that recorded music is not being consumed. While the industry has seen far better days in terms of profits, the consumption of music has never been higher. There is however still uncertainty within record labels such as Caroline, as to how people are currently consuming music. This descriptive cross-sectional survey research consisting of 277 male and female participants of the ages 13-64 addresses how consumers of different age groups differ in the consumption of music. The music consumption platforms and devices are investigated along with the music discovery platforms and reasons for listening to music. What resulted was a clear difference in music consumption platform between the young and the old, where the young favored the rising audio streaming services and the old traditional AM/FM radio. In terms of music consumption devices, Smartphones were favored among the young and radio among the old. Another notable result was found where the older people got, either the less their interest in music became or the more music consumption became a passive activity. Further research would have to be done to confirm this.

Table of Contents Abstract ...... 3 1. Introduction ...... 6 1.1 Problem Analysis ...... 6 1.2 Research Objective ...... 7 1.3 Industry Relevance ...... 9 2. Literature Review ...... 10 2.1 Music’s place in our society ...... 10 2.1.1 History of musical importance ...... 10 2.1.2 Reasons for listening to music ...... 11 2.1.3 Types of Music Consumers ...... 12 2.2 Music Consumer Behavior ...... 13 2.2.1 How people consume music ...... 13 2.2.2 How people discover new music ...... 16 2.2.3 What consumers do and do not value within music products ...... 17 2.2.4 What consumers are (not) paying for and (not) willing to pay for ...... 19 2.3 The current state of the Music Industry ...... 20 2.3.1 Market Structure – Traditional and Digital ...... 20 2.3.2 Music Saturation and the Blockbuster Effect ...... 22 2.3.3 Recent Trends ...... 23 2.3.4 Reasons for fluctuating music sales...... 24 2.4 Opportunities for the Music Industry ...... 25 2.4.1 Streaming Services...... 25 2.4.2 The Live Experience ...... 26 2.5 Summary ...... 26 3. Methodology ...... 28 3.1 Research Design ...... 28 3.2 Research Participants ...... 28 3.3 Measures ...... 30 3.4 Data Collection Procedure...... 30 3.5 Data Analysis ...... 31 3.6 Ethical Considerations...... 33 4. Results ...... 34

4.1 Age Group ...... 34 4.2 Other ...... 38 5. Conclusion ...... 42 5.1 Discussion ...... 42 5.2 Limitations ...... 44 5.3 Recommendations ...... 45 Bibliography ...... 48 Appendix ...... 53 A – Survey Dutch ...... 53 B – Survey English ...... 62 C – Result Tables ...... 69 D – Results Graphs ...... 72

1. Introduction

This research was commissioned by Caroline Benelux and took place between the 1st of February and the 23rd of May, 2017. Caroline Benelux is the Benelux affiliate of the Caroline International record company and falls under the Universal Music Group, where they provide resources for Caroline but allow the label to function independently. The Caroline label was revived by Universal with the purpose of functioning as a ‘nursery’ label, where small artists are signed and allowed to grow into potential mainstream acts under the supervision of Caroline. Caroline therefore mainly caters to relatively small scale artists seeking support in terms of marketing, promotion and distribution, to help them grow in popularity, riches and development as an artist. Examples of artists who signed onto the label and have prospered because of it include Childish Gambino, Oh Wonder, Tame Impala and Chef’Special.

1.1 Problem Analysis

Despite the most recent Nielsen report claiming 2016 to be a positive year for the business (Nielsen, 2016), poor sales remain an area of concern for Caroline Benelux and the music industry as a whole. Physical and digital music sales are now significantly less than they were before the rise of digitalization and piracy (IFPI, 2012). The industry was not able to adapt timely to this phenomenon (Happonen, 2016). Alternative solutions were not sought out and instead the focus was laid on prosecuting wrongdoers, often only making the situation worse (Wang & McClung, 2011). People would effectively retaliate against record labels and accuse them of being money hungry. While music remains a profitable business, many bands, labels, and record stores struggle to stay afloat financially with solely music sales (Campbell, 2015; Neilstein, 2016; Roberts, 2010). Before the rise of digitalization, this was an easier task, where a traditional market structure was applied (Wordpress Blog Arobinaday, 2012) and people had limited (free) alternatives to physically buying the album, be it on cassette, LP or CD. Digitization brought with it a much more streamlined digital market structure, allowing the music to go more directly from artist to consumer, although not always in a legal way. Piracy took an enormous toll on the music industry and came relatively close to making it a non-profitable business (Lalwani, 2015). Recent advances such as streaming services (Spotify, Deezer, Apple Music etc.) have proven to be successful amongst music consumers (IFPI, 2016). However, their ability to revive the music industry back to its golden days in terms of profits, while increasingly positive among industry professionals, remains uncertain (Nicolaou, 2017).

There is still uncertainty within record labels such as Caroline, as to how people consume music these days. To what extent have streaming services such as Spotify and Deezer taken over the industry? To what extent do people still commit piracy with music products? What do people value when it comes to music and (how) are they paying for what they consume?

More specifically to what Caroline, an indie label, would like to know is how people discover ‘new music’. ‘New music’ in this sense meaning music previously unknown to the consumer. This could be an artist they have never heard of or the new single of an artist already known to them. As an indie label, Caroline specializes in relatively unknown artists looking to grow with the help of Caroline. Larger artists such as Iggy Pop also choose to work with Caroline if they believe the ‘indie image’ to be beneficial for them. For both types of artists, getting discovered by consumers is extremely important. For this reason, Caroline is interested in finding out how people discover new music, be it through Spotify playlists, YouTube or magazines. The correct promotion techniques can then be used on the right platforms to promote new releases, live performances and catalogue items from Caroline roster artists.

1.2 Research Objective The primary objective of this research is to gain insight into music consumption in the Netherlands. With this insight, Caroline Benelux can apply the correct promotion techniques per platform to effectively increase sales.

If for example magazines and newspapers are primarily used to discover new music, then more resources could be invested into print advertisements. Or if the free desktop version of Spotify is largely used for music consumption, then investing more resources in Spotify Video-takeovers could be considered to promote new material by Caroline artists (Spotify, 2017).

Caroline currently uses multiple online and offline (traditional) promotion techniques to reach their audience. Promoting new releases (album/EP) for their roster artists is mostly the focus here however catalogue items (previous releases) and live performances can also be promoted. This is currently done via the following techniques:

• Spotify o Audio Takeover o Display Overlay • Facebook o Weekly Release Video o Live Performance Video o Give Away Competition o Banners o Music Video o Album Announcement o Tour Announcement o Shared Posts ▪ Album Review ▪ Radio Session • Magazine (OOR, Lust For Life, Soundz, Mania, Live Guide) o Dedicated full page advertisement o Back cover advertisement o Album Review o Artist Interview • Newspaper (NRC Next, NRC Handelsblad, Metro, Algemeen Dagblad, De Telegraag) o Album Review o Artist Interview • Point of Sale (Record Store) o Retail Poster o Retail Canvas • Radio (Radio 2, 3FM, Studio Brussel) o Session o Interview • TV (De Wereld Draait Door, Van Gils en Gasten) o Studio Live Performance o Studio Interview

Each Caroline roster artist has its own target age group, determined by analyzing the ages of its customers through multiple channels including Facebook (likes), YouTube (likes, subscribers) and Spotify (followers, listeners per month). For example, the band Van Morrison primarily targets the age groups 45-54 and 55-64 while the band Glass Animals primarily targets the age groups 13-17 and 18-24 (Kiesow, L. (personal communication, March 13, 2017)). How consumers discover and consume music is presumably different per age group. The following research question was therefore set in motion:

RQ1: How do Dutch consumers of Caroline Benelux’s music differ by age group in their consumption of recorded music?

To answer this question, other sub questions must be answered first:

S1: How do the primary platforms for music consumption differ per age group?

S2: How do the primary platforms for music discovery differ per age group?

S3: How do the primary devices for music consumption differ per age group?

S4: How do the primary reasons for consuming music differ per age group?

1.3 Industry Relevance Gaining insight into music consumption in the Netherlands is of great interest to the music industry. With technology changing fast and changing the way consumers consume and perceive music, understanding the consumer and the reasons behind their behavior is key when coming up with new services or re-thinking old ones (Happonen, 2016). It is also key for knowing on which platforms to market and to what degree. What the industry has only recently begun to realize is that the consumer is king and that researching and adapting to their desires will bring salvation.

2. Literature Review

2.1 Music’s place in our society

For as long as mankind has formed communities, music has been a part of human history. Just as every known culture on earth has implemented music in their society, so do we find it everywhere in ours (Bordowitz, 2007). Music is after all, experiential and fundamentally social – it is socially constructed, socially embedded and its nature and value are inherently social (Bowman, 1998).

2.1.1 History of musical importance Before music could be recorded, it was a purely live experience, performed in Greek theaters, Chinese courts and Roman Catholic churches to name just a few. It was when technological advancements allowed music to be recorded that it also became a commercial product detached from the artist and vulnerable to infringement of intellectual property.

Music as a product has evolved throughout the years developing layers upon its core product of entertainment, emotional/aesthetic pleasure, symbolic representation and social cohesiveness. A certain artist or genre defines the actual product of music for many consumers while aspects such as lyrics, cover art and paraphernalia serve as its augmented product.

Figure 1. Core-Periphery & Augmented Product Model (Keller, 2003)

As more and more technological advancements were made, so too could music be enjoyed in new and more convenient ways, inevitably changing consumer behavior with music products, for better or for worse. Today we consume music in five different forms: Physical (CD, LP), Digital Download (iTunes, Bandcamp, illegal), Streaming (Spotify, Deezer, Apple Music, YouTube, Soundcloud), Radio (Traditional, Web) and Live (Festival, Concert). But while the behavior of music consumers is now very different than it was say thirty years ago, the basic reasons for music consumption have remained the same.

2.1.2 Reasons for listening to music According to Schäfer, Sedlmeier, Städtler and Huron (2013) there are three universal reasons why people have and still do listen to music, proposing to call these reasons ‘The Big Three’. These reasons are to achieve self-awareness, social relatedness and mood regulation (arousal). However, it is no secret that new digital technologies have transformed the consumption of music, making it cheaper, more accessible, convenient and portable, and thus enabling new music consumption practices. This stimulated Lonsdale and North (2011) to re-examine the reasons for listening to music. They conclude that these reasons are to:

❖ Cope with, and alleviate negative feelings, and also to create and optimize a positive mood (Mood Management) ❖ Construct and/or present a social image to others (Personal Identity) ❖ Find out about and learn what is going on in the world (Surveillance) ❖ Distract themselves in order to relieve boredom or pass the time, escape or relax (Diversion) ❖ Engage in music regardless of musical ability, by singing along or dancing (Musical Participation) ❖ Remember and reminisce about happy times and loved ones (Reflect on the Past)

Researchers Chamorro-Premuzic, Bennett and Furnham (2007) suggest all reasons for listening to music to fall under affectionate listening (emotional), cognitive listening (analytical) and background listening. While the six reasons for listening to music by Lonsdale and North (2011) could justly fall under affectionate and cognitive listening, background listening is not mentioned.

2.1.3 Types of Music Consumers It is important to evaluate what a music consumer entails. According to O’Reilly, Larsen and Kubacki (2013) “a music consumer is someone who participates in economic exchange in order to take ownership and gain the right to access music.” This would therefore exclude groups such as ‘pirates’ – “A person who appropriates or reproduces the work of another for profit without permission, usually in contravention of patent or copyright.” (Pirate, 2017) Music consumers may subsequently be framed into three categories: Audiences, Fans and Collectors (O’Reilly et al, 2013).

❖ Audiences - Audiences come together to engage in music for numerous reasons. The most significant of which is the sense of community and belonging which can be brought about by sharing an intense experience (Kozinets, 2002). This can result in ‘flow’ experiences (Csikszentmihalyi, 1990) where people lose themselves through full immersion in an absorbing experience. ❖ Fans – “The music fan is someone with a focused interest, who is highly engaged in a particular type of musical product, and who has developed a special type of relation with the object of their admiration” (Thorne, 2011). The idea of fandom brings with it a collective aspect which often manifests as a subculture such as the classic punk, emo or since recently hipster. What differentiates music fans from other music consumers is the degree to which they are involved – fans will often incorporate their interest in music into their daily lives in a very visible way. Consequently, music can become central to a fan’s identity construction and representation (Shanker, 2000). Fans are also motivated by a complex interplay of needs to both belong to a particular subculture and through that membership, mark themselves as different or unique in comparison to the general population (Hebdige, 1979). ❖ Collectors - Two distinct representations of music collectors exist. The first portrays collectors as childish or nerdy, engaging in behavior that some might argue they should have grown out of. The second depicts a worthwhile culture pursuit similar to curatorship, if the objects collected hold a valued status (Longhurst, 2007). Thornton (1995) and Richards (1998) state that males more than females, enjoy opportunities to display the quantity and range of their music collections as it enables them to publicly exhibit their prowess in musical knowledge and their financial status, which in turn affirms a masculine work ethic and identity. Collectors are often viewed as aficionados.

While these frames could be viewed independently, it would be more appropriate to think of these as different spheres of music engagement that people move in and out of, and which interact and interplay with each other within the wider sociocultural-political space of the contemporary music market (O’Reilly et al, 2013).

2.2 Music Consumer Behavior “Consumer behavior is the study of all the processes that are involved when individuals or groups of people select, purchase, use or dispose of products, services, ideas or experiences to satisfy needs and desires” (Solomon, Bamossy & Askegaard, 2002). It is important to keep in mind that a large number of factors come into play affecting consumer behavior. One such factor is the environment, which has a huge impact on consumer behavior as human beings are social animals and are greatly influenced by others (Solomon, 2006). When considering adolescents and young adults, the internet, with which they have grown up with, is a major factor in shaping the behavior and values they express. Music products are no exception to this. From Napster to YouTube, the internet alone has brought about a lot of change in how all demographics discover and consume music products. And what consumers do and do not value, and subsequently do or do not pay for when it comes to music products, has changed because of this.

2.2.1 How people consume music Contrary to popular belief, music consumption is at an all-time high. “Overall volume is up 3% over 2016, fueled by a 76% increase in on-demand audio streams, enough to offset declines in sales and return a positive year for the business” (Nielsen, 2016).

Figure 2. US Total Albums + TEA + SEA (Nielsen, 2016)

The most recent Nielsen Year-End Report (Nielsen, 2016) states that of this total, streaming is generating the most profits with a 38% share. Digital downloads (albums and singles combined) account for 35% while physical sales account for 27%. Rock continues to be the dominant genre in terms of album sales (both physical and digital), but the streaming landscape is led by R&B/Hip - Hop, which garners the highest share of on-demand audio streams with heavily streamed artists like Drake, The Weeknd, Kanye West, Rihanna and J. Cole. While CD and digital download sales both dropped a significant amount, LP sales have surprisingly risen 10%, making 2016 the 11 th consecutive year of growth for this medium.

Figure 3. US Share of Total Volume by Format Per Genre (Nielsen, 2016)

Figure 4. US Total Album Sales (Nielsen, 2016)

With the current surge of digital technology all around us, it should come as no surprise that smartphones are moving towards replacing computers as the most used device for music consumption, especially in developing countries (IFPI, 2016). More than with free audio streaming services, users of paid audio streaming services such as Spotify and Deezer are particularly likely to listen to music on a smartphone, suggesting a positive outlook for this platform.

Figure 5. Smartphone usage for music by service (IFPI, 2016)

Even with the immense rise of streaming services such as Spotify, YouTube remains the most used music service, with 82% of its users using it for music “consumption” (IFPI, 2016). ‘Consumption’ in this context is not entirely accurate as also YouTube suffers from an extensive amount of pirated content, where proceeds from advertising, if not brought down by YouTube, go to the illegal uploader instead of the artist/label (if advertising is enabled by said user). Copyright infringement remains a significant problem, where more than one third (35%) of internet users access unlicensed music content and half (49%) of 16-24 year old’s stream rip from sites like YouTube. In total, only a troubling half (48%) of all internet users pay for music in some form (IFPI, 2016). It is however among the younger generation where hope needs to and can be found. This is in the form of services such as Spotify. One-third of 16-24 year old’s pay for an audio streaming service, a figure that has grown over the last few years. Even more hopeful is the fact that 82% of 13-15 year-olds listen to licensed music, with the majority stating that they would be willing to pay for it themselves (IFPI, 2016).

2.2.2 How people discover new music How people discover (new) music is something of great interest and importance to the music industry and record labels in particular, as they are usually the responsible party for marketing musical products. This means that understanding the consumers and marketing on the right platforms for your target group is key. The rapid changes in technology and distribution channels are changing the way we discover and engage with content (Nielsen, 2016). Popular methods of music discovery these days include Subscription-Based Streaming Services such as Spotify, Amazon Music and Amazon Prime; Online Sessions such as NPR’s Tiny Desk Sessions, KEXP’s Sessions and Gigwise Office Sessions; Music Blogs such as Pitchfork, Pop Justice and Angry Metal Guy; Traditional Radio Stations such as BBC 6 Music, 3FM and NPO Radio 2; Online Radio Stations such as Pandora and 8tracks; Browser Streaming Services such as YouTube, SoundCloud and Bandcamp; and Music Identification Apps such as Shazam and SoundHound (Pollard, 2016). While YouTube is the most popular service for consuming music, it is primarily used to consume music people already know rather than to discover new music (IFPI, 2016). The 2016 Nielsen Year- End Report found that, in the US, AM/FM radio is still the most popular platform for music discovery. Friends and relatives’ recommendations come in second, followed by movies, online audio or video music websites/apps (YouTube, Spotify, etc.), social media, online radio and TV.

Figure 6. US Music Discovery (Nielsen, 2016)

2.2.3 What consumers do and do not value within music products The declining sales of CDs and digital downloads combined with the rising popularity of streaming services suggest that the interest of consumers is moving away from owning music and towards renting it. When considering the three frames/spheres of music consumers previously mentioned, this could be interpreted as a general shift from ‘collector’ to ‘audience’, where collectors value possession and audiences value experiences, creating a sense of community and belonging. “Despite the availability of entertainment specially tailored for each individual, people still crave experiences they can share with others. What they want most is what everyone else wants” (The Economist, 2017). This emphasis on experiences is increasing the importance of live performances and the demand for it. A study by Happonen (2016) found that a good stage show, good timing, good company to go with and a convenient concert location are key factors in determining whether people go to a live concert or not, suggesting that the experience and convenience is key and not the music. That is not to say that people do not appreciate music and recognize the value of it in terms of emotional and cultural factors. Its perceived financial value in the form of music recordings however, is declining. “There is a mass of consumers who expect to get entertainment and information for free or at a very little cost.” (Happonen, 2016) Bands Radiohead and Nine Inch Nails tested this notion by offering their newest release digitally for an open price, meaning consumers could pay however much they wanted for the release. They found out that consumers did not mind downloading the album without paying anything (Sandoval, 2013).

It is an arduous task to convince people to pay for products when there are plenty of free alternatives. Add on top of that that pirates do not feel they are doing anything wrong or taking anything away as there are other free consumption options available as well, as found by Happonen (2016). Reasons from downloaders to justify piracy include that they believe file sharing to be less serious than other forms of stealing, such as shoplifting (Wingrove, Korpas & Weisz, 2010) because there is no direct harm to anyone (Vitell & Muncy, 2005). Some downloaders justify file sharing as taking away from corporations who are more interested in profit and exploiting consumers than attending to their consumers’ needs (Moore & McMullan, 2004) or musicians’ interests (O’Reilly et al, 2013). Many blame the increase in file sharing on the extortionate prices charged for an album (Kwong, Yau, Lee, Sin & Tse, 2003). Ouellet (2007) states that consumers are more likely to illegally download an artist’s work if the artist is excessively successful, as they believe that infringement activity will not greatly affect the profits of the artist or the large corporations associated with the artist (Moore & McMullan, 2004).

A recent study by Sinclair and Green (2016) identified four key segments of contemporary music consumers based on a continuum of their preference for illegal music piracy. These segments are Steadfast pirates, Ex-downloaders, Mixed tapes and Old schoolers. The actions and attitudes of each segment towards piracy, the music industry and legal music is shown in the table below.

Figure 7. Typology of music consumers based on piracy attitudes (Sinclair & Green, 2016)

What resulted from the qualitative study based on 35 in-depth interviews was that fear and guilt appeals had no impact on the steadfast pirates and ex-downloaders and only a marginal influence on the mixed tapes in terms of their consumption of smaller artists and independent labels. The steadfast pirates were still not convinced of the superiority of legal digital platforms over

18 illegal forms of digital consumption, and the mixed tapes and old schoolers had reservations over its potential superiority to physical forms of music. The mixed tapes potentially represent the most likely segment that could be convinced to migrate to legal digital platforms because of the level of guilt that they attribute to their acts of piracy.

The main challenge for the music industry is to either change or adapt to the fact that the general notion, of the younger generation in particular, seems to be that everything on the Internet - including music - is or should be free (Happonen, 2016).

2.2.4 What consumers are (not) paying for and (not) willing to pay for If the shift to an audience frame was not already clear, Nielsen (2016) investigated the spending of consumers towards musical products and found that more than half (57%) of the total spending went towards live experiences (Live Music Concerts, Small Live Music Concerts, Music Festivals and DJ Events), despite increasing ticket prices (Cliff, 2017). When asked by Happonen (2016) what people would spend more money on if they had more money at their disposal, threequarters stated that most of that extra money would go to concert tickets and live music events.

Figure 8. Share of Music Spending (Nielsen, 2016)

There is of course a limit to how much people can consume and how many services they will subscribe to. With the current digital age where producing and broadcasting content has become so easy, we have reached the point of an entertainment overload, meaning bad news for small artists wishing to climb the ladder of success. “A relatively obscure item is worth very little. One reason is that the internet leads consumers to expect most things to be free, especially content without a brand name. Second, consumers believe (rightly) that there is not much difference between most of the obscure items on offer. And third, they reckon (also usually correct) that those items have cost hardly anything to produce, so they are almost worthless” (The Economist, 2017). Consumers will however pay a premium for famous brand names, for which we partly have the algorithms of search engines and social platforms to thank. On the other hand, platforms such as YouTube and Facebook are aiding (small) artists in reaching an audience with great ease, be it next door or half way across the world (The Economist, 2017).

It is important to keep in mind that with young consumers, a practical side that affects where and how music is bought is the fact that most are not in possession of a credit card, often required to buy digital music or to subscribe to paid streaming services. These young consumers under 18 are therefore completely dependent on their parents in this matter. However, what kind of music that is consumed (genres) remains an independent factor (Happonen, 2016).

2.3 The current state of the Music Industry

The music industry has known its fair share of golden ages from the likes of Mozart and Haydn in the Classical Era (1730-1820) (Kennedy & Kennedy, 2006) to The Beatles and The Beach Boys in the LP Era (1960-1980) (O’Hagan & Barbour, n.d.). Today, the musical landscape has yet again changed, quite significantly, by the rise digitalization.

2.3.1 Market Structure – Traditional and Digital The market structure of record companies has been forced to change significantly due to digitalization. The business model of record companies has always been based on selling music in album format, where singles were created and sold to promote said albums. Because physical discs and cassettes had a fixed price, it was much more beneficial for record companies to put on as many songs on a disc/cassette as possible. Digitalization has allowed the possibility of single-song purchases, shaking the core business foundation. Both the market structure and value chain of the music industry was disrupted and received a makeover. This led to the redundancy of intermediaries such as distributors and retailers, when strictly considering the digital market.

Figure 9. Digital Music Distribution & Value Chain (Wordpress Blog Arobinaday, 2012)

While the physical market is not gone, it has become less prominent. And although the combination of piracy and digitalization has led to the loss of a significant number of jobs, mainly in the physical market, others have been created because of it, leading to the number of jobs in the music industry to have remained fairly consistent within the EU (Acker, Gröne, Lefort & Kropiunigg, 2015).

Figure 10. Jobs in the Creative Industries (Acker et al, 2015)

The digital age in music is not something new as it has been around since 1999 when it saw the rise of piracy networks such as Napster, bringing with it the first phase of digital music. We are currently in the fourth phase of digital music: The rise of curated and ‘listen’ services. The phase seeks to bring meaning to the 30 million tracks streaming services such as Spotify and Deezer offer by means of curated playlists. “30 million tracks is a meaningless quantity of music. It would take three lifetimes to listen to every track once. There is so much choice that there is effectively no choice at all. This is the Tyranny of Choice” (Mulligan, 2014).

2.3.2 Music Saturation and the Blockbuster Effect ‘The Tyranny of Choice’ could also be described as music saturation. With digital technologies enabling people to produce quality sounding music with inexpensive equipment and relative ease, the music industry has seen an explosion in original music. Much like social media has given everyday people the ability to let their opinions be heard have music software/Digital Audio Workstations (DAW) such as GarageBand, Fruit Loops and Ableton Live given everyday

22 people to ability to create their own music without having to rent a studio and hire the necessary producers, mixers and technicians. While there is almost no limit on the supply of entertainment choices, “people’s awareness of them is constrained by the attention they can spare” (The Economist, 2017). In 2013, Spotify stated that of its 20 million strong song catalogue at the time, only 80% had been played at least once, meaning 4 million songs had generated no interest at all. Additionally, BuzzAngle Music stated in 2016 that the top 1,000 songs accounted for 92 billion streams, or 23% of the total (The Economist, 2017). “What consumers pick is increasingly determined by the algorithms driving the competition and those algorithms mostly send them straight to what everyone else is consuming” (The Economist, 2017). This has led to what is known as the ‘Blockbuster Effect’. While major corporations have the resources to invest modestly into thousands of artists, they choose to invest heavily into a select handful which they can sculpt into superstars or ‘blockbusters’, keeping in mind that people want what everyone else wants and that subsequently, the algorithms will reinforce this.

2.3.3 Recent Trends Unlike with iconic brands as Apple, Hyundai and Maybelline, which attract consumers and sell based on their brand name alone (Bhasin, 2011), music consumers give little to no attention to record labels unless it is a known niche label of which consumers know what to expect. These labels often focus on one or two (sub)genres and therefore cater to a specific audience, such as Spinefarm Records specializing in metal and rock, or Fiction Records specializing in post-punk and alternative rock. But for the most part it is the artist or the band that gets most of the attention and not the label behind it (Bordowitz, 2007). Now that marketing is easier than ever due to social media and other online tools, the next era for music (which we are currently in) is all about interaction where artists are communicating and selling directly to fans. More and more artists are becoming aware of this and some find the advantages a record label offers to not be worth it, resulting in an artist going independent. Examples of this include Chance the Rapper, Macklemore & Ryan Lewis and While She Sleeps who have all seen success despite the absence of a label to support them. It is evident that a notion is going around of record labels losing power and becoming irrelevant (Ntim, 2016).

Bands used to tour to sell records but nowadays bands sell records to sell tour tickets. Some artists, such as Chance the Rapper, take it a step further by giving away all their music for free, just to be able to sell tour tickets (Ntim, 2016). A clear shift in how artists make money has taken form,

23 where it’s no longer about selling music and all about selling live experiences. To suggest the importance and size of the live music industry, Live Nation Entertainment, a global entertainment company that owns, leases, operates and has the booking rights for a large number of entertainment venues, reported a total revenue of 5,87 billion US dollars, a number which has been growing since 2010 (Statista, 2016).

Figure 11. Live Nation Entertainment Concert Revenue (Statista, 2016)

2.3.4 Reasons for fluctuating music sales It was since the file sharing service Napster got its start that the downhill for record companies did too back in 1999. Napster’s internet based service allowed users to share (music) files with peers setting into motion the movement of piracy. The music industry has been blamed for being slow to respond to the changes in the consumer behavior and coming up with legal alternatives (Happonen, 2016). The International Federation of the Phonographic Industry (IFPI) reported piracy to have led to a 31% decline in recorded music sales between 2004 and 2010 (IFPI, 2012). To counteract piracy, the music industry has sought unsuccessfully to scare and guilt illegal downloaders from downloading music illegally. Also, shutting down prominent file-sharing websites and prosecuting consumers through graduated response systems have had varied responses at best (Danaher, Smith, Telang & Chen, 2012; LeLoup & Baruch, 2012). Wang and McClung (2011) warn of a potential boomerang effect in prosecuting or even threatening to prosecute consumers, where said consumers may develop a further level of resistance and justification to continue music piracy. Cockrill and Goode (2012) further state that adopting a ‘blanket’ approach that highlights the attribution of harm and question a consumer's ethics, could

24 potentially have the undesired effect of annoying consumer segments who engage in very little piracy or are “already convinced that piracy is unethical and causes harm”.

Clearly the issue of piracy has not been resolved nor has an effective way to tackle it been discovered. Offering attractive legal alternatives seem to be the music industry’s best bet in this matter. Although the sales of music has been shaky, the consumption of it has been thriving, suggesting that the problem does not lie with music itself but with its perceived value. People have come to expect music to be available to enjoy at anytime, anywhere and at a minimum cost.

2.4 Opportunities for the Music Industry It is evident that the music industry is currently facing challenges to succeed in the digital age, forcing the industry to re-think their business models and find alternative ways of producing income. With technology changing fast and changing the way consumers consume and perceive music, understanding the consumer and the reasons behind their behavior is key when coming up with new services or re-thinking old ones (Happonen, 2016). Just as businesses in other markets have, so does the music industry need to realize that consumers have more power than ever and the internet offers them limitless options to consume (Salo, 2012). Without understanding the consumer, trying to plan and predict the future of the industry is futile. Through the research carried out, opportunities for improvement have arisen.

2.4.1 Streaming Services All signs appear to point at streaming services when it comes to the near future of the recorded music industry. However, streaming services could do more to highlight the social networking and profile display features in their targeting (Sinclair & Green, 2016), or in other words highlight the ability for consumers to communicate their knowledge of music and cultural identity. This would attract aficionados or ‘collectors’, as previously described. Also, the ethical implications of artists receiving very little payment from streaming services may be a significant issue for groups such as the previously mentioned ‘old-schoolers’ (Sinclair & Green, 2016) tampering the growth of steaming services. While publishing fees received from streaming services may be so low as to never fully compensate for the decline in album sales since the dawn of piracy, it can at the very least be seen as a strong marketing and promotion tool (Happonen, 2016).

2.4.2 The Live Experience If there is one sector of the music industry that will continue to thrive, it is the live sector. The live experience is what consumers want and where the largest part of the future and salvation for the music industry lies. The global entertainment and media outlook predictions state that the decline in music recording sales will be compensated by the annual growth in the global live music revenues within the next five years (Global Entertainment and Media Outlook, 2015).

2.5 Summary Music has always had a significant role in the lives of human beings throughout history. The reasons for listening to music are numerous and inclined to change through time. The six reasons for listening to music according to Lonsdale and North (2011) still hold true today with the addition of ‘Background Listening’ as mentioned by Chamorro-Premuzic et al (2007). Additionally, three types of music consumers are recognized; ‘Audience’, ‘Fan’ and ‘Collector’, seen as different spheres of music engagement that people move in and out of (O’Reilly et al, 2013).

People consume music through physical, digital download, streaming and live performance means. Within physical music, CDs and LPs are recognized, with CDs declining in popularity and LPs increasing. Within digital downloading, legal and illegal forms are recognized, illegal still being a popular choice and thus an issue for the music industry. Within streaming, both video and audio streaming is recognized, where the video streaming service YouTube is very popular but audio streaming is showing rapid growth, most notably through Smartphones. Radio is recognized in its traditional and online forms. In terms of music discovery, the Nielsen report found twenty popular platforms of which radio and friends & relatives are most popular within the US. What today’s music consumers generally crave above all else are experiences. This justifies the increase in popularity of live music events and specifically festivals. Convincing consumers to spend money on something they can otherwise access for free is an uphill battle that will require understanding the consumer and treating them as king.

The digital age has brought with it a more streamlined market structure, allowing the content to go from artist to consumer with great ease. This digital production and distributional ease has in turn created a saturation in music, forcing the major record labels to adopt a blockbuster strategy, where betting heavy on a select few artists is not only more efficient but effective in terms of turning a profit. For the artists not gaining much attention from these labels, self-releasing music is becoming an attractive option, leading many to question the relevance of record labels.

While the music industry is certainly no longer in its glory days, there are opportunities on the horizon in the form of audio streaming services and live music events. While audio streaming adheres to consumers’ notion of music being free or very inexpensive, live music events adhere to consumers’ craving for experiences. Both follow the notion of ‘Customer is King’ and are in turn reaping the rewards of it.

3. Methodology

3.1 Research Design

This quantitative study was conducted in the month of May 2017. To gain insight into how Dutch music consumers of Caroline Benelux’s most popular age groups discover and consume recorded music, a descriptive cross-sectional survey research design was applied. In cross-sectional designs, a sample is drawn from the relevant population and studied in that moment of time (Shaughnessy, Zechmeister & Jeanne, 2011). This representative sample was acquired using the snowball sampling method, where a link to the designed survey was shared among personal contacts first and asked to be spread out by a select few afterwards. These select few are personally trusted colleagues and associates with a shared interest in the research study, representing the older, harder to reach age groups. One such contact with whom the survey link was shared was an employee at Caroline Benelux. This employee oversaw the label’s social media and was therefore able to share the link through Caroline Benelux’s official Facebook page. Additionally, this post was sponsored as to increase its reach. Specific age groups that proved to be hard to reach during the course of data collection (35-44, 45-54 & 55-64) were targeted through the Facebook sponsoring.

3.2 Research Participants Across the music industry, from major and indie labels to retailers and Spotify, the following age groups are used (Kiesow, L. (personal communication, March 13, 2017)), with their corresponding description:

• 12 & under: Elementary School Children (2,375,000) • 13-17: Middle/High School Children / Teenagers (1,029,000) • 18-24: Students (University) (2,309,000) • 25-34: People with their first job (2,125,000) • 35-44: Parents with young children (2,094,000) • 45-54: Parents with older children (middle/high school & university) (2,565,000) • 55-64: Parents with grown up children (2,259,000) • 65 & up: Retirees (3,159,000)

The numbers in brackets represent the Dutch population by age interval, according to CBS (2016). Of these age groups, Caroline Benelux wishes to focus on their most prominent age groups. Different artists of the Caroline roster target different age groups. Artists such as Iggy Pop and Van

Morrison cater to the older age groups of 45-54 and 55-64 while artists such as Orange Skyline and Dead By April cater to the younger age groups of 13-17 and 18-24 (Kiesow, L. (personal communication, March 13, 2017)). The target age groups of Caroline Benelux are:

• 13-17: Middle/High School Children / Teenagers (1,029,000) • 18-24: Students (University) (2,309,000) • 25-34: People with their first job (2,125,000) • 35-44: Parents with young children (2,094,000) • 45-54: Parents with older children (middle/high school & university) (2,565,000) • 55-64: Parents with grown up children (2,259,000)

With a total population of 11,554,000 (N=11,554,000) for these age groups, a confidence level of 90%, a margin of error of 5% and a response distribution of 50%, a sample size of 271 (n=271) was calculated (Raosoft, 2004; Creative Research Systems, 2012; NSS, n.d.). To keep the sample representative to the population, the desired proportions per age group were calculated yielding the following sample size per age group.

• 13-17: Middle/High School Children / Teenagers (1,029,000) (8.91%) (25) • 18-24: Students (University) (2,309,000) (19.98%) (55) • 25-34: People with their first job (2,125,000) (18.39%) (50) • 35-44: Parents with young children (2,094,000) (18.12%) (50) • 45-54: Parents with older children (middle/high school & university) (2,565,000) (22.20%) (61) • 55-64: Parents with grown up children (2,259,000) (19.55%) (53)

For this survey, Caroline Benelux wishes to focus on male and female residents from the Netherlands. Thus, the target group for this research is Dutch males and females of the age group 13-64.

A total of 277 participants (n=277) (after ‘data cleaning’) were ultimately gathered with the following numbers per age group:

• 13-17: Middle/High School Children / Teenagers (25/25) • 18-24: Students (University) (87/55) • 25-34: People with their first job (51/50)

• 35-44: Parents with young children (34/50) • 45-54: Parents with older children (46/61) • 55-64: Parents with grown up children (34/53)

3.3 Measures

Participants were given a Dutch survey to fill in. The survey was formulated in Dutch because the target group consists solely of Dutch individuals. With a Dutch survey, the potential language barrier is avoided and individuals would be more likely to fill the survey in correctly. For the purpose of this research paper, questions and answers were translated to English. In the survey, relevant data about age, gender, music consumption and music discovery was collected using nominal, ratio and Likert scales. A total of 36 items were included in the survey.

To determine several items and sub items in the survey, the 2016 Nielsen End Report (Nielsen, 2016) was used. When asking participants about their preferred genre(s) (items 20 & 21), the listed genres in Figure 3 were used. When asking participants on how they discover music (items 30 & 31), the platforms listed in Figure 6 were used.

Other sources found in the literature review were incorporated into the survey such as the six reasons for listening to music by Lonsdale and North (2011), the three reasons by Chamorro- Premuzic et al (2007) and the three music consumer frames by O’Reilly et al (2013). The six reasons for listening to music by Lonsdale and North (2011) were supplemented by Chamorro-Premuzic et al’s (2007) reason of ‘Background Listening’, as Lonsdale and North (2011) did not cover this area (items 12 & 13). Chamorro-Premuzic et al’s (2007) three reasons (emotional, analytical & background listening) were also covered separately in the survey (items 14-16). O’Reilly et al’s (2013) three music consumer frames (audience, fan & collector) were covered by items 17-19.

Items 8-11 were created using multiple sources found in Chapter 2 of the literature review.

Remaining items and sub items were created in corporation with Caroline Benelux and their wishes.

3.4 Data Collection Procedure The data was collected through a survey created with the online service Google Forms. The survey was sent out both digitally to participants through social media channels (Facebook, Messenger and WhatsApp) and physically through face to face interactions. The survey is divided into nine segments:

• The first segment asks general questions to determine participants’ name, email address (in case contact needs to be made), gender, age and place of residence. • The second segment determines whether the participant works in the music industry. This segment is placed to make sure a representative image is given of the population. People active in the music industry may have different consumer behavior towards musical products depending on their function. • Segment three to six are about music consumption where each segment handles a different area within music consumption. Segment three determines how and why participants consume music, segment four aims to categorize participants into the three music consumer frames by O’Reilly et al (2013), segment five determines which musical genres participants listen to, with whom, where and how long, and segment six determines how many physical musical products (CD’s/LP’s) participants buy. • Segment seven determines how participants discover new music. • Segment eight determines how participants use Spotify (if they use Spotify) and segment nine determines if people pay for a streaming service (if they use a streaming service).

3.5 Data Analysis The data collected from the survey was further analyzed using IBM SPSS Statistics 20. Before analysis could begin however, the data required ‘cleaning’ to correctly portray the desired population. A Comma Separated Value (CSV) output of the data in Microsoft Excel was used to achieve this.

Participants who answered ‘Yes’ on the sixth item of the survey, asking if the participant works in the music industry, were considered for removal as their music consumption and discovery behavior is often not representative of the population. While a music industry professional is a part of the population, it makes up only the smallest fraction of the whole. In 2013, only 27,000 people in the EU were active in the music industry (Acker et al, 2015), making up only 0.005% of the EU’s population of 505 million at the time (Statista, 2016). 6 cases were removed of music industry professionals with unrepresentative music consumption and discovery behavior as part of their profession, such as playlist curator, artist promotion and publisher.

Further ‘cleaning’ of the data commenced by removing irrelevant cases. This included 14 participants who submitted a non-Dutch place of residence (ex. Leuven, Lommel, London), 4 double entries and one case who did not match the age requirement (aged 72).

‘Other’ type-in answers were reviewed to ensure no mistakes were made by the participants. Answers such as ‘Celtic-Folk’ or ‘Industrial Metal’ for the Musical Genre items were moved to the proper category (‘Country / Folk’ and ‘Rock / Metal / Punk’ in the example’s case).

To prepare the data for proper functionality in SPSS, the data was adjusted further. Each participant was placed in its age group, as the independent ages were of no interest to Caroline, only the age groups. For the checkbox items, where multiple answers could be selected, a separate variable for each available answer was created so that dichotomous multiple response sets could be defined in SPSS. Variable code names were given for said created variables such as ‘P1M_CD’ for the item ‘Platform per Month’ with the answer ‘CD’ or ‘G1M_Rock’ for the item ‘Genre per Month’ with the answer ‘Rock’. These dichotomous multiple response set variables (checkbox items) include items 8, 10, 12, 20, 30, 32 and 35 in the survey. Because SPSS cannot read spaces within variable names, every space was replaced with an underscore.

At this point the data was ready to be imported into SPSS. Within SPSS however, the data had to be further altered before analysis could be carried out. Numeric values were delegated to answers along with corresponding labels as to add meaning to the answers which SPSS can then comprehend. Missing answers for the multiple response set variables (checkbox items) were replaced with 0’s, to again make comprehendible for SPSS. Finally, variable types (String, Numeric, Date etc.) and measures (Scale, Ordinal, Nominal) were corrected.

To discover significant results with moderately weak to strong correlations, a bivariate correlation table with a two-tailed test of significance and Spearman correlation coefficient was created using every variable in the data, meaning every variable was compared with one another for significance and correlation. Correlations with a significance of 0.01 or lower and correlation coefficient of 0.400 or higher and -0.400 or lower were further analyzed. The Spearman correlation coefficient was used instead of Pearson due to the variable measures being mostly nominal or ordinal.

3.6 Ethical Considerations

Potential ethical issues that had to be considered include asking each participant’s name and email address in the survey. This was done in case follow-up questions arose after the initial survey. These items were however optional to fill in, in case participants felt this would damage their privacy or lead to spam mail.

Another ethical consideration arises in items eight and nine with the inclusion of the option “Illegal Digital Download” when asking in what form(s) participants consume music. Participants could feel wary about choosing this option when it applies to them, for the fear of being prosecuted. Another danger this option possesses is that participants may interpret the option to be implying that downloading illegally holds no consequences, which is of course not the case. However, downloading music illegally is a widespread practice (IFPI, 2016) and therefore should not be ignored as an option for these items. Additionally, it is important for record labels like Caroline Benelux to know to what extent music piracy is being practiced within their target group.

4. Results

4.1 Age Group

Because the primary objective of this study is to find out how music consumption in the Netherlands differs per age group, a thorough analysis of multiple variables in conjunction with age group was conducted.

A bivariate correlation table with a two-tailed test of significance and Spearman correlation coefficient showed a significant moderate negative correlation between age group and Instagram (r=-.517, p=.000) as well as age group and Snapchat (r=-.629, p=.000), both belonging to the dichotomous multiple response set of frequently used social media (item 32). A significant weak positive correlation was found between age group and most frequently used platform for music consumption (r=.326, p=.000) as well as between age group and most frequently used device for music consumption (r=.475, p=.000) and between age group and most frequently used streaming service (r=.426, p=.000). While a significance was found between the variables age group and most frequent reasons for listening to music, the correlation coefficient (positive) was very low (r=.125, p=.038). No significant correlation was found between age group and most frequently used platform for music discovery (r=.038, p=.525).

See Table 1 in Appendix C for an overview of these results and Graphs 1-7 (larger format) in Appendix D for a visual representation of the outcomes.

When graphing the correlation between age group and both Instagram and Snapchat, we see that more of the younger age groups (13-17 & 18-24) use the social media platforms than the older age groups (Graphs 1 & 2).

When graphing the correlation between age group and most frequently used platform for music consumption, we see a negative correlation for Audio Streaming Services and a positive correlation for Traditional AM/FM Radio, meaning the older the age group, the less Audio Streaming Services is used most frequently and the more Traditional AM/FM Radio is (Graph 3). Only in the 13-17 age group is Audio Streaming Services chosen 3.2% less than in the 18- 24 age group (Table 2).

Graph 3: Clustered Bar Chart - Age Group x Consumption Platform (Most Frequent)

When graphing the correlation between age group and most frequently used device for music consumption, we see a negative correlation for Smartphone and a positive correlation for Radio, meaning the older the age group, the less Smartphones are used most frequently and the more Radio is (Graph 4).

Graph 4: Clustered Bar Chart - Age Group x Device (Most Frequent)

When graphing the correlation between age group and most frequently used streaming service, we see a negative correlation for Spotify and a positive correlation for no streaming service, meaning the older the age group, the less Spotify is being used most frequently and the more no streaming service is used (Graph 5). Only in the 13-17 age group is Spotify chosen 9.1% less than in the 18-24 age group (Table 3).

Graph 5: Clustered Bar Chart - Age Group x Streaming Service (Most Frequent)

Furthermore, there was a statistically significant difference between variables as determined by one-way ANOVA (F(5, 271)=4.174, p=.001). A Tukey post hoc test revealed that the mean audience score (item 17, stating that one listens to the same music as their friends in order to give a sense of belonging) was statistically significantly lower for the age group 55-64 (M=1.59, SD=.857, p=.039) compared to the age group 13-17 (M=2.36, SD=1.221). The age group 55-64 was also statistically significantly lower (p=.022) compared to the age group 18-24 (M=2.22, SD=1.039) and (p=.010) to the age group 25-34 (M=2.33, SD=.952). The age group 45-54 was statistically significantly lower (M=1.74, SD=.929, p=.040) than the age group 25-34.

Further one-way ANOVA testing (F(5, 271)=2.856, p=.016) combined with a Tukey post hoc test revealed that the mean fan score (item 18, stating that one listens to a specific artist or genre, which feel like a part of their identity) was statistically significantly lower for the age group 45-54 (M=2.70, SD=1.227, p=.013) compared to the age group 13-17 (M=3.72, SD=1.173).

A final one-way ANOVA testing (F(5, 271)=6.063, p=.000) combined with a Tukey post hoc test revealed that the mean collector score (item 19, stating that one shares their music collection and knowledge of music with others) was statistically significantly lower for the age group 55-64 (M=2.21, SD=1.298, p=.007) compared to the age group 13-17 (M=3.40, SD=1.323). The age group 55- 64 was also statistically significantly lower (p=.000) compared to the age group 18-24 (M=3.51, SD=1.228) and (p=.008) to the age group 25-34 (M=3.20, SD=1.312). The age group 45-54 was statistically significantly lower (M=2.74, SD=1.373, p=.015) than the age group 18-24.

See Graphs 8-10 in Appendix D for an overview of the mean audience, fan and collector scores compared with age group.

When graphing the mean audience, fan and collector scores with age group, we see a slight negative correlation for all three consumer types, meaning the older the age group, the less one identifies as an audience, fan and collector (Graphs 8-10).

An overview of the most frequent answers for Caroline Benelux’s most relevant variables per age group is shown below (see Table 5 in Appendix C for a larger format).

Table 5: Most frequent answers for Caroline Benelux’s most relevant variables per age group

Age Music Music Music Reasons for Preferred Music Buy Streaming Free or Spotify Social Group Consumption Discovery Consumption listening to Musical Consumption CDs/LPs? Service Premium Listening Media Platform Platform Device music Genre Location (Paid) Options Streaming Service 13-17 Audio Audio Smartphone Mood Rock / At home No Spotify Free Private Snapchat Streaming Streaming Management Metal / Collection Service Service Punk (self- curated playlists) 18-24 Audio Audio Smartphone Relaxation / Rock / On the go (in Yes Spotify Premium Private Facebook Streaming Streaming Relieve Metal / transit) Collection Service Service Boredom Punk (self- curated playlists) 25-34 Audio Audio Smartphone Background Pop On the go (in Yes Spotify Premium Private Facebook Streaming Streaming Noise transit) Collection Service Service / Specific Albums & Artists (50/50) 35-44 Traditional Traditional Radio Background Pop At home Yes Spotify Premium Specific Facebook AM/FM Radio AM/FM Noise Albums & Radio Artists 45-54 Traditional Traditional Radio Background Pop At home Yes / No None Free / Private Facebook AM/FM Radio AM/FM Noise (50/50) Premium Collection Radio (50/50) (self- curated playlists) 55-64 Traditional Friends / Radio Background Pop At home No None Free / Private Facebook AM/FM Radio Family / Noise Premium Collection Colleagues (50/50) (self- curated playlists)

4.2 Other

While observing the bivariate correlation table done with all variables, significant weak to moderate correlations were found that did not have age group as independent variable.

A significant moderate negative correlation was found between emotional listening (item 14) and most frequent reason for listening to music (r=-.523, p=.000). A significant weak positive correlation was found between background listening (item 16) and average music listening hours per day (r=.419, p=.000), analytical listening (item 15) and collector score (r=.469, p=.000), average live music events per month and collector score (r=.406, p=.000) and between most frequently used device for music consumption and most frequently used streaming service (r=.406, p=.000).

See Table 4 in the appendix for an overview of these results and Graphs 11-15 (larger format) for a visual representation of the outcomes.

When graphing the correlation between emotional listening and most frequent reasons for listening to music, we see a negative correlation for background noise and a positive correlation for mood regulation, meaning the more emotionally one listens to music, the less background noise becomes the most frequent reason for listening to music and the more mood regulation does (Graph 11).

Graph 11: Clustered Bar Chart – Emotional Listening x Reasons for listening to music (Most Frequent)

When graphing the correlation between background listening and average listening hours per day, a positive correlation is found, meaning the more hours one listens to music per day, the more it is in the form of background listening (Graph 12).

Graph 12: Line Graph – Background listening x Average listening hours per day

When graphing the correlation between analytical listening and collector score, a positive correlation is found, meaning the more one regards themselves as a collector consumer type, the more analytically one listens to music (Graph 13).

Graph 13: Line Graph – Analytical listening x Collector Score

When graphing the correlation between collector score and average live music events per month, we see a positive correlation, meaning the more live music events per month one attends, the more one identifies themselves as a collector consumer type. There is however no data for 3-4 average live music events per month (Graph 14).

Graph 14: Line Graph – Collector Score x Average live music events per month

When graphing the correlation between most frequently used device and most frequently used streaming service, we see that participants who most frequently use TV and Radio for music consumption, largely do not use a streaming service, while all other devices do. Spotify is clearly the favored streaming service among all devices (Graph 15).

Graph 15: Clustered Bar Chart – Device (most frequent) x Streaming Service (most frequent)

No significant correlations were found with sex as independent variable.

5. Conclusion

5.1 Discussion

The aim of this study was to find differences in music consumption and discovery behavior between the most popular target age groups of Caroline Benelux’s roster, so that the correct promotion techniques can be applied on the correct platforms per artist’s target age groups. To answer the main research question (How do Dutch consumers of Caroline Benelux’s music differ by age group in their consumption of recorded music?) the corresponding sub questions must be answered first. These sub questions can be seen as components of the whole.

Sub question 1: How do the primary platforms for music consumption differ per age group?

Two clear most popular answers were found when asked through which platform the participants consume music: Audio Streaming Services and Traditional AM/FM Radio. A clear linear correlation was found when compared with age group, where audio streaming was most popular among the younger age groups and became less popular the older the age group. The reverse result was found for traditional AM/FM radio where the older age groups highly preferred the platform over the rest but got less popular the younger the age group.

A slight irregularity was found in the youngest age group (13-17) where audio streaming services were slightly (3.2%) less popular than with the 18-24 age group. What is also noticeable is that the 13-17 age group was the largest illegal digital download group. The combination of streaming services being slightly less popular for the 13-17 age group than with the 18-24 age group and pirating (illegal digital download) being most popular for this age group compared to other age groups could be due to this age group often not being in control of their own finances. These young consumers under 18 are often dependent on their parents when it comes to subscribing to paid streaming services, as Happonen (2016) also suggests. This financial dependency on parents but strong independence on what music they want to consume could push this age group towards piracy.

While digital music is most popular, Caroline Benelux is still highly invested in physical music, releasing most of their music on both CD and LP formats. While LP’s are not popular among the sample group, CD’s are the favored platform among a moderate portion of the older age groups. Additionally, almost half (45.8%) of the sample group consumed CDs at least once a month.

Sub question 2: How do the primary platforms for music discovery differ per age group?

While no significant correlation was found between age group and music discovery platforms, there were three popular answers: Friends / Family / Colleagues, Audio Streaming and AM/FM Radio. Audio streaming was most popular among the age groups 13-17, 18-24 and 25-34, AM/FM radio was most popular among the 35-44 and 45-55 age groups and Friends / Family / Colleagues was most popular among the 55-64 age group.

As found in the previous correlation, it seems that audio streaming is the popular choice for music consumption (and discovery) among younger ages 13-34 and traditional AM/FM radio for the older ages 35-64. This could either indicate a downfall for radio within the next 50 years, when these older age groups no longer exist, or that a turning point from more active music listening to passive listening exists around the 35-year mark. The future for audio streaming services seems bright, especially when taking into account that more than half (56.1%) of audio streaming service users in the sample group have a paid account.

Social media was also a popular choice and is certainly an attractive promotion platform for Caroline Benelux, with an enormous reach due to the large number of users and friendly user interface. Almost all of the participants (92.3%) use at least one social media platform frequently. Facebook was the most popular platform across all age groups except the youngest: 13-17. Here Snapchat was chosen most frequently, followed by Instagram and only then Facebook. This is also where we see a trend occurring of both Snapchat and Instagram becoming less popular the older the age groups get.

Noticeable was that the 55-64 age group answered quite high for ‘hardly ever discovering new music’, further suggesting that passive music consumption is more present in the older age groups.

Sub question 3: How do the primary devices for music consumption differ per age group?

The two most popular devices for music consumption amongst the sample group; Smartphone and Radio, both showed clear linear correlations where the older the age group got, the less smartphone and more radio was used. Of the 13-17 age group, none had radio as their most frequently used device, further suggesting the potential downfall of radio. It is no secret that radio is (becoming) an outdated technology, and as the results show, technologically advanced multipurpose devices such as smartphones are taking over.

Sub question 4: How do the primary reasons for consuming music differ per age group?

Of the 7 reasons for listening to music, mood regulation, relaxation and background noise were most frequent amongst the sample group, with background noise being most popular for the age groups 25-34, 35-44, 45-54 and 55-64. This further suggests passive music consumption becoming more present in the older age groups.

More evidence of this is found when comparing the consumer types with age group. For all three (audience, fan, collector) a negative correlation was found implying that the older the age group, the less one identifies as an audience, fan and collector. What all three consumer types share is an active attitude towards music. Because the older age groups score lower than the younger age groups, one could a suggest a general shift towards passive music consumption with older age or even a disinterest in music altogether, although further research would have to be conducted the confirm this.

RQ1: How do Dutch consumers of Caroline Benelux’s music differ by age group in their consumption of recorded music?

To summarize, the younger age groups most frequently use audio streaming for music consumption while the older age groups use traditional AM/FM radio. While LPs are still a rarity among Dutch consumers, CDs are still relatively popular among the older age groups. While the younger age groups primarily discover new music via family / friends / colleagues and audio streaming services, the older age groups continue to use traditional radio as their source for music discovery. While radio is still the preferred music consumption device for the older age groups, Smartphones are the most popular among the younger age groups and will very likely continue to grow in popularity among all age groups. While the younger age groups primarily listen to music in order to relax/relieve boredom and to regulate their mood, starting from age group 25-34, the primary reason for listening to music is to have some background noise. An overall shift from active music consumption to passive was found as the age group got older.

5.2 Limitations

While the snowball sampling method is a convenient method of gathering samples from hard to reach populations, it comes at the expense of introducing bias, as the method reduces the likelihood of the sample representing a good cross-section from the population (Crossman, 2016).

In items 8 and 9 where participants were asked to name their used music consumption platforms, it is possible that a lack of honesty was present among a portion of the sample group regarding illegal digital downloading. Of the four key segments of contemporary music consumers based on a continuum of their preference for illegal music piracy as defined by Sinclair and Green (2016), it is possible that the ‘mixed-tape’ segment may not have been honest about their use of illegal digital downloads due to the high levels of guilt they express towards smaller artists and labels regarding piracy, which they sporadically exercise.

When reviewing the data gathered, ‘iPods / Mp3 players’ were named a few times in the ‘Other’ category for the music consumption device items (items 10 and 11). If named as an option, more people might have chosen it.

When reviewing the data gathered, ‘Indie’, ‘Singer-Songwriter’ and ‘Blues’ were named a few times in the ‘Other’ category for the genre items (items 20 and 21). If named as options, more people might have chosen them.

The desired number of participants for the age groups 35-44 (34/50), 45-54 (46/61) and 55- 64 (34/53) were not reached, while the sample size of 271 (n=271) was. These age groups are therefore not entirely representative.

5.3 Recommendations

Currently, Caroline exercises artist promotion via numerous platforms of which magazines, newspapers, radio, record stores and social media (Facebook) are their most prominent. The research carried out shows that social media, audio streaming services and radio are very popular discovery platforms while magazines, newspapers and record stores are not. A shift of promotional efforts from the unpopular discovery platforms to the popular would be more beneficial.

Concerning social media, Instagram and Snapchat should be heavily considered as promotion platforms for the younger generation (13-24), where the platforms were very popular. This is currently not being done at Caroline Benelux. Snapchat has shown to be the most popular social media platform for the 13-17 age group. Promoting new releases and upcoming live events through Snapchat for artists targeting this age group could prove beneficial for Caroline and its concerning artists. This can be done through personal ‘behind-the-scenes’ type videos posted by influencers, to show a different side of the business to the audience (Siu, 2017). These influencers would be the artists themselves and not Caroline, so that the content feels personal and will help

45 build a deeper relationship between the artist and the audience. Research has found that Snapchat gets a nearly four times higher engagement rate compared to similar platforms like Instagram (Liedman, 2016), making it a valuable platform for connecting with audiences/fans.

A lot of attention is currently being spent on physical music formats (CD/LP) at Caroline Benelux, while the results of the research carried out show that streaming and radio is where most of the music is being consumed. Caroline’s current efforts toward radio promotion are sufficient. Radio airplay pitches for new Caroline artist releases are carried out twice a week and various artist interviews and sessions are arranged on a regular basis.

More could however be done for streaming, both video and audio. While Spotify audio and banner overlays are occasionally done for priority releases such as the most recent album by the Dutch band Chef’Special, it could be done more often. Audio overlays in particular, would do well seeing as the passive ‘background listening’ was found to be the most popular reason for listening to music. During background listening, the user is (most likely) not viewing Spotify on screen. A purely visual advertisement would therefore presumably have less of an impact than audio advertisements. With a very large portion of the participants stating they primarily use Smartphones to consume music, purely visual advertising will have even less of an impact than audio advertising due to the small screen and on the go (in transit) combination (58% of participants who use Smartphones as their primary music consumption device, listen to music on the go (in transit)) (Graph 16) which does not allow for on-screen focus.

Additionally, Caroline joint-curates two Digster playlists: ‘Indie Pendent’ and ‘Alternative 33’. Digster is a Universal Music Group owned playlist service with 43 curated playlists in the Netherlands and 11 in Belgium. Caroline Benelux pitches new releases to Digster on a weekly basis. The playlists ‘Indie Pendent’ and ‘Alternative 33’ are the go-to playlists for Caroline Benelux as they resonate well with most of their artists in terms of musical style. These two playlists consist of roughly 50% Caroline owned music, with the remaining 50% consisting of music from various labels. What the research carried out unfortunately showed is that most Spotify users simply look up artists and/or albums or listen to self-curated playlists as opposed to official or third party playlists. This is not to say that Spotify and third party (Digster, Filtr, Topsify)-curated playlists are performing very poorly, with 15.57% of Spotify users using them frequently (Graph 17). Playlists will likely rise in popularity as it creates order in the tyranny of choice that plagues music consumers, as suggested by Mulligan (2014). Of the various types of playlists, mood playlists are a good bet to

46 pitch towards as mood regulation was a popular reason for listening to music among the participants. Other Spotify promotional formats should also be considered, including video takeovers and homepage takeovers.

In terms of video streaming promotional activities, very little is being done by Caroline Benelux. Advertising on YouTube, the most popular video streaming platform, would surely prove beneficial.

To determine whether radio is becoming obsolete as suggested earlier, further research should be done in a few years’ time.

To determine whether a general disinterest in music comes the older one gets or if it is simply a shift from active to passive consumption, further research would have to be done.

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Appendix A – Survey Dutch

B – Survey English Multiple choice = one answer only

Checkbox = multiple answers possible

Music Consumption and Discovery

Caroline Benelux is a record label. Caroline promotes musical artists such as Childish Gambino, Tame Impala, Underworld, Ghost and Van Morrison. The musical scene is changing so rapidly that it is difficult to ensure that you are always aware of new music from your favorite artists. With this research, we hope to gain insight in how we may be of better service to our consumers.

This survey consists of 36 questions and takes about 13 minutes to complete. Thank you very much for your cooperation!

General 1. Name (short answer) 2. Email address (short answer) 3. Sex (multiple choice) a. Male b. Female 4. Age (short answer) 5. Place of Residence (short answer) 6. Do you work in the music industry? (multiple choice) a. Yes b. No (go to item 8)

Position in the music industry

7. Which position do you work in the music industry? (short answer)

Music consumption: Part 1

8. Via which of the following options do you listen to music at least once a month? (checkbox) a. CD b. LP c. Legal digital download (Example: iTunes, Bandcamp) d. Illegal digital download (Example: The Pirate Bay, YouTube Downloader) e. Audio streaming service (Example: Spotify, Deezer, Apple Music) f. Video streaming service (Example: YouTube, Vimeo, Vevo) g. Traditional AM/FM radio (Example: 3FM, Radio 538, Radio 2) h. Online radio (Example: 3FM web radio, Pinguin radio) i. Other (short answer) 9. Via which of the following options do you listen to music most frequently? (multiple choice) a. CD

b. LP c. Legal digital download (Example: iTunes, Bandcamp) d. Illegal digital download (Example: The Pirate Bay, YouTube Downloader) e. Audio streaming service (Example: Spotify, Deezer, Apple Music) f. Video streaming service (Example: YouTube, Vimeo, Vevo) g. Traditional AM/FM radio (Example: 3FM, Radio 538, Radio 2) h. Online radio (Example: 3FM web radio, Pinguin radio) i. Other (short answer) 10. Which of the following devices do you use at least once a month to listen to music? (checkbox) a. Computer b. Smartphone c. Tablet d. CD Player e. LP Player f. AUX / Bluetooth speaker (connected to your smartphone/tablet) g. Radio h. Television 11. Which of the following devices do you use most frequently? (multiple choice) a. Computer b. Smartphone c. Tablet d. CD Player e. LP Player f. AUX / Bluetooth speaker (connected to your smartphone/tablet) g. Radio h. Television 12. Which of the following descriptions apply to you? (checkbox) a. I listen to music to get in a certain mood (happy, bittersweet, calm) b. I listen to music to express my identity and enhance my social image c. I listen to music to discover what is happening in the world d. I listen to music to relax or to counteract boredom e. I listen to music to dance or to sing along f. I listen to music to reminisce about good times g. I listen to music to have some background noise 13. Which of the following descriptions best apply to you? (multiple choice) a. I listen to music to get in a certain mood (happy, bittersweet, calm) b. I listen to music to express my identity and enhance my social image c. I listen to music to discover what is happening in the world d. I listen to music to relax or to counteract boredom e. I listen to music to dance or to sing along f. I listen to music to reminisce about good times g. I listen to music to have some background noise

Music consumption: Part 2

14. To what extent does the following statement apply to you? I listen to music to get in a certain mood (I listen to music in an emotional way) (Likert scale from 1-5 with 1 being ‘Does not apply’ and 5 being ‘Applies very well’) 15. To what extent does the following statement apply to you? While listening to music, I pay attention to the instruments being used and what they are doing (I listen to music in an analytical way) (Likert scale from 1-5 with 1 being ‘Does not apply’ and 5 being ‘Applies very well’) 16. To what extent does the following statement apply to you? I listen to music while working and/or studying (I listen to music in the background) (Likert scale from 1-5 with 1 being ‘Does not apply’ and 5 being ‘Applies very well’) 17. To what extent does the following statement apply to you? I listen to the same music as my friends to give me a sense of belonging. (Likert scale from 1-5 with 1 being ‘Does not apply’ and 5 being ‘Applies very well’) 18. To what extent does the following statement apply to you? I listen to music of a specific artist or genre. This artist or genre feels like a part of my identity. (Likert scale from 1-5 with 1 being ‘Does not apply’ and 5 being ‘Applies very well’) 19. To what extent does the following statement apply to you? I share my music collection and knowledge of music with others. (Likert scale from 1-5 with 1 being ‘Does not apply’ and 5 being ‘Applies very well’)

Music consumption: Part 3

20. Which genre do you listen to at least once a month? (checkbox) a. Rock / Metal / Punk b. R&B / Hip Hop / Rap c. Pop d. Country / Folk e. Dance / Electronic f. Religious / Gospel g. Dutch Folk Music / Schlager h. Holiday / Seasonal i. Jazz / Soul j. Classic k. Children’s Music l. Other (short answer) 21. Which genre do you listen to most frequently? (multiple choice) a. Rock / Metal / Punk b. R&B / Hip Hop / Rap c. Pop d. Country / Folk e. Dance / Electronic f. Religious / Gospel g. Dutch Folk Music / Schlager h. Holiday / Seasonal

i. Jazz / Soul j. Classic k. Children’s Music l. Other (short answer) 22. With whom do you mostly listen to music? (multiple choice) a. My partner b. My family c. My friends d. My colleagues e. Alone (alone in a room or alone with headphones) f. Other (short answer) 23. Where do you mostly listen to music? (multiple choice) a. On the go (car, bike, walking) b. Home c. School/Work d. Parties e. The gym f. Other (short answer) 24. On average, how many hours a day do you listen to music? (multiple choice) a. Less than 1 hour b. 1 to 2 hours c. 2 to 3 hours d. 3 to 4 hours e. 4 to 5 hours f. 5 to 6 hours g. More than 6 hours 25. On average, how often do you go to a live music event? (Concerts/festivals/performances) (multiple choice) a. Less than once a month b. 1 to 2 times a month c. 3 to 4 times a month d. More than 4 times a month 26. Do you buy physical CD’s and/or LP’s? (multiple choice) a. Yes b. No (go to item 30)

Physical Music 27. How many physical CD’s do you buy/order per month? (multiple choice) a. Less than one a month b. 1 to 2 a month c. 3 to 4 a month d. More than 4 a month 28. How many physical LP’s do you buy/order per month? (multiple choice) a. Less than one a month

b. 1 to 2 a month c. 3 to 4 a month d. More than 4 a month 29. Where do you usually buy or order physical CD’s and or LP’s? (multiple choice) a. Bol.com b. Mediamarkt c. Amazon d. Record store (Example: Velvet, Plato, Concerto) e. Websites for secondhand products (Example: Marktplaats.nl, Tweedehands.nl)

Music Discovery 30. Via which media platforms have you discovered music in the last month which you had not previously heard? (checkbox) a. Friends / family / colleagues b. Social Media (Example: Facebook, Instagram, Twitter) c. AM / FM Radio (Example: 3FM, Radio 538, Radio 2) d. Online Radio (Example: 3FM web radio, Pinguin Radio) e. Audio Streaming Service (Example: Spotify, Deezer, Apple Music) f. Video Streaming Service (Example: YouTube, Vimeo, Vevo) g. TV (non-music competition shows) h. Music competition shows (Example: The Voice, X Factor, Idols) i. Live Events (Concerts / festivals / performances) j. Videogames (Example: FIFA, Grand Theft Auto) k. Newspapers (Example: Metro, NRC Cultuurrubriek) l. Magazines (Example: Libelle, Oor, Soundz) m. Online Music Stores (Example: Bol.com, Mediamarkt.nl) n. Online Music News Platforms (Example: Nu.nl/muziek, Loudwire) o. Official Band/Artist websites p. Blogs / Vlogs q. Audio File Sharing (Peer 2 Peer) r. Record Stores (Example: Velvet, Plato, Concerto) s. I rarely discover new music t. Other (short answer) 31. Via which media platform do you most frequently discover music of which you have not previously heard of? (multiple choice) a. Friends / family / colleagues b. Social Media (Example: Facebook, Instagram, Twitter) c. AM / FM Radio (Example: 3FM, Radio 538, Radio 2) d. Online Radio (Example: 3FM web radio, Pinguin Radio) e. Audio Streaming Service (Example: Spotify, Deezer, Apple Music) f. Video Streaming Service (Example: YouTube, Vimeo, Vevo) g. TV (non-music competition shows) h. Music competition shows (Example: The Voice, X Factor, Idols) i. Live Events (Concerts / festivals / performances)

j. Videogames (Example: FIFA, Grand Theft Auto) k. Newspapers (Example: Metro, NRC Cultuurrubriek) l. Magazines (Example: Libelle, Oor, Soundz) m. Online Music Stores (Example: Bol.com, Mediamarkt.nl) n. Online Music News Platforms (Example: Nu.nl/muziek, Loudwire) o. Official Band/Artist websites p. Blogs / Vlogs q. Audio File Sharing (Peer 2 Peer) r. Record Stores (Example: Velvet, Plato, Concerto) s. I rarely discover new music t. Other (short answer) 32. Which social media do you use frequently? (checkbox) a. Facebook b. Instagram c. Snapchat d. Twitter e. LinkedIn f. I do not use any social media g. Other (short answer) 33. Which audio streaming service do you use most frequently? (multiple choice) a. Spotify b. Deezer (go to item 35) c. Apple Music (go to item 35) d. Tidal (go to item 35) e. I do not use an audio streaming service (end of survey) f. Other (short answer) (go to item 35)

Spotify

34. Via which of the following options do you listen to music on Spotify? (checkbox) a. I listen to what is in the top 50 and viral charts b. I listen to Spotify playlists (Example: Pop Hits, Summer Tunes, Lazy Sunday Morning) c. I listen to Spotify’s New Music Friday playlist d. I use Spotify’s Releaseradar / Discover Weekly e. I listen to the music in my friends’ timelines f. I listen to music that I see/hear in banners and commercials g. I listen to my private collection (self-curated playlists) h. I look up specific albums and/or artists

Audio Streaming 35. Considering audio streaming services, which of the following applies best to you? (multiple choice) a. I have a premium (paid) account for an audio streaming service b. I have a free account for an audio streaming service

36. On average, how many hours a day to you listen to music via a streaming service? (multiple choice) a. Less than 1 hour b. 1 to 2 hours c. 2 to 3 hours d. 3 to 4 hours e. 4 to 5 hours f. 5 to 6 hours g. More than 6 hours

C – Result Tables Table 1: Bivariate Correlation – Age Group x Reasons for listening to music (most frequent) x Instagram x Snapchat x Discovery platform (most frequent) x Device (most frequent) x Consumption platform (most frequent) x Streaming service (most frequent)

Table 2: Crosstabulation – Age Group x Consumption Platform (Most Frequent)

Table 3: Crosstabulation – Age Group x Streaming Service (Most Frequent)

Table 4: Bivariate Correlation – Emotional listening x Analytical listening x Background listening x Reasons for listening to music (most frequent) x Average music listening hours per day x Collector x Average live music events per month x Device (most frequent) x Streaming service (most frequent)

Table 5: Most frequent answers for Caroline Benelux’s most relevant variables per age group

D – Results Graphs Graph 1: Pyramid Histogram- Age Group x Instagram

Graph 2: Pyramid Histogram - Age Group x Snapchat

Graph 3: Clustered Bar Chart - Age Group x Consumption Platform (Most Frequent)

Graph 4: Clustered Bar Chart - Age Group x Device (Most Frequent)

Graph 5: Clustered Bar Chart - Age Group x Streaming Service (Most Frequent)

Graph 6: Clustered Bar Chart - Age Group x Reasons for listening to music (Most Frequent)

Graph 7: Clustered Bar Chart - Age Group x Discovery Platform (Most Frequent)

Graph 8: Bar Chart - Age Group x Mean Audience Score

Graph 9: Bar Chart - Age Group x Mean Fan Score

Graph 10: Bar Chart - Age Group x Mean Collector Score

Graph 11: Clustered Bar Chart – Emotional Listening x Reasons for listening to music (Most Frequent)

Graph 12: Line Graph – Background listening x Average listening hours per day

Graph 13: Line Graph – Analytical listening x Collector Score

Graph 14: Line Graph – Collector Score x Average live music events per month

Graph 15: Clustered Bar Chart – Device (most frequent) x Streaming Service (most frequent)

Graph 16: Clustered Bar Chart – Device (most frequent) x Music Consumption Location

Graph 17: Bar Chart – Spotify Listening Options