How Millennials Are Discovering Music
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Marketing Nov 2, 2016

How Mil­len­ni­als Are Dis­cov­er­ing Music

To woo lis­ten­ers, music plat­forms should get personal.

A fisherman reels in a pair of stereo headphones.

Michael Meier

Based on insights from

Kent Grayson

Libby Koerbel

How do mil­len­ni­als dis­cov­er new music?

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Online music plat­forms are eager to learn the answer in order to draw in mil­len­ni­als, who have dis­pos­able income and tastes that have not yet crystallized.

It’s a lit­tle bit eas­i­er to appease the old­er gen­er­a­tions who aren’t invest­ing as much time into new music,” says Lib­by Koer­bel, a recent Kel­logg School MBA grad­u­ate and now a strate­gist at Pan­do­ra, who queried mil­len­ni­al music lis­ten­ers under the guid­ance of Mar­ket­ing Pro­fes­sor Kent Grayson. Their goal: pro­vide music indus­try lead­ers with a deep under­stand­ing of the dis­cov­ery process for this demographic.

In addi­tion to sur­vey­ing 1500 peo­ple, Koer­bel con­duct­ed in-depth inter­views. The result­ing con­clu­sions, Grayson says, come with the author­i­ty of actu­al­ly hav­ing sat down with mil­len­ni­al lis­ten­ers and asked them.”

So what should music indus­try lead­ers under­stand about millennials?

1. Active lis­ten­ers fit three types.

Koerbel’s inter­views iden­ti­fy three dis­tinct lis­ten­er groups among mil­len­ni­als: rou­tin­ists” who enjoy hear­ing music that they already know; back­sto­ri­ans” who have nar­row tastes but are intense­ly inter­est­ed in the artists they like; and song­smiths” who con­nect emo­tion­al­ly with songs through their sound and lyrics rather than a par­tic­u­lar artist or genre.

For plat­forms, know­ing which type of user you are try­ing to appease can impact new fea­tures you want to showcase.

Back­sto­ri­ans, for exam­ple, are real­ly inter­est­ed in this oth­er con­tent beyond the music,” Koer­bel says. Right now, most ser­vices only have a lit­tle artist bio page, and half the time the bio isn’t even filled out!” Inte­grat­ing artist videos, per­son­al pho­tos, Tweets, or oth­er updates into a stream­ing plat­form could rep­re­sent a huge opportunity.

Plat­forms look­ing to appeal to song­smiths, on the oth­er hand, might con­sid­er going beyond pre­dic­tive rec­om­men­da­tion sys­tems that tend to favor more of the same con­tent — great for rou­tin­ists, less so for song­smiths — and instead con­sid­er more hands-on cura­tion to delight users with new music that push­es the bound­aries of a songsmith’s taste profile.

2. Attract­ing lis­ten­ers requires ful­fill­ing a spe­cif­ic need. Retain­ing them will require more.

Among all groups, the most pop­u­lar ways to con­sume music is via YouTube, Pan­do­ra, and tra­di­tion­al radio.

Regard­less of what you are look­ing for out of music, or what your moti­va­tion is for dis­cov­er­ing new music, those ser­vices are ubiq­ui­tous because they’re ful­fill­ing a spe­cif­ic need,” says Koerbel.

She describes YouTube as Google for music” — a place where peo­ple can access any song on demand. Pan­do­ra is the plat­form of choice for back­ground lis­ten­ing — at work, at par­ties, when hang­ing out with friends, or when get­ting ready to go out. And radio? For car rides, of course. Sur­pris­ing­ly, radio still is used by a major­i­ty of mil­len­ni­als who are look­ing for a con­ve­nient way to lis­ten to music in the car that will not drain their data packages.

At the moment, plat­forms can’t do both acqui­si­tion and reten­tion real­ly well.” — Kent Grayson

The con­ve­nience that dig­i­tal plat­forms offer direct­ly address­es the cur­rent focus of the indus­try: achiev­ing scale.

Giv­en the con­tent costs and the costs of run­ning the busi­ness, the only way to make mon­ey is to have as many peo­ple on your plat­form as pos­si­ble,” Koer­bel says. Plat­forms are more valu­able to the music indus­try if they can say, I have over 80 mil­lion month­ly active users in the U.S., and I can tell adver­tis­ers about their lis­ten­ing behav­ior.’ In order to do that, peo­ple are try­ing to appeal to every­one, which can be a down­fall for a lot of these services.”

But keep­ing those lis­ten­ers over the longer term will be a dif­fer­ent, more com­pli­cat­ed, step.

At the moment, plat­forms can’t do both acqui­si­tion and reten­tion real­ly well,” Grayson says. Some can try, and maybe as plat­forms devel­op, the big­ger ones will start with one and then get good at the other.”

Part of the prob­lem is the ease with which lis­ten­ers can aban­don ship as soon as one plat­form no longer meets their needs, or anoth­er pro­vides a more engag­ing, nov­el experience.

A lot of these ser­vices fill a need in the moment, like, Oh I want to lis­ten to this song, or I want some music to ele­vate my mood,’” Koer­bel says. I think the strug­gle is then giv­ing the lis­ten­er more vari­ety in their expe­ri­ence, whether that’s in the type of music or the way it is delivered.”

3. Con­sid­er an adven­ture dial.”

To pro­vide this vari­ety, plat­forms might con­sid­er encour­ag­ing more user inter­ac­tiv­i­ty. What’s miss­ing in cur­rent plat­forms is the place for input that feels real­ly nat­ur­al,” she says. These lis­ten­ers are peo­ple that active­ly invest time in music. They’re not going to be as eas­i­ly scared away by more inter­ac­tion. But there’s nev­er an adven­ture dial, to say, Today I’m feel­ing adven­tur­ous. Why don’t you give me some­thing ran­dom or cool?’”

Inter­ac­tiv­i­ty would also address the real­i­ty that, no mat­ter which over­all seg­ment a lis­ten­er falls into, her moti­va­tions for lis­ten­ing will change from day to day.

To illus­trate the down­side of assum­ing con­sumer intent, Koer­bel shares a sto­ry about try­ing to pur­chase an e-book for an upcom­ing vaca­tion. Online, she was shown rec­om­men­da­tions based only on her pre­vi­ous order­ing his­to­ry. The prob­lem? The books I’d been down­load­ing the last three months had been for my class­es, and now I’m going to the beach, so I’m in a dif­fer­ent cir­cle now. The site keeps try­ing to push me busi­ness books, and I’m tired of read­ing busi­ness books,” says Koerbel.

4. Seg­men­ta­tion should not be set in stone.

Some of the most obvi­ous take­aways for the music indus­try — per­son­al­iza­tion, vari­abil­i­ty in the user expe­ri­ence, and the oppor­tu­ni­ty to pro­vide more robust input — are like­ly to be cost­ly for plat­forms to adopt. They may also com­pli­cate the user experience.

You devel­op a prod­uct that is per­fect for peo­ple in one seg­ment and it is like­ly to be imper­fect for some­one else,” says Grayson.

Addi­tion­al bells and whis­tles could intim­i­date a more casu­al lis­ten­er — while efforts to cus­tomize the lis­ten­ing expe­ri­ence for some audi­ence seg­ments — artist para­pher­na­lia for the back­sto­ri­ans, for instance — may come across as irrel­e­vant, or worse, to songsmiths.That is, if rou­tin­ists, back­sto­ri­ans, and song­smiths are still the most rel­e­vant audi­ence seg­ments by the time these fea­tures become available.

The ques­tion of seg­ments is one of the biggest ques­tions that any com­pa­ny can answer,” Grayson says. How many seg­ments should we use to define the mar­ket? How refined should we be? Com­pe­ti­tion comes in, the world changes, new prod­ucts are intro­duced, and the way that you’ve defined your seg­ment starts to have less value.”

Think of the cur­rent descrip­tions that emerged from the sur­vey as a snap­shot of today, he says. Com­pa­nies can stick too long with what they learned two years ago with­out updat­ing. That deci­sion might make them vul­ner­a­ble to a competitor.”

Featured Faculty

Kent Grayson

Associate Professor of Marketing; Bernice and Leonard Lavin Professorship

About the Writer

Dylan Walsh is a freelance writer based in Chicago.

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