New report underlines concerns of ‘value gap’ in music

IFPI 2016

A new report from international recorded music trade body IFPI highlights the dominant position of music services such as YouTube and the knock-on ‘value gap’ for creators.

The Music Consumer Insight Report 2016 shows that among the 13 countries surveyed, YouTube is the most used music service, with 82 percent of all visitors to the site accessing music.

This rises to 93 percent among 16 to 24 year-olds – over nine in 10 young people.

The study, undertaken by Ipsos Connect, also finds that most people using YouTube listen to music they already know than to discover new sounds.

Free video streaming is mainly used as an alternative to paying for music, with half (49 percent) of streamers doing so mainly ‘because it’s free’, while only a quarter (27 percent) do so ‘to sample before buying’.

The report also suggests that if YouTube charged for music access, new ‘payers’ for music would be brought into the market.

Currently, 13 percent of YouTube’s music users only access music via free means but say that they would pay for music if YouTube started charging. These users say they would either pay YouTube or use another means of paying.

Given YouTube has over one billion users, this would represent a significant number of additional people willing to pay for music, the study states.

Frances Moore, IFPI chief executive, said: ‘There are key insights informing the policy debate on music’s “value gap”, the biggest problem for today’s music sector.

‘The research highlights the dominant position amongst music services of YouTube, as well as the fact that the site is used by consumers primarily to access music they know, on-demand.

‘Yet YouTube can get away without remunerating fairly artists and producers by hiding behind ‘safe harbour’ laws that were never designed for services that actively engage with and make available music enjoyed by the vast majority of its users.’

Elsewhere, the report states that paid audio streaming is growing, with 71 percent of internet users aged 16 to 64 accessing licensed music. One third of 16 to 24 year-olds now pay for a streaming service.

However, copyright infringement remains a significant problem, as more than one-third (35 per cent) of internet users access unlicensed music content.

Infringement is changing, with half (49 per cent) of 16 to 24 year olds using stream-ripping services to download music.

Overall, the report states that young teenagers are still highly engaged with music, with 82 per cent of 13 to 15 year-olds listening to licensed music and the majority willing to pay for music.

Moore added: ‘There are many positives for the music industry in this research: streaming services have revolutionised the experience of the music consumer, with growing numbers paying for audio streaming services; listeners are responding to the benefits offered by on-the-go, on-demand access to music by moving more and more to the world of mobile, especially in emerging markets; and young fans are showing passion and engagement with music.

‘Record companies, and the investment they make in music, are at the heart of this change. That investment is all the more important in the digital world, driving the creation of new music and helping artists connect with their fans.’

Read the full report here.