U. S. MUSIC INDUSTRY YEAR-END REVIEW 2013 U.S. Music Industry Year-End Review Copyright © 2013 The Nielsen Company WELCOME ERIN CRAWFORD Music is everywhere. Anybody that doubts the impact of music in popular culture needs SVP Entertainment to look no further than a review of 2013. Beyoncé bookended the year - first with her performance during the half-time show at the Super Bowl (joined by her former Destiny’s General Manager, Music Child bandmates) and closing the year with her “surprise” audio/video release, which has Nielsen already become one of the ten best selling digital albums of all time with over a million digital albums sold in just three weeks. In between, music fans were treated to a year of creative release events by such artists as Jay-Z, Justin Timberlake, Lady Gaga and Daft Punk. In addition to the great awards shows and celebrations, such as the Billboard Music Awards and the Grammy Awards, we were also brought the first YouTube Music Awards, celebrating the consumer’s favorite video streams of the year – this amid continued growth in all forms of music streaming. With year-over-year growth of 32% in streaming consumption (to over 118 billion streams) and with Nielsen consumer research showing that 68% of U.S. consumers reporting streaming music in the past year, we are seeing a surge in music consumption. As is always the case with the music industry, technology is an ever-changing driver of how music is consumed, and today’s consumer has more access to music than ever before - from their connected devices to the all-access models that digital presents. What you will see in this report is a snapshot of the year in music - everything from sales and consumption, to consumer research, to trends in the industry and a recap of the biggest events of the year. The music industry and the music consumer are changing and at Nielsen we are constantly analyzing these changes. So let’s take a look back at 2013 - all the while with anticipation for what surprises 2014 has in store for us. 1 U.S. Music Industry Year-End Review NOTABLE 1 INDUSTRY EVENTS SOUTH BY SOUTHWEST ABOUT Nielsen teamed with SXSW to present “The Buyer and the Beats,” a groundbreaking study which identified that an incremental WELCOME $450 MILLION to $2.6 BILLION could be spent on music by fans. THE AFICIONADO FAN We identified that this top-tier connoisseur of music, the aficionado, is willing to spend on all formats of music, including artist merchandise, concerts, and online streaming services. • 14 % of the total music consumer population are aficionado fans, and they comprise awhopping 34% of the share of music spend. • 68% of aficionado fans are very likely or likely to contribute to a campaign for exclusive content. RADIO SHOW ABOUT We released a white paper called “What Would Happen To The Music Industry If Radio Programmers Started Using Streaming As A Discovery Tool?” that talked about the role streaming plays as a potential way for the broadcast industry to benefit. KEY FINDINGS • 48% use radio as their primary source of discovering music in the U.S. • For Tim McGraw’s “One of Those Nights” and B. Smyth ft. 2 Chainz’s “Leggo,” our research found that as airplay continued to increase, with radio promotion and continued exposure, sales and on-demand streams lifted as well. • Pop twosome Karmin’s story shows how impactful on-demand streaming is. When they first showed up on YouTube, their videos racked up hundreds of millions of online video streams. Fast-forward ahead, and Karmin has an aggregate of nearly 3 MILLION digital tracks sales and over 23.4 MILLION streams since the beginning of 2013. CANADIAN MUSIC WEEK ABOUT Nielsen presented the State of the Canadian Industry report and awarded the BDS Cutting Edge Award and Nielsen SoundScan Emerging Artist Award to 93.7 JR FM and Victoria Duffield, respectively. ALBUMS 42.7 MILLION albums (including TEA) were sold in Canada in 2012, which was a 3.4% increase for the year, the highest since 2007. U.S. Music Industry Year-End Review Copyright © 2013 The Nielsen Company 2 2 TV & POP CULTURE THE VOICE YOUNG THE GIANT Contestant Matthew Schuler covered Young the Giant’s “Cough Syrup.” The week after, sales for the original track went up 764%. JACK WHITE Contestant James Wolpert sang Jack White’s “Love Interruption,” which saw an increase in downloads of 2,218%. THE X FACTOR CARRIE UNDERWOOD Carrie Underwood’s song “Blown Away” had a 54% lift, selling over 10,000 units the week after 13 year-old Rion Page sang it during her audition. CECE WINANS Lily McCloud’s version of CeCe Winans’ “Alabaster Box” brought tears to the judges eyes and the original track, released back in 1999, saw sales shoot up by 1,902% the week after the show aired. COUNTRY MUSIC AWARDS AUDIENCE 16.7 MILLION viewers tuned in to the CMA Awards show broadcasted on ABC. TWITTER 8 MILLION people saw 1.7 MILLION Tweets sent about the CMA Awards. JT IS BACK PART ONE The 20/20 Experience sold 968,000 albums its first week. PART TWO Six months later, the second part to the album, The 20/20 Experience Complete totaled 360,000 in sales in its first week debut. 3 U.S. Music Industry Year-End Review NFL/SUPER BOWL AUDIENCE Over 108 MILLION viewers tuned in. HALFTIME • Beyonce’s digital tracks saw sales lifts: Baby Boy (+394%), Halo (+338%), End of Time (+251%), Crazy in Love (+225%), Single Ladies (+140%), Love on Top (+88%). • The Destiny’s Child mini reunion resulted in bumps as well for “Independent Woman” (+550%), and “Bootylicious” (+347%). COMMERCIALS Music in commercials continue to be winners the week after the Super Bowl: • 95% increase in sales for Fleetwood Mac’s “Landslide” for Budweiser. • 36% increase for the Rolling Stones’ “Sympathy for the Devil” for Mercedes Benz. MTV VIDEO MUSIC AWARDS AUDIENCE 10 MILLION viewers tuned in for the show between 9:00 PM and 11:23PM EST. TWITTER The most shared Tweet came from E! Online asking how their followers felt about Miley Cyrus’ performance. It was retweeted over 18,000 times. STYLIN’ Harry Styles from the award-winning group One Direction tweeted “VMA,” which was retweeted the most – over 35 MILLION times. BILLBOARD MUSIC AWARDS AUDIENCE Over 9.47 MILLION viewers tuned in to the Billboard Music Awards in Las Vegas on Sunday, May 19, 2013, the highest ratings for the awards show in 12 years. #PRINCE Icon Award winner Prince’s hashtag #prince was used in 12,000 tweets. #MIGUEL The #miguel hashtag was tweeted 19,000 times and @MiguelUnlimited was mentioned over 36,000 times. U.S. Music Industry Year-End Review Copyright © 2013 The Nielsen Company 4 YOUTUBE AWARDS ABOUT The first ever YouTube Music Awards launched this year, honoring the best in the music video world. Held in New York City, the awards featured performances by notable artists including Arcade Fire, Lady Gaga, Eminem, and more. LINDSAY STIRLING The winner of the Response of the Year Award saw album sales jump up 385% one week after the show. GRAMMYS AUDIENCE Over 28 MILLION viewers tuned in. RECORD OF THE YEAR Gotye feat. Kimbra’s “Somebody That I Used To Know” had a sales increase of 101% and the album as a whole was up 124%. SONG OF THE YEAR Fun. featuring Janelle Monae’s “We Are Young” sold over 6 MILLION songs as of the Grammys. The song post-Grammy week increased 182%, while the album “Some Nights” increased 87% in sales. LATIN GRAMMY AWARDS SONG OF THE YEAR Carlos Vives won Song of the Year for “Volví a Nacer” and saw a 354% jump in sales the week after the awards. RECORD OF THE YEAR Given to Marc Anthony for “Vivir Mi Vida,” the song saw a 93% increase in sales after the Grammys. ALBUM OF THE YEAR Draco Rosa won Album of the Year for Vida, which increased 176% in sales over the next week. IN MEMORANDUM: Cory Monteith - May 11, 1982 – July 13, 2013 Cory Monteith, most recently known as Finn Hudson on the television series Glee, brought some of music’s most beloved songs to light in the comedy-drama. ALBUMS OVER 7 MILLION albums sold with the Glee Cast to date. TRACKS OVER 38 MILLION tracks sold with the Glee Cast to date. 5 U.S. Music Industry Year-End Review 2 3 A YEAR FOR APPS JAY Z/SAMSUNG APP Jay Z’s album sold 528,000 units during the first week it went on sale despite being a freebie in his Samsung app, marking a stronger first week than his previous album Blueprint 3. LADY GAGA’S ARTPOP APP Released as a free app the same day as her album, “Artpop” sold over 250,000 albums in the first week. MOBILE APP INSIGHTS GENDER SPLIT When it comes to gender, music mobile app and site users are equally split as of August 2013, a leveling out that has become more apparent compared to 2012, when the male/female split was 47%/53%. SESSIONS Males typically have 18 mobile app sessions a month, while females have 15. While the gender gap is closing, males continue to listen more frequently on these platforms and this trend seems to be growing. OS Operating system usage for music mobile site and app users are heavily Android leaning - 62% are Android users while 38% are iOS users. U.S. Music Industry Year-End Review Copyright © 2013 The Nielsen Company 6 4 THE MUSIC CONSUMER THE HISPANIC CONSUMER BUYING POWER This consumer has a projected buying power of $1.5 TRILLION by 2017.