Music and Other Audio - CDs, Streaming, Downloads & Podcasts - UK - April 2018

OVERVIEW
What you need to know
Products covered in this Report
EXECUTIVE SUMMARY
The Market
Streaming growth drives industry income growth of 15% in 2017
Figure 1: UK music industry income from physical, digital and streaming, 2012-22
Audio streams made up over half of music consumption in 2017
Key Players
More than eight in 10 free streamers use YouTube
Nearly six in 10 paid streamers use Spotify Premium
Voice-controlled speakers give greater focus to audio quality
Spotify adds new visual layer to podcasts with Spotlight
The consumer
Four in 10 people listen to a free music streaming service
Figure 2: Use of music formats, February 2018
The radio is the most popular device for listening to music
Figure 3: Device used to listen to music, February 2018
Opinion divided on how helpful voice control is
Figure 4: Attitudes towards smart speakers, February 2018
People want more music diversity from streaming services
Figure 5: Attitudes towards music streaming services, February 2018
Adverts in the middle of podcasts are less likely to be skipped
Figure 6: Podcast advertising, February 2018
What we think
ISSUES AND INSIGHTS
 VOICE-CONTROLLED SPEAKERS SET TO HAVE A BIG IMPACT ON MUSIC HABITS
The facts
The implications
Sound quality to become more important for smart speakers
Voice control alters how people discover music
Greater investment in podcasts
The facts
Consumers value podcast content
Podcast advertising becomes more sophisticated
THE MARKET – WHAT YOU NEED TO KNOW
Streaming growth drives industry income growth of 15% in 2017
Audio streams made up over half of music consumption in 2017
Voice-controlled smart speakers to impact music consumption
New rules introduced for Official Singles Charts to help new artists
YouTube under pressure from music industry
MARKET SIZE AND FORECAST
Streaming growth drives industry income growth of 15% in 2017
Physical market value falls less than expected
Figure 7: UK music industry income from physical, digital and streaming, 2012-22
Figure 8: UK music industry income from physical, digital and streaming, 2012-22
Segment forecasts
Figure 9: UK music industry income from streaming services, 2012-22
Figure 10: UK music industry income from physical sales, 2012-22
Figure 11: UK music industry income from digital sales, 2012-22
Forecast methodology
MARKET SEGMENTATION 
Streaming continues to drive market forwards but physical remains resilient
Figure 12: Music industry income, 2012-16
Audio streams grow to account for over half the music market
Figure 13: Volume of UK audio streams, 2014-17
The vinyl revival is not slowing down
Figure 14: Vinyl album sales, 2013-17
MARKET DRIVERS
Voice-controlled smart speakers to impact music consumption
Figure 15: Ownership and interest in smart speakers, April 2018
YouTube under pressure from music industry
New rules introduced for Official Singles Charts to help new artists
KEY PLAYERS – WHAT YOU NEED TO KNOW
More than eight in 10 free streamers use YouTube
Nearly six in 10 paid streamers use Spotify Premium
Spotify adds new visual layer to podcasts with Spotlight
Spotify launches new self-serve ad platform
Voice-controlled speakers give greater focus to audio quality
YouTube reportedly to launch new music streaming service in US
STREAMING SERVICES – MARKET SHARE
More than eight in 10 free streamers use YouTube
Figure 16: Use of free music streaming services, February 2018
Nearly six in 10 paid streamers use Spotify Premium
Figure 17: Use of paid-for music streaming service, February 2018
LAUNCH ACTIVITY AND INNOVATION
Spotify adds new visual layer to podcasts with Spotlight
Spotify launches new self-serve ad platform
Voice-controlled speakers put greater focus on audio quality
Spotify might be looking to introduce its own smart speaker
Spotify introduces RISE to help find new stars
Apple introduces new Analytics dashboard for artists
YouTube reportedly to launch new music streaming service in US
BRAND RESEARCH – STREAMING SERVICES
Brand map
Figure 18: Attitudes towards and usage of selected brands, April 2018
Key brand metrics
Figure 19: Key metrics for selected brands, April 2018
Brand attitudes: Spotify is viewed as offering more value for money
Figure 20: Attitudes, by brand, April 2018
Brand personality: Apple Music perceived as more unethical and exclusive
Figure 21: Brand personality – macro image, April 2018
Spotify is the most appealing streaming service
Figure 22: Brand personality – micro image, April 2018
Brand analysis
Amazon Prime Music is viewed as reliable and accessible
Figure 23: User profile of Amazon Prime Music, April 2018
Spotify has the strongest and most positive brand image
Figure 24: User profile of Spotify, April 2018
People consider Apple Music to be expensive
Figure 25: User profile of Apple Music, April 2018
Google Play doesn’t stand out
Figure 26: User profile of Google Play Music, April 2018
THE CONSUMER – WHAT YOU NEED TO KNOW
Four in 10 listen to a free music streaming service
The radio is the most popular device for listening to music
Many question the sound quality of smart speakers
People want more music diversity from streaming services
One in three listen to podcasts
Many are willing to pay for podcasts
USE OF MUSIC FORMATS 
Four in 10 listen to a free music streaming service
Figure 27: Use of music formats, February 2018
Figure 28: Use of music formats, by age, February 2018
Over one in four still buy CDs
Younger people are still downloading music
USE OF STREAMING SERVICES  
YouTube is the most popular streaming service
Spotify looks to boost advertising revenue
One in four free streamers listen to BBC iPlayer Radio
Figure 29: Use of free music streaming services, February 2018
Over half of paid-for streamers use Spotify Premium
Services look for ways of offering exclusivity
Figure 30: Use of paid-for music streaming service, February 2018
Figure 31: Repertoire of paid-for music streaming services used, February 2018
DEVICES USED TO LISTEN TO AUDIO 
The radio is the most popular device for listening to music
Figure 32: Device used to listen to music, February 2018
One in 10 use a smart speaker to listen to music
Two in three 16-24-year-olds listen to music on mobile devices
One in three have listened to a podcast in the last three months
Figure 33: Devices used to listen to podcasts, February 2018
ATTITUDES TOWARDS SMART SPEAKERS 
Apple looks to cater for audiophiles
Figure 34: Attitudes towards smart speakers, February 2018
Opinion divided on how helpful voice control is
Voice control to change discovery on streaming services
Collective vs individual listening
Removing the visual aspect of discovery could narrow music requests
ATTITUDES TOWARDS MUSIC STREAMING SERVICES 
People want more music diversity from streaming services
People struggle to remember music details when searching
Figure 35: Attitudes towards music streaming services, February 2018
One in four want to see their friends’ music
PODCAST PAYMENT AND ADVERTISING 
Podcasts show financial potential
Figure 36: Willingness to pay for podcasts, February 2018
Figure 37: Willingness to pay for podcasts, by age, February 2018
Figure 38: Willingness to pay for podcasts, by household income, February 2018
Adverts in the middle of podcasts are less likely to be skipped
Figure 39: Podcast advertising, February 2018
One in four often hear the same products advertised across podcasts
APPENDIX – DATA SOURCES, ABBREVIATIONS AND SUPPORTING INFORMATION
Abbreviations
Consumer research methodology
APPENDIX – MARKET SIZE AND FORECAST
Forecasts
Figure 40: UK music industry income from physical, digital and streaming, 2017-22
Figure 41: UK music industry income from physical, 2017-22
Figure 42: UK music industry income from digital, 2017-22
Figure 43: UK music industry income from streaming, 2017-22
Forecast methodology