Does a song cost a penny?

Record (1)

Lincoln Penny

Before the Internet…

Radio and recorded music have been distinct businesses, with ad-based radio driving music disk sales. The power of the Internet is quickly erasing this hundred-year-old division, blending radio and recorded music into an integrated and personalized whole.

Part 1: How much does a song cost?

According to Price Waterhouse Coopers, audio media (radio and recorded music) is a $29B business with three main components: Radio ($19.72B = $16.38B Terrestrial + $3.34B Satellite ), online music services ($3.34B) and recorded music ($6.22B = $3.85B digital and $2.38B physical). Assuming ~300 million Americans listen, that’s $97 per person per year for recorded audio. [I’m not including live concerts, an additional $8.91B business.]

Audio, like video, requires some hardware, $7.76B last year, according to the Consumer Electronics Association, or $26 per person. In addition, audio hardware (575 million devices in the USA) uses 1.8% of residential energy, that’s 190 kWh/year at $.12/kWh or $9 per person.

$97 + $26 + $9 = $124/year = $11/month per listener.

For this we listen more than two hours a day. 

Time Estimates (per day, in hours:minutes)

Source

Radio

Music

Radio + Music

US Census

1:58

0:27

2:25

Nielson

*1:36

NOP

1:27

Kaiser**

0:38

1:53

2:31

Veronis

1:48

0:33

2:11

eMarketer

1:26

USA Touchpoints

2:12

0:26

2:38

NAB  report (page 16)

1:48

0:48

2.36

Bain

0:35

NedGam.es

1:45

0:30

2:15

*Averaging 1:59 for 243 radio million listeners, 0 for the 57 million non-listeners.
** Survey of 8-18 year olds

At 67.5 hours per month (2:15 * 30) per person we (300M American listeners) are paying a mere $.15 per hour

$.15/hour seems reasonable compared to $0.50/hour for TV or $2/hour for books. It combines the time and cost of rented music (radio and Internet music services), purchased music (disk and digital) and free (pirated) music.

Audio: Music Service  Versus Music Purchases

Radio, Satellite & Internet music services

Disks & digital music sales

Revenue ($M)

$23,060

$6,230

Time per person per day

1:45

0:30

Revenue per month per listener

$6.41

$1.73

Revenue per listener hour

$.12

$.11

Revenue per 4 minute* song

$.01

$.01

*Average song length 227 seconds or 3:47

Q: Does a song cost a penny?
A: Yes, one play costs one penny ($.01).

Song length stats

Song length

 

 

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