Matthew Robson based his report on his friends' habits. It told Morgan Stanley what a lot of people already know...
Here are some of the things that he said:
Teenagers don't use Twitter even though they may have signed up to the service because texting Twitter uses up credit, and they would rather text friends with that credit). They realise that no one is viewing their profile, so their tweets are pointless.
Teenagers are using more and more media, but they were unwilling to pay for it.
Traditional media – television, radio and newspapers – are losing ground. Most teens cannot be bothered to read pages and pages of text while they could watch the news summarised on the internet or on TV".
The only newspapers that are read are the cheaper tabloids and freesheets.
Teens see adverts on websites - pop ups, banner ads - as extremely annoying and pointless.
Most teenagers enjoy and support viral marketing, as often it creates humorous and interesting content.
Now here is the kicker from the article:
Money and time are instead devoted to cinema, concerts and video game consoles. Downloading films off the internet is not popular as the films are usually bad quality and have to be watched on a small computer screen and there is a risk of viruses, Robson said."
Now we are seeing some empirical evidence of some of this from our research. Out research has been indicating for some time that notwithstanding the amount of movie/TV content that is being downloaded, the cinema industry is continuing to generate solid revenues. (This comes from looking both at the growth of the content download market in the P2P space and cross referencing that to the ABS statistics for cinema admissions ever since they have been collected).
What I think is interesting for the music industry is that virtually every new artist signed these days is marketing driven. That doesn't mean to say that they aren't talented. But there are very few artists that are signed that first build a grass roots following in the way that Bob Dylan or The Beatles or The Rolling Stones did when they were starting up. Now they come out of TV talent shows, become stars for five minutes on TV, have a hit album and that it it - make a couple of million and retire. That may be good for the egos of the people at the record company, but I would venture to say that the way that the people at all the big 4 music companies keep on going to expensive restaurants is based on the continuing sales - that is real sales where people pay real money from real bank accounts to buy real pieces of plastic - those sales are of back catalogue.
Yes - it is the boomers who continue to buy CD's and the CD's they keep on buying are repackages of the stuff that they bought in the 60's, 70's, 80's etc.
It is truly ironic isn't it that all the energy goes into selling new acts where the royalty rates are higher, the costs of marketing are higher and the tour support costs are higher... than ever before - meaning that the margins are tighter. And all the while the leakage to P2P downloads is growing ever higher too if you believe the Morgan Stanley report.
We not only believe it. We believe that the music companies are actively using P2P as a marketing device. What I don't get is what they are going to do when the older demographic who currently buy their music, get the new religion and find out that downloading is not that hard after all...That is when the back catalogue sales that are providing the margin that enables all the marketing spend dries up. Should be an interesting day.
