The Musical Truth

The record biz is in a world of hurt and doesn't mind broadcasting the news far and wide. But while the source of its woes will be debated in business schools for years to come, studies are starting to emerge that document the demographics of music buyers and their changing behaviors.

The NPD Group recently released the results from its comprehensive 2002 survey, which includes roughly 100,000 consumer music transactions comprising the NPD MusicWatch panel as well as the MusicWatch Digital panel made up of 30,000 individuals who have agreed to let NPD monitor their computer use.

NPD says that the purpose of this research is to "factually define" the music buyer. To that end, the study tracks music buyers 13 years old and up on an ongoing basis throughout the year, with panelists reporting each week on how much music they purchased in the past seven days. In addition to noting which titles they bought, questions also focus on what influenced the purchase, whether or not the customer downloaded the tune prior to purchase, the price paid, and how satisfied they were with the transaction.

No surprise that, in general, music these days often attracts a younger shopper. The results indicate that teens and college-aged consumers have the highest per-capita sales rate, accounting for a third of all sales. However, the data also prove that the older consumer (that's probably you, Stereophile reader) cannot be ignored. Buyers who are 36 years old or older account for 45% of overall unit sales. NPD also says that this demographic will be growing the most over the next few years. Female buyers are also a key demographic, representing 52% of sales last year.

Downloaders are significantly younger—over half are under 25 years of age. Downloading is also more oriented to males. NPD says that the patterns are magnified for heavy downloaders: more than 70% of heavy downloaders are 25 or younger.

But here's the weird part. The RIAA would have us believe that downloading is the biggest culprit when it comes to declining sales, and kids are clearly the biggest downloaders. But the NPD study asserts that the biggest decline in music sales in 2002 occurred in the 36-and-older age brackets—not the group that downloads. Buyers 36–50 years of age bought 18% less music during the end of year "high season" for sales. The typical over-50-year-old buyer bought 16% less. Younger buyers, the 13–25 year-olds, averaged only 8% less in the same time period.

When those aging buyers were asked why they didn't buy as much in 2002, their overwhelming answer was that there was "less music I want to buy," followed by "prices too high." Downloading was a distant third for the older demographics, but not surprisingly was running neck and neck with high prices for the youngest, 13–17-year-old group, who found plenty of music they liked available.

Couple these results with the projected change in US age demographics over the next five years (more folks 46–54, only a few more youngsters 15–24) and the course for the music business seems obvious: focus your attention on the musical needs of the older buyer, and stop worrying so much about downloads. If the record companies can score with the 50-year-olds in the next couple of years, they may again have it made in the shade.