Correlation is a statistical measure that indicates the extent to which two or more variables fluctuate together.
 

Bridge Ratings recently completed a correlation analysis for a music label to study the relationship between on-demand streaming behavior and digital download sales.

Bridge Ratings was given access by our client to on-demand and digital sales downloads for all songs streamed during a twelve-week period.

The goal of the study was to track these two variables (streaming and digital sales) to determine the correlation or relationship between the two.

Is on-demand streaming behavior predictive of digital download sales?

Is the relationship between on-demand streaming and digital sales different for different types of music?

When reviewing all songs from all types of music genres streamed on-demand, there was little impact on digital sales during the first two weeks.

Week three began to display sales activity as on-demand interest increased.

For songs which gained digital sales traction, by weeks five and six the relationship between streaming and sales was evident peaking at week seven and sliding during the following weeks.

For songs that were classified as Top 10 Hits - those songs that reached the top 10 in their respective genre categories (Pop, Country, Urban, etc), the impact of streaming on sales during the first two weeks mirrored (in general) that of all genres.

However, by week three it became clear the songs were breakouts as the impact of streaming - or the correlation between on-demand streaming and digital sales - was significant.

Click on image to enlarge.

The profile trajectory of top 10 hits is greater than overall music consumption peaking sooner (weeks five and six) and sustaining over the following weeks.

Comparing correlation between on-demand streaming and digital downloads becomes more clear in this chart:

The profile of a legitimate top 10 digital sales hit becomes a hit predictor in most cases during week three.

For a select few artists today (Taylor Swift, Jason Aldean, Sam Smith, etc), the relationship becomes evident much sooner sometimes in week one and certainly by week 2.

There are exceptions to these findings.

As pointed out in past Bridge Ratings studies, on-demand streaming and broadcast radio have a symbiotic relationship, i.e. each feeds the other in many cases.

Astute broadcast radio programmers and music directors will spot high on-demand streaming behavior early and will play those songs on the radio because they are appropriate for the station and their consumption indicates demand.

Just as often, on-air exposure of music affects on-demand streaming. Radio listeners have told us that they use broadcast radio as a curator of music available and will often become familiar to songs they like which they then seek out on on-demand platforms.

This behavior is mirrored on  digital download behavior as well.

Click on image to enlarge.

The relationship between radio, on-demand streaming and music purchase is a complicated but intertwined triangle each with potentially high correlation to each other.

And the value of on-demand streaming to broadcast radio programming becomes more clear when comparing correlations between airplay and on-demand streaming over the last year.

Comparing correlation between airplay and on-demand streaming in February 2014 with February 2015, the  mount of airplay a song receives based on streaming rank is growing. Programmers of music on the radio are more confident in the on-demand streaming metric as it applies to the songs that are chosen for airplay and this should only continue to increase over time.

Broadcast radio and record labels are becoming more comfortable with the value of on-demand streaming and its effect on popularity. Analysis as reflected in this study by Bridge Ratings provides clarity of this effect and hopefully will empower music-focused businesses for more valuable decisions.

As broadcast radio learns the benefits of on-demand streaming programmers are discovering that the perception of music by consumers may differ from the information being gathered through traditional music research means such as call-out, auditorium testing, M-Score and others.

The correlation study also clarified that the act of listening to on-demand streaming mirrors that of radio listening underscoring the value to radio programmers of on-demand streaming data

 

Bridge Ratings is a California-based company which has been observing and measuring media consumption behavior since 2002. Its clients include broadcast radio, internet radio, investment firms and legal entities with an interest in the media sector.

For advisement on this or other media consumption challenges, contact
Dave Van Dyke at 323.696.0967 or at dvd@bridgeratings.com.


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