sign in sign up
<<
Home , Big for Your Boots, Girls Talk Boys, Snapchat

Gen Z Meet The Young Millennials

A MIDiA Research report jointly commissioned by BPI and ERA

Music Mark Mulligan June 2017 Media Insights and Media Insights Decisions In Action MIDiAresearch.com Gen Z Mark Mulligan Music June 2017 Kim Bayley, Chief Executive ERA ‘’, itsbehaviour andpreferences.’ at theBPI, thisgenuinely new pieceof research about ERA isdelighted to sponsor, alongside ourcolleagues whom were not even at born thedawn of theMP3age. stay close to emerging generations of musicfans, many of fast-paced digitalworld nothing isforever anditisvitalto What we cannot do, however, isrest onourlaurels. Inthe Woolworths singles department, itisliterally unbelievable. To thoseof usbrought upwiththelimited choice of the accessto virtually allthemusicinworld. 24/7 done sowithanunbeatable consumerproposition: in themusicindustry inmore thanadecade. Ithas piracy initstracks, ithascreated thefirst real growth the streaming revolution. Not only hasithelpedstop None of usshould underestimate theachievement of to Amazon PrimeandDeezer. who are transforming it-from Spotify to , we are proud to represent many of thecompanies ‘It’s not news that entertainment ischanging. At ERA -- Geoff Taylor, Chief Executive BPI&BRIT Awards guest presenters andpanellists for theirvaluedcontribution. ‘ and MusicAlly’s Paul Brindley for theirexcellent work andour We would like to thankMarkMulliganandMiDiAResearch in partnership withourretail partners at ERA. to present thisInsight Sessionandreport into Gen Z will shapethefuture of ourbusiness. We are delighted fans engage withmusicandhow advancingtechnology members, large andsmall, into thedifferent ways that At theBPIwe are committed to providing insight for our will becomemore widespread amongmusicfans over time. as akey segmentof themarket, they alsounveil trends that behaviours of theseyoung digitalnatives are not only important to understand thebehaviours of Generation Z. The complex ‘If we are going to prepare for thefuture of music, we need

MIDiAresearch.com Gen Z Mark Mulligan Music June 2017 16-19 year olds part of theirlifepart use is an important is animportant 16-19 year olds say that music 64% 85% content consumption are allrewriting therule books andwillcatalyse older Millennial peers. Their useof technology, socialmedia and different behaviours, expectations andattitudes compared to their Millennials, Gen Z, are thoseaged upto 19. They have dramatically a single generation butinfact 2separate ones. The new younger Millennials have beenaround solong that they are nolonger The 20,000 Foot View • • • • • • • • • • • • • • • Key Findings were re-defining thebusiness of music, wait to seewhat Gen Z willdo. the musicindustry hasyet seen. Ifyou thought streaming Millennials some of thebiggest changes inaudience behaviour andlistening that experiences Record labelsneedto explore how to build new artist-centric as there may not beasecondchance may not get a2ndshot. Get itright first time Gen Z hasanexcess of choice, somusicmarketers Authenticity, relevance, shareability andcontext are key to Gen Z to just 2%over 20+consumers 12% of 16-19 year olds compared use Musical.ly to single tracks andplaylists instead of albums 74% of all16-19 year olds say they are mainly listening Streaming istransforming Gen Z’s relationship withmusic: them isaboutgoing outandhaving fun of theirlifepart while 74%say that musicfor 85% of 16-19 year olds say that musicisanimportant penetration rates thantheoverall population unsurprisingly dominates, withmuch higher Among 16-19 year olds YouTube andsocialmedia subscribers and1.2 billioncumulative views cumulative views while KSIhas16.1 million Zoella has11.8 millionsubscribers billion and0.9 user penetration compared to 47% for YouTube YouTube asthemainmusicapp with53%weekly However among16-19 year olds Spotify hasovertaken and KSIare becomingthenew popstars for Gen Z 12-15 year olds on YouTube, though YouTubers like Zoella Music isthemost widely watched content typeamong Z, peakingat 94%monthly penetration among16-19 year olds YouTube isthemost pervasive entertainment platform for Gen are replacing socialnetworks for Gen Z like Snapchat andInstagram competing to have thebest-looking photos powering ‘digital peacocking’, withyoung users Instagram hasbuiltitsplayground popularityby 16-19 year olds, while 63%of 16-19 year olds useInstagram A 3rd of 8-11 year olds intheUKuseSnapchat, risingto 67%for making app experiences for Gen Z the Millennial feedback loop of older Millennials The rate of app innovation isaccelerating dueto

About MIDIA

About MIDIA Research MIDiA Research is a unique analysis and data service focused on the intersection of technology and content. MIDiA Research leverages multi-country consumer data, market forecasts and other proprietary data tools to provide unrivalled insight into the rapidly changing global markets. Our coverage includes music, online , mobile content and paid content strategy. MIDiA Research gives you online access to our research database as well as regular new research reports that give you the critical insight into the issues that will shape your

Mark Mulligan June 2017 business and give your company the strategic edge over the competition. We provide different levels of access to suit your requirements and budget. Simply choose which coverage areas you want and then which subscription package is right for you.

For more details visit our website: www.midiaresearch.com Or email us at [email protected]

A MIDiA Research report jointly commissioned by BPI and ERA

Gen Z Gen MIDIAresearch.com Generation Z: Meet The Young Millenials Music Mark Mulligan June 2017

Just as everyone had finally got familiar with Millennials it became clear that things had changed all over again. We have been using the term Millennial for so long now that it no longer refers to one but two generations. Now we need to become more precise and thus we see the emergence of a new cate- gory, Gen Z, those consumers born in the new millennium. True Millennials if you like.

This generation looks set to prove that they will have some of the most dramatic impact on media consumption we have ever seen, which is already forging exciting new behaviour pat- terns. While the first generation of Millennials consumed apps made by digital immigrants (eg Netflix, Spotify, ) Gen Z is consuming experiences made by digital natives (eg Snapchat, Instagram, Musical.ly). Digital immigrants come to product development with analogue reference points, even if they try their best to ignore them. Digital natives have no such analogue baggage. The resulting rate of change of this new Millennial feedback loop is already far faster than anything we have seen yet and the pace will only pick up. Gen Z Gen

In this report we deep dive into the behaviours of Gen Z in the UK, looking at how they engage with digital media, social me- dia and music to explain how they will shape the future digital landscape. MIDIAresearch.com Gen Z Music MIDIAresearch.com Mark Mulligan June 2017 cal on , posts on Tumblr’s socialchannels, pushnotifications to engage secure aRadarfeature (promoted post space), reblogs onthe “music” verti with Tumblr. In exchange for the Tumblr partnership thelabelwas also able to offering an exclusive 36-hour premiere of theBTS footage from thevideo shoot Post videorelease, thelabelcontinuedtheme of mediapartnerships by the ’s MadisonSquare Garden date. miere onMTV’s Snapchat channel. The labelcreated aSnapChat Geofilter for with exclusive Behind The Scenes(BTS) content from thevideoshoot to pre Further excitement was generated by withMTV, partnering who were provided these platforms were alsoakey focus for theoverall campaign. for thosefans were Snapchat, Instagram, , Tumblr andMusical.ly, so Given theyoung fanbase of theband, thelabelknew that key socialplatforms Spotify’s algorithms to recommend thetrack more. site, thesongwas automatically saved to thefan’s collection which triggered they knew fans were using. Also, each timeatrack was shared from themicro more effectively by prioritisingdifferent retail partners basedonthe services users. Itsmarketing team could thensegmenttheiremailcommunications to reach anew audience, aswell ascollecting data onwhich fans were Spotify ten. for UsingSpotify as themainpartner thecampaignalsohelpedlabel layed for aweek, to incentivisefans to useSpotify rather than YouTube to lis microsite where fans could unlock themusicvideo. The video’s release was de Once thesingle was released, thelabellaunched aSpotify ‘share-to-unlock’ sive 30-secondsnippet of thesingle. fans could callto hearapre-recorded message from theband, plusanexclu Superphone,with USstart-up usingits serviceto set upaphonenumberthat Playing onthe “Who you gonna call?” tagline, 5SOSpartnered 13-20. fans, asthemajorityof theband’s fanbase are alsofemale andaged between and fan base, sincethemaincast was allfemale. This connected with5SOS’ budget version of thefilm). Ghostbusters was a good fitwith5SOS’ branding ‘slimed’, behindpictures from themusicvideo(where thebandrecreated alow offeringadverts the band’s service as “Ghostbusters”, of the band being soundtrack. content followed theannouncement, includingfake cial channels that they would bereleasing asingle from theGhostbusters The campaignstarted withthebandannouncingthrough theirown so The Campaign: scription serviceslike Spotify. vices, andencourage themto migrate from free serviceslike YouTube to sub soundtrack. Akey focus was to educate theband’s fans aboutstreaming ser the new 5SOSsingle ‘Girls Talk Boys,’ afeatured songintheGhostbusters film The maingoal for thiscampaignwas to raise awareness anddrive streams for Aims: 5 Secondsof Summer: Girls Talk Boys CASE STUDY: CAPITOL RECORDS UK-

Music ------MIDIAresearch.com Gen Z Mark Mulligan Music June 2017 sic Ally’s Sandbox Report This casestudy was originally covered inthe21st September 2016editionof Mu - Tumblr socialchannel posts reached anadditional 7mfollowers. impressions - GIFsfrom videofeatured in ‘Staff Picks,’ generating anadditional 900k videoviews (7k100%completion views) - 100k - 75kuniqueengagements - 1.7m impressions Tumblr new fans- Reached 263.6K - 94kvideoscreated - 717kimpressions oncontest page impressions viaDiscover page - 73.6m Musical.ly - Most-viewed of allDiscover channels onSnapchat that day. SnapchatMTV Discovery Takeover - ‘Login andShare’ linkclicks: 771,957 - Microsite URL short clicks: 172,375 - Uniquevisits: 278,337 - Visits to themicrosite: 1,355,056 - Twitter shares: 116,025 - Facebook shares: 12,743 Spotify Share-To-Unlock - 140,000 phonenumbers gathered from fans for future retargeting - 170,000 minutes of callslogged ontheline Superphone - Officialvideo generated 6.5mviews in24hours - Emailclicks: 70k - ‘Girls Talk Boys’ Streams (7Days): 4.5m - ‘Girls Talk Boys’ Streams (24hours): 1.1m Overall Campaign Results: sonal andengagingvideosbasedonthe ‘Girls Talk Boys’ track. Finally, Capitol partnered withMusical.ly, where thebandposted highly per 5SOS followers andother free inventory. advertising

Music

- - SECTION I: Gen Z Overview - Connected, Social And Confident

Music Figure 1: Gen Z Use To Define Themselves From An Early Age Penetration Of Key Social Apps By Age, UK Only Mark Mulligan June 2017

Social media has been around for many years but was arguably getting stuck in a rut until the emergence of messaging apps that quickly morphed from apps for messaging into a new, hyper- mobile, form of social media. The reinvention gave it new context and relevance to younger users who embraced messaging apps with abandon. Generation Z have made messaging apps their own, the technology of choice for their generation. Video, images and filters have replaced words as the main form of communication for these apps that have become the cornerstones of Gen Z’s behaviour and digital identity: • Snapchat: Snapchat epitomises the distinctive digital character of Millennials. Snapchat is the most youth focused messaging app, with features such as disappearing and Gen Z Gen where users can upload short video clips and photos to tell their networks what they are doing. It also provides filters that enable users to customize their content with overlaid images. Though the majority of its audience is comprised of older Millennials, Gen Z is a major component of its audience. The fact that even a third of UK 8-11 year olds use the app illustrates the strength of its appeal to them. To older audiences, Snapchat can appear inaccessible and confusing, but that is exactly the point. Snapchat shouts ‘I belong to my generation’ to older audiences. Snapchat users use the app to narrate their lives, from the small to the meaningful, a constant, audio visual account of their daily existence shared with their friends. And with videos restricted to under 10 seconds and never permanent,

MIDIAresearch.com Snapchat understands the importance Gen Z places on living the moment, in stark contrast to the way older users create a

Music carefully constructed social history on Facebook, something that Facebook panders to with its ‘memories’ feature. Snapchat’s penetration peaks at an impressive 67% for 16-19 year olds, hinting at the more mature, ‘grown up’ appeal of the app. • Instagram: Instagram is Facebook’s image focused messaging app that enables users to upload images with filters, upload videos and to post stories much like Snapchat. Among under 16s Snapchat is out performed by Facebook’s Instagram. Instagram has become Snapchat’s number one competitor, spending 2016 and 2017 aping the latter’s product features, such as Stories, to such an extent that one wag suggested Snapchat’s CEO has a new job as head of product at Instagram. The blatant mimicry has an important motivation. Messaging apps represent the future of social networking so rather than watch its long-term future dissipate, Facebook opted to disrupt itself before someone else did. Through a combination of acquisitions and product innovation, Facebook is now the leading messaging app company globally via WhatsApp (1.2bn

Mark Mulligan June 2017 Monthly Average Users ie MAUs), (1.2bn MAUs) and Instagram (700m MAUs). Snapchat by contrast has around 348m MAUs and 166m Daily Average Users (DAUs). The fact that penetration rates among UK Gen Z age groups are as close as they are illustrates just how good a job Snapchat does of reaching younger users in western markets (US and UK especially). One key way in which Instagram has built its playground popularity is by powering ‘digital peacocking’, with young users competing to have the best looking photos with the coolest filters getting the most numbers of likes. Instagram combines gaming dynamics with tweens and teens’ overriding to desire to define and identify themselves. Social media is playing a social and cultural role for Gen Z in utterly unprecedented ways. • Facebook: More Gen Z’s use Facebook than any of the youth centric messaging apps. 77% of UK 16-19 year olds use Facebook. On the surface this would suggest that Facebook remains the king of social castle. Appearances can be deceptive. Facebook got into messaging because it knew that its younger Gen Z Gen users just weren’t engaging with the platform that way older audiences were. Facebook is where Gen Z’s parents, teachers and lecturers are. It is a place for them to behave and keep up appearances like they would at a family occasion. Facebook is the social media equivalent of LinkedIn for Gen Z. • YouTube: Large parts of the recorded music sector have raised issues with the amount of money YouTube returns to artists and creators, but there is little doubting its continuing importance in the musical landscape. Unlike most other streaming services, YouTube is almost entirely ad supported and pays out on a share of ad revenue basis rather than a per stream basis. The effective per stream rates it pays to rights holders are significantly less than those of other streaming services. It might seem like the odd one out, but for Gen Z YouTube is not just a content consumption platform, it is a MIDIAresearch.com social platform too. 39% submit comments to music videos on YouTube while 25% upload music videos, whether they be cover

Music versions, mashups, lyrics videos or simply an unauthorized copy. YouTube’s unique mix of features and tech capabilities transform it into a massively social music app for younger audiences in a way that none of its audio competitors (other than perhaps SoundCloud) have yet been able to do so. Mark Mulligan June 2017 Gen Z Gen MIDIAresearch.com MIDIAresearch.com Gen Z Mark Mulligan Music June 2017 - - - - - Campaign results: the age group 13-24. entries comingfrom 12-13 year olds. Almost 75%of GRMDaily’s audience falls in Facebook andInstagram. The ages variedfrom of theparticipants 16-35withsome carried outacross variousdifferent socialplatforms withvideosreleased through maximising exposure andincrementing potential entries. This tactic was to spread theword aboutthecompetition by creating promotional YouTube videos, GRM Daily alsousedsecondaryinfluencers like Big Tobz, Mikill Pane and Avelino GRM Daily website. #TheGhettsDown. The entrieswere thencollected onacustom tabonthe mental, submittingtheresults asvideosthrough Twitter andInstagram usingthe download. GRMDaily invited fans to write lyrics andthenrap themover theinstru snippets of musicfrom theshow, released onitsSoundCloud channel asafree The contest started withGRMDaily creating ahip-hopinstrumental track using The Campaign: motion withurban-entertainment site GRMDaily targeting itsGen-Z audience. paign offered thechance to winastudio session withMCGhetts, of apro aspart latest originalshow, The Get Down, anditsfocus of hip-hop. onthebirth The cam The campaignfrom video-streaming serviceNetflix promoted the release of its Aims: #TheGhettsDown Campaign CASE STUDY: NETFLIX/GRMDAILY ------6,690 views onGhetts Launch Video 360,376 total impressions 22,177 views 7,157 clicks 2,699 track downloads 1.6m+ Impressions Reach 53.6k+ Instagram: Timeline Deliveries 49m+ 2.1m+ Reach Twitter:

- - - Figure 2: Although YouTube Is Firmly Embedded Across All Demographics It Means

Music Different Things to each Generation Penetration Of Weekly YouTube Usage By Age, UK Mark Mulligan June 2017

YouTube is the most pervasive content platform on the planet, with audiences from cradle to grave. The way in which YouTube has fostered content communities across such a diverse mix of content types ensures that it can be all things to all people in a way no other digital content platform can. For Gen Z in the UK this ranges from parents putting toddlers in front of a tablet playing kids TV content from YouTube, through tweens watching vloggers to teens watching clips and .

Gen Z Gen Penetration accelerates quickly from 27% among under 8s to 73% for 8-11s, 87% for 12-15s and a ubiquitous 94% for 16- 19s. What is clear is that from the age of 8 YouTube becomes utterly pervasive among UK Gen Z. By the time audiences turn 20 YouTube penetration drops. In part this reflects kids growing out of much YouTube content and also simply having less spare time to spend in front a screen. But in addition to these life stage factors, there is also a cohort trend as well. Namely that YouTube is embedded in Gen Z’s lives to a higher degree than any previous generation. So there is a strong chance that YouTube penetration will increase in older demographics as the Gen Z cohort ages.

The fact that YouTube has such wide reach among Gen Z indicates the amount of influence it has culturally and socially. Gen Z is spending progressively less time with traditional media and traditional media talent, focusing their time instead on social MIDIAresearch.com talent. For Gen Z it is the YouTube stars that represent fame and stardom not TV presenters. In fact, for many Gen Z’s Music YouTubers are playing the role that pop stars once did for young adolescents, giving them a voice for their generation. The fact that their parents just don’t get YouTubers is exactly the point. Now that music has such strong multi-generational reach, older generations co-opt the hits of younger generations’ artists, thus stripping Gen Z of the ability to identify around that music. And the sheer scale and reach of YouTube talent should not be underestimated. These are the top 5 YouTube stars among UK Gen Z:

1. Zoella: 11.8 million subscribers, 0.9 billion cumulative views 2. Dan DTM: 15.3 million subscribers, 10.1 billion cumulative views 3. Joe Sugg: 7.8 million subscribers, 1 billion cumulative views 4. Stampy: 8.5 million subscribers, 6 billion cumulative views Mark Mulligan June 2017 5. KSI: million 16.1 million subscribers, 1.2 billion cumulative views

The reach of these YouTube stars among their target audiences far exceeds that of any traditional media celebrity, as does their ability to mobilize audiences. For example when Alfie tweeted that he would be at Waterstones on Oxford Street for the launch of his book the next day 10,000 people turned up. Meanwhile Joe Sugg has the best ever selling graphic novel in the UK while his sister Zoe Sugg (Zoella) has one of the best selling make up brush ranges. Gen Z Gen MIDIAresearch.com MIDIAresearch.com Mark Mulligan Music Gen Z June 2017 Olly Murs -24HRSOllybot CASE STUDY: SONY MUSICUK/THEBOT PLATFORM music, tickets andexclusive content. message itthrough Facebook Messenger askingquestions, accessingplaylists, Sony commissioned The Bot Platform agency to create theOllybot. Fans could The mainage group targeted for thiscampaignwas 14-20 year olds. The Campaign: as well asto attract younger Gen-Z streamers. chart fifth album ‘24HRS’. Theaims were to re-engage Olly’s existing social fanbase, ‘Ollybot’, to helpfans findoutinformation aboutandcontent from Olly Murs’ This campaigncreated adedicated messagingbot onFacebook Messenger, the Aims: - - - Facebook Live third biggest day of thecampaign interms of reach. - Twitter Q&A Other CampaignElements: ries andGIFs. from other socialsites such asInstagram and Twitter by usingInstagram Sto The labelalsorevamped Olly’s Facebook page andredirected hisfans to thebot own. The contest attracted 58,000entries, withOlly choosing thewinner. ring inhisown lip-sync videofor single ‘Grow Up’, andinviting fans to make their competitionThe Musical.ly was thefirst one for Sony MusicUK, withOlly star interactive video. toan opportunity listen to snippets of sixtracks before therelease through this had happened thenight before, tyinginto thealbum’s “24 hour” title. Fans had andwhenfansof clicked aparty onitthey could back time”“turn andseewhat same timebeingable to listen to thealbum. The videoshowed theaftermath This website allowed fans to engage andplay withthemusicvideowhile at the album teaser website was alsolaunched ten days priorto thealbum’s release. for thealbumappeared withlinks to iTunes, Amazon andSpotify. Aninteractive click onwiththewords “24 hours” elicited areply where aten-second teaser The fans could askwhatever they wanted while apre-set message for fans to details aboutupcomingconcerts. bespoke responses for key international markets, withexclusive content and not actually Olly. The responses were personalised withfans’ names, aswell as make thishappen, while alsotakingpainsto explain to fans that thebot was ‘real’ aspossible. They worked closely withOlly andhismanagement team to The labelwanted thebot to beasengagingpossible, andalsoto feel as 3m likes 10-secviews 2.6m 7.6m overall views Olly carried outa Twitter impressions andbecame the Q&Athat had6m

- - MIDIAresearch.com Mark Mulligan Music Gen Z June 2017 Connection Initiative - - - Stream to Unlock Initiatives hind songwritingandthemeaningof thelyrics. Where hisfans would beengaged by looking more into thecreative process be Genius Partnership - - - Snapchat Geofilters - You don’t know love ------More Results: 17s, away from YouTube andtowards paidstreaming services. butitalsohelpedtoartist migrate Olly’s young audience, theunder inparticular The campaignwas not only successful inre-engaging thefanbase for areturning people talkingto thebot intheprevious week. today, there are still fans engaged withthebot. Just recently there were still 350 eos andGIFs. The average timespentonthebot at thetimewas 4minutes. Even bot could serve 500bespoke responses andcontained150exclusive photos, vid active conversations, messages received. withmore than450k By that timethe After thefirst monthfrom launch, theOllybot hadalready attracted over 16,000 deluxe albums, which helpedto drive pre-orders. on that day. The users were thenretargeted through paiddigitalcampaigns, for dwell timeof 2m30s. Italsoresulted inanincrease of 30%in album pre-orders viewsThe interactive in24hours, videohadmore than230k andhadanaverage Campaign results: - - video from Olly If you connected onSpotify you hadthechance to get anexclusive personalised 2k videoteaser views new streams 10k 157,559 snapviews 24 geo-filters 20 cities 20k page views 20k Top trending hashtag 8m pushnotifications On Musical.ly: 3.2x Organic Reach &7.5x Engagement Trended on Twitter 6timesin3months 35m views across socials 23m views on 388m global streams throughout thecampaign overall fanbase growth500k across socials 25k Album pre-orders 5k new Spotify followers in24hrs 8k page views

- - Figure 3: UK Kids Quickly Grow Into Watching Music Videos On YouTube

Music Monthly YouTube Videos Viewed By Type And Age, UK 2016

Despite its diverse appeal and content base, YouTube is best known within music industry circles as a music video platform. Music is indeed a major of the YouTube proposition. According to MIDiA’s State Of The

Mark Mulligan June 2017 YouTube Music Nation report, music accounts for 30% of all YouTube streams although by watch time this is lower (with YouTubers like KSI and Zoella over indexing in time spent due to their much longer average video lengths). Among younger audiences, of course, music plays an especially important role and this is reflected in how Gen Z’s YouTube consumption and how it evolves with age. Music video evolves from being the 3rd most viewed category among 5-7 year olds to the most widely consumed by 12-15 year olds, just edging out ‘funnies’. Music slightly increases its share of overall penetration as Gen Z ages Gen Z Gen but the rest of the field makes up a lot of ground too, albeit at a slightly slower rate than music. As teens get older, for all the new appeal of YouTubers, music continues to have an irresistible pull as they transition to adulthood. MIDIAresearch.com SECTION II: Late Teens Deep Dive: Streaming’s Native Generation

Music Figure 4: Though Music Is More Important To Teens, It Is As Part Of Their Social Lives that Music Comes Alive Key Attitudes to Music of UK Teens Compared to all Users Average, January 2017

Though we identify via music more when we are young,

Mark Mulligan June 2017 it plays a central role throughout all our lives. Thus while more 16-19 year olds (85%) say that music is an important part of their lives, that is only 8 percentage points higher than for the all consumers average. Scratching beneath the surface a little, exactly what a 45 year old might mean when she says music is an important part of her life is probably different from what a 16-19 means. Nonethless, what is clear is that music matters to us all and a little more so for teens, despite all of the competition from social media, messaging apps and video services.

Gen Z Gen Where teen attitudes to music really stand out though are with regards to what it means to them. 74% of UK 16-19 year olds state that music for them is about going out and having fun, compared to just 53% of overall consumers. This isn’t all about going out to gigs though. In fact only 15% of UK 16-19 year olds regularly go to gigs, compared to 16% of overall consumers. They’d probably like to be going to plenty more but limited disposable income and home curfews get in the way. Instead this reflects a more general sense of music being the soundtrack to their social lives, when with friends, in bars and clubs (when they can get into them). For older consumers life (mortgage, kids, demand jobs etc) increasingly gets in the way of an active social life. Music

MIDIAresearch.com becomes more about remembering those teenage nights out. Despite their demonstrated preference for free music, such

Music as YouTube and Vevo, UK teens are actually more willing, in principle at least, to pay for music. 67% consider music to be something worth paying for regularly compared to 56% of overall consumers (MIDiA Research Consumer Survey 01/17). This is perhaps a keener reflection of just how important music is to them than it is a clear indicator of willingness to pay. Mark Mulligan June 2017 Gen Z Gen MIDIAresearch.com Mark Mulligan MIDIAresearch.com Gen Z Music June 2017 Key Streaming Attitudes of UK Teens Compared to allUsers Average, January 2017 and Albums Figure 5: Streaming is Transforming UK Teens’ Relationship withMusic, away From Artists

and theBeatles. The current shiftthoughisnot just away from was onbuilding superstars artist like Elvis, theRolling Stones was acomparatively scarce supply of content andthefocus In thoseearly decadesof therecorded musicbusiness, there 1960s, itisinfact something much bigger andmore fundamental. merely areturn and to thesingles orientated modelof the1950s year olds iseven more dramatic. Although someargue that thisis is significantenoughinitself, thecorresponding 74% for 16-19 mainly listening to single tracks andplaylists instead of albums Although thefact that 55%of allUKconsumers say they are don’t already have pre-existing consumption habitsto unlearn. music andtheeffects are most pronounced amongteens who catalyses them. This isexactly what streaming isdoingto Transformational technology meets emerging userneedsand superstars, andindeedwhether the superstar era may be fading. the future willlook like for thenext generation of potential music that fillstheirsocial feeds. Which raises questions aboutwhat torrent of continually updated andessentially transient content digital experiences. Musicis becomingincreasingly like the that musicconsumption for teens ismirroring that of theiroverall to beexceptions to prove therule (egEd Sheeran) butitisclear will still dothat for theirfavourite artists, andthere willcontinue the needto dive into albumlistening sessions. Ofcourse fans into curated playlists, musicfans simply don’t have thetimeor music beingreleased every day andthat content beingpushed albums butfrom centricexperiences. artist Withsomuch new Mark Mulligan MIDIAresearch.com Gen Z Music June 2017 transforming both how teens consumeanddiscover music. overall consumers radio comes1st with45%. Streaming isthus consider radio to betheirmaindiscovery platform. While for more significantisthat thisisthe exact sameshare that compared to 32%for theallages average). Butwhat iseven services to betheirmainway of discovering new music(37% olds are only marginally more likely to considerstreaming When itcomesto discovering new music, UK16-19 year Figure 6: UK Teens Over-Index For All Digital Activities, Especially Video And Social

Music Penetration Of Key Monthly Music Activities Of UK Teens Compared To All Users Average, December 2016 Mark Mulligan June 2017

The behaviours of young Gen Z consumers will shape the future of the music business and content consumption as a whole but the more immediate impact will be made by the upper end of the Gen Z age bracket: the late teens. Looking at the wider digital behaviour of these consumers in comparison to the overall UK population it is clear that this is a super engaged group that is much more active than average across all forms of digital entertainment and communication. YouTube and social media unsurprisingly dominate, with much higher penetration rates than the overall population even though the overall top 3 rankings are the same for both segments. Gen Z Gen Some of the most interesting differences are seen in video. Although subscription video penetration (eg Netflix) only over indexes by 13 percentage points, watching TV shows on phones is 54 percentage points higher for teens. This reflects both the mobile centric worldview of teens but also the fact that it is their personal device which they have more control over than, for example, the TV in the living room. MIDIAresearch.com MIDIAresearch.com Gen Z Mark Mulligan Music June 2017 To All Users Average, December2016 Penetration OfKey DigitalActivities Of UK Teens Compare Radio Figure 7: (Free) MusicPlays ACentral Role InGen Z’s Behaviour, IncludingOld Fashioned

• than any previous generation andthey are usingthemto thefull: Young music fans have more consumption options available to the • free etc) comesareasonably close 2ndwith71% butwith YouTube users). Free audio streaming (SoundCloud, Spotify teens watching musicvideo(ie87%of all16-19 year old usage YouTube and Vevo lead theway with82%of older though isonfree musicconsumption. Interms of monthly £5 amonthNUSmusicsubscription. Their mainimpact UK musicbusiness, going to gigsorpaying for adiscounted the UKare already contributinginameaningful senseto the career orgoing to university, many 16-19 year olds in Free dominates: thus have aveneer of legitimacy that P2P never had. apps are obtained viathe Apple andGoogle app stores and face of music piracy. Along with stream rippers, free music to get music. Free musicapps thoughare of themodern part shows.TV Thus, just 12%of 16-19 year olds useP2P networks though isstill quite useful to many for acquiringmovies and ownership. Itmeansmuch less to Gen Z inamusiccontext, technology that was designedintheage of downloads and Piracy still there, albeit inadiminishedstate: free streaming willalways beastrong fit for theirlife stage. strongly to UKteens). Teens are timerich butcashpoorso (+46 percentage pointsiefree audio streaming appeals very a very pronounced deviation from theallconsumeraverage Whether they beembarkingontheirfirst P2P isanold MIDIAresearch.com Gen Z Mark Mulligan Music June 2017 • focus onengagement to andthingsstart look very different. doing fineamong16-19 year olds butdigalittle deeperand industry currency. So by theold world measures radio is has abandonedthemetric) butfor now itisstill acore music the death of themonthly active user(Snapchat for example activity. Inapp measurement we are already beginningto see a monthisprobably abetter measure of inactivity thanitis measure of genuine activity. Indeed, doing something just once current mobile app defined era, monthly usage canbea weak just 3percentage pointsabove theallages average. Butinthe 19 year olds listen to musicradio onanat least monthly basis, than overall reach. This isreflected inthe fact that 71% of 16- among younger audiences butinterms of timespentrather many years yet to play out. The fastest change istakingplace steadily replacing /becomingradio butthat transition has Radio retains reach: Make nomistake, streaming isslowly but MIDIAresearch.com Gen Z Mark Mulligan Music June 2017 CASE STUDY: DEEZER-GrimeChannel Ed Sheeran singing “” ( Remix) at theBRIT Awards. in onemontha330%increase. The biggest peakcameafter his performance with ruary thisyear, there was auserratio increase of 54%from theprevious day and first single ‘Big For Your Boots’ from hisdebutalbum ‘GangSigns&Prayer’ in Feb and subsequently thechannel andplaylists within. WhenStormzy released the music releases alsocontributed to thegeneral increase inpopularityof thegenre of thechannel asfans shared news across theirown socials. Performances and Deezer alsoleveraged thepopularityof featured to artists increase thepopularity week after therelease of hernew EP. 5th most popularfor Gen Y andGen Z). Herstreams increased by 107%inthefirst most popular for Gennow thefifthmost onDeezer populargrimeartist X, (6th initiative for emerging artists: grimestar LadyLeshurr was oneof them, andis os, aswell asalbum promotions. Deezer alsobrought grimeinto itsDeezer Next associates withinthesceneto create playlists, podcasts, interviews andvide Deezer alsolaunched agrassroots program, collaborating and withgrimeartists the UK. It’s Deezer’s most popularGrimeplaylist andoursecondmost popularplaylist in and Skepta. Instant Grimefocuses onthebiggest current tracks intheUK. fathers of GrimeandInstant Grime. The first, focuses onbignameslike Stormzy Deezer created two mainplaylists for thenew channel inlate October 2016: God a streaming service, which Deezer hopedwould helpdifferentiate itfrom rivals. er, upandcominggrimeartists. Itwas thefirst example of thiskind of channel on Deezer theirmainstreaming platform by puttingthespotlight andfocus onsmall One of thekey campaignstrategies was to get Generation Z grimefans to make biggest for grimeartist Gen-Z listeners, followed by BugzyMalone thenKano. grime channel are younger than24. The service’s data shows that Stormzy isthe Grime isagenre withastrong Gen-Z audience: more than50%of fans onDeezer’s Campaign andresults: attract more Gen-Z grimefans to thestreaming service. accessed), to whoseprofiles identifyartists could begrown onDeezer, and to on itsplatform (givingthemasingle platform from which theircontent could be Deezer’s mainaimsof thiscampaignwere to give avoice Britishgrimeartists Aims: - - - - Figure 8: Spotify And YouTube Dominate Music Behaviours Of UK Teens

Music Weekly Use Of Music Apps By UK Teens Compared To All Users Average, December 2016

Applying the Weekly Active User (WAU) measure to Gen Z music consumption reveals some trends that are as important

Mark Mulligan June 2017 as they are intriguing. YouTube (for music video) finds itself in 2nd place for 16-19s, behind Spotify. This ranking is the inverse of that for overall consumers and points to one crucial factor: for much of Gen Z, YouTube is a place for relatively casual, infrequent music consumption while Spotify is the place for more engaged consumption. 53% penetration clearly 53% appears high and may well over report to some degree, but this certainly appears to be evidence for Spotify being able to super serve the UK teen audience in a similar way that Snapchat does. Spotify appeals to music super fans among Spotify weekly teens while YouTube caters to the more casual teen listener. use by UK teens Gen Z Gen By contrast Amazon Prime Music and Apple Music both have just 12% penetration among 16-19s. Spotify’s free tier clearly plays a massive role here but that fact that SoundCloud is just 6% penetration illustrates that it is more than just about free. Curation, brand and product all play their role in building appeal among Gen Z, again much in the way that Snapchat does. MIDIAresearch.com MIDIAresearch.com Gen Z Mark Mulligan Music June 2017 Weekly UseOfMusicMessagingApps By UK Teens Compared To Over 20s, December2016 Rules Figure 9: AndDubsmashAre Musical.ly ARare Breed: MusicApps That Play By Gen Z’s

15 secondsongsoncontinualloop) issounlike other music Instagram andSnapchat encourage. The fact that outcome (eg music thesoundtrack to thedigitalpeacocking behaviour that streaming subscription for instead themMusical.ly makes behaviours of Gen Z. Rather thantryingto repurpose astandard having created anexperience that plays to theexisting digital ly users are females undertheage of 16). The successliesin apps that have pure Gen Z appeal (themajorityof Musical. makes thisclassof apps sointeresting isthat they are music them lip-synching ordancingto musicclips. supershort What enable users, amongother things, to clipsof upload short the leading examples of musicmessagingapps, apps that messaging apps andDubsmash. Musical.ly These 2apps are Two apps that attention deserve particular are themusic Dubsmash. compared to 12%of 16-19 year olds for and6%for Musical.ly fact that just 2%of 20+consumers intheUKusetheseapps Their clear, laser-targeted appeal to teens isillustrated by the of thiskindof product innovation infurther engagingGen Z. consumption experiences illustrates thesupreme importance

MIDIAresearch.com Mark Mulligan Music Gen Z June 2017 The Ultimate Gen Z MusicApp CASE STUDY: – Musical.ly and “entertainment socialnetwork”, users hasattracted worldwide more than200m stylesMusical.ly itself variously asa “global videocommunity”, “creative platform” + 10%increase innew users from January 2017to April2017 > 9.5musers intheUKandIreland Musers in42countriesEurope 60m 20% worldwide increase indownloads since July 2016 15m daily uploaded Musical.lys worldwide users +200m keyMusical.ly stats Alton Towers last summer. and Harvey attracted 50,000 viewers as they filmed themselves wandering around users,sion onMusical.ly racing past 2mdownloads in just afew weeks, while Max thanks to asystem gifts. of virtual The new app hasalready madequite animpres to stream live videofor upto 20minutes which canbe rewarded for theirefforts of sister platform Live.ly in July 2016may helpto address these. Live.ly allows users inability for Musers to directly monetise theirwork ontheplatform. Butthelaunch There are limitations –notably thebrief length of videos(upto oneminute) andthe includes hip-hop, R&B, Latin, danceand rock alongside pop. the app. Andwhile popisclearly thedominantgenre, thetop 20global songs often partnerships withlabelmarketers citingtremendous levels of engagement from offersMusical.ly for opportunities both established andnewer interms artists of more direct conversion route into streams andsales. Music subscribers to stream full-length songswithintheapp thereby creating a February 2017Apple announcedan “integration” that withMusical.ly allowed Apple the first majorlabel to agree in alicensingdealwithMusical.ly June2016, while in whohaveartists to turned theapp for promotional purposes. Warner Musicbecame the last 12months, withKaty Perry, ArianaGrande andWizKhalifa among themany The servicehasattracted theattentions of ahost of mainstream musicstars over and discovery. little surprisethat labelshave beenquick to embrace asatool Musical.ly for music Bling’, ‘Black Beatles’ and ‘Bad &Boujee’ over thelast two years, which makes it meme-friendly videomarketing that hasmade huge hitsof thelikes of ‘Hotline It isanapproach that fits well with–andhas even helped to fuel –the – oreven perform theirown songs. Musers (astheplatform’s users are known) record comedyclipsanddanceroutines along to thesonginquestion isprobably themost commonuse, althoughmany then uploaded to itself Musical.ly andother socialmediaplatforms. Lip syncing allowsMusical.ly theuserto record brief videos, which canbepaired to songsand ic, according to Vice while 75%are female. audience is very Gen Z – 64% of the app’s US users fall within the 13-24 demograph fans andcounting), Jacob Sartorius (17.3m) andtheUK’s Max&Harvey (4.08m). Its in just three years and hashelpedto make stars of thelikes of Baby Ariel(19.8m

- - MIDIAresearch.com Mark Mulligan Music Gen Z June 2017 www.MusicAlly.com Report of 21st June 2016. For more information andafree trialsubscription go to This isanabridged version of publishedby anarticle MusicAlly initsSandbox stant evolution. becoming another MySpaceor , thesite willneedto maintainitspaceof con entertainment andsocialmediato amassahuge youthful audience, butto avoid As for itself, Musical.ly thesite hasalready succeededincombiningtheworlds of Musical.ly. videosofMusical.ly thedanceandcreating cycle avirtuous between YouTube and releasing anOfficialDance Video version of hislatest videowhich helpeddrive using theplatform intheright way. caseinpoint,Jacob Sartorius isaparticular The key to successfor liesin musiccompanies seekingto withMusical.ly partner -

Conclusions: Expect The Unexpected

Music

The behaviours and attitudes of Gen Z can look both exhilarating and challenging to music companies. These are young music fans that need winning over and engaging. They are simultaneously in more digital places than any other generation but have so many demands on their time that they will simply not tolerate anything that they may perceive to just not be worth their time. But the intense levels of digital behaviour also mean that they can be some of the most engaged music fans in the digital arena:

• Gen Z are the most tech savvy generation yet: With the Millennial feedback loop accelerating the rate of innovation, Gen Z are not only the most tech savvy generation yet, The music industry needs more creative start ups to come up with other massively social experiences that can lend themselves to music use cases.

they are becoming more so with every passing month. Comfortable with managing multiple social footprints, communicating across multiple platforms and engaging in massively social digital experiences, Gen Z’s expectations

Mark Mulligan June 2017 are as high as their behaviour is sophisticated. Authenticity, relevance, shareability and context are key. They are growing up in an environment of content abundance so they not only can be discerning, they have to be. • YouTube is central: YouTube is a phenomenally important platform across all age groups, but for Gen Z it is quite simply irreplaceable. It is a video destination, a music app, a social platform and educational resource all rolled into one. YouTube’s relevance and importance to Gen Z cannot be exaggerated. At some stage the odds are that YouTube

Gen Z Gen will progressively lose appeal among younger audiences in the way that Facebook did. But that is not happening yet. • Music matters to Gen Z but it faces stiff competition: Gen Z have more competing demands on their time and attention than any previous generation, which means music faces unprecedented competition. The concept of the attention economy has been with us for some time, but for Gen Z it is quite simply how they frame digital life. With so much content being thrown at them from friends, brands, streaming services etc they have to be selective in what they engage with and how much time they spend with it. If you want to Gen Z’s attention your message has to be punchy, authentic and contextually relevant to their digital surroundings. This means not only making the content or marketing message fit the platform, it also means MIDIAresearch.com MIDIAresearch.com Gen Z Mark Mulligan Music June 2017 • • • the next new generation willbewaiting inthewings. Gen Z eventually grows outof many of thesebehaviours, cases. Then itneedsto themto support thehilt. Even if social experiences that canlend themselves to musicuse more creative upsto start comeupwithother massively has builtausecasearound music. The music industry needs isnotMusical.ly amusicapp. Itisasocialvideoapp that to drive personal metrics andforge adigital, socialidentity. do. Itrecognizes Gen Z’s needto share, connect andexpress, works for many of thesamereasons Instagram andSnapchat Music matters most to Gen Z whenithascontext: Innovation Hubisanexcellent first step inthisdirection. tech accelerator withrights andinvestment at itscore. BPI’s meaningful scale. Think of itsasanindustry widemusic rights modeloncetheconcept hasbeentested at some audience anddata andthenwork withlabelsto honethe pre-cleared pools of content to build publicbetas, generate platform where new emerging apps canget accessto small, now for musiccompaniesto develop acreative developer the streaming musicrule book. There isanopportunity that have truly moved thedialfor Gen Z, by not playing by to alesser degree Dubsmash, are theonly new musicapps nor even thoseof older Millennials. Sofar and, Musical.ly established rules, neithertherules of digitalimmigrants Instagram work andMusical.ly because they donot play by Don’t tryto make Gen Z fit your rules: testers for new ways to engage fans around anartist’s music. not adopted it. Now isthetimeto usingGen start Z asthebeta because older audiences still get theconcept, butGen Z has exclusively music). The albumwon’t disappear any timesoon content (which willincludemusicbutnot necessarily be Z acompellingreason to andtheir spendtimewithanartist doesn’t matter. What does, isthat theseexperiences give Gen apps, instreaming servicesorviamessagingapps almost centric experiences: Music companiesneedto findnew ways to build artist- so you rarely get a2ndshot. Nailitfirst timeornot at all. and how to make itfitthat. Gen Z hasan excess of choice, understanding thecontext inwhich itwillbeconsumed Whether theseare delivered indedicated Apps like Snapchat, Musical.ly Musical.ly Mark Mulligan June 2017 midiaresearch.com Thanks for reading www.MusicAlly.com For more information visit: strategy anddigitalmarketing. managers andthewidermusic industry ondigital information serviceandadvisestrains labels, Music Ally publishesasubscription business All casestudies presented courtesy of MusicAlly.