Music in the Cloud: Recent Survey Results from NARM and NPD Group

One of our newest members to the ng Connect Program is digitalmusic.org, the home for the digital initiatives of the National Association of Recording Merchandisers (NARM), the music industry’s trade association.  They have been instrumental in the development of digital music standards and practices today, and they recently evolved their Digital Think Tank working group headed up by Bill Wilson, NARM’s VP of Digital Strategy and Business Development, into this new initiation – digitalmusic.org.  Shortly after they became a member of ng Connect, one of the first things I did was attend their annual convention.

As someone who’s in the telecommunications business and attends typical telecom related events, my attendance at NARM’s convention was a unique experience.  One aspect that was particularly striking was the “year in review” where key subject matter experts talked about how the industry has fared over time, and for someone who hasn’t really looked at this in-depth, what stood out to me was the diversity in how music is now delivered as a result of digitalization.  Whether you buy it through an online store such as Amazon’s MP3 Music Store or have music streamed to you via Pandora or Spotify, you can probably find a channel that suits your needs.

More recently, the ng Connect Program worked with NARM and the NPD Group on a research report related to music listening and consumption habits, especially as it relates to having music delivered to you via the cloud.

To date, not many have really analyzed these new services, and people’s general interest in music in the cloud and the potential for this new trend.  But with the release of our findings, we hope to provide some insight in the minds of those who listen to music.  In particular, I want to focus on music discovery through cloud services.

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Graph 1

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At ng Connect we have found that music discovery and purchasing through the cloud could be quite interesting and have developed service concepts that explore this –such as the Media Hotspot.  With the Media Hotspot, if a consumer likes a song that’s playing on its jukebox, they can swipe their cell-phone over a sensor to instantly download the song.  Or a cloud-based app could be available to make purchasing a song as easy as pressing a button. In the survey, one in four people had an above average interest in finding new music and learning more about the artists in this type of setting.  And for passionate music fans, that number skyrockets to more than 80% (Graphs 1 & 2).

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What was also very interesting was the vastly different ways that people would be willing to pay for this music.  While about one-third of those surveyed preferred the Kindle model where the cost of the service was embedded in the cost of the content, the rest of the preferred annual fees, advertising, and usage fees about equally (~20%) and a small contingent (9%) preferred having a monthly fee via their service provider (Graphs 3 & 4).

I’m excited that NARM has joined ng Connect.  It’s through collaborations like this that the Program has been able to be a key influencer and mover of various industries.  I’m looking forward to not only what comes out next in our engagement with NARM, but also the collaborations that are taking place with our 80+ Members.

Daniel Chui
Alcatel-Lucent
www.alcatel-lucent.com

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