The NPD Group: Music Remains an Important Line Item on Holiday Gift Lists

Even with a host of available free music-streaming options, new research from The NPD Group reveals that CDs and digital music downloads are still valued by consumers as holiday gifts.

PORT WASHINGTON, NEW YORK, December 10, 2012 – According to The NPD Group, a global information company, despite the rising use of Pandora, Spotify, Rhapsody and other options for streaming music, CDs and digital music downloads continue to be a relevant gift choice for many consumers. During last year’s holiday season, 29 percent of music purchased was a gift for someone else, according to NPD’s MusicWatch consumer tracking service. This year 12 percent of U.S. consumers reported that music would be on their holiday gift lists, and music gift buyers also intend to increase their spending on music by 18 percent compared to last year, which is the largest spending increase among all the gift categories NPD tracks.

“Whether their music taste is for One Direction or Rod Stewart, consumers know that they can’t go wrong with music as a gift, which is why we continue to see music on holiday gift lists, despite the expanding number of free music-streaming options,” said Russ Crupnick, senior vice president of industry analysis at NPD.

Based on information gleaned from consumers during the holiday season last year, more than one third (36 percent) of all music downloads were purchased with a gift card. “Music gifting is not just about festively wrapped CDs anymore, now that music consumers can now purchase iTunes, Rhapsody or Spotify Gift Cards at Target, Walmart, and other big-box stores,” Crupnick said.

NPD’s recent “Holiday Spending Survey” indicated that the percentage of U.S. consumers who listed music on their gift lists was higher than the percentage of consumers who planned on purchasing wallets and other fashion accessories (11 percent) or jewelry (10 percent). One quarter of consumers who intend to give music as a gift were between the ages of 18 and 34. According to Crupnick, “the widely held belief that younger music listeners no longer value traditional music-buying formats appears to be moot, at least when it comes to holiday gift giving.” 

Impulse shopping also remains quite important, when it comes to sales of CDs and digital downloads, and that’s where music really benefits from holiday shopping traffic. In fact, one in four CD purchases (26 percent) were driven by impulse purchases and 16 percent were motivated by in-store browsing. Walmart shoppers were most likely to purchase music on impulse (32 percent of Walmart’s CD sales); however, even online shoppers can’t resist buying music without planning to ahead of time. One quarter of Amazon CD buyers reported they purchased CDs on impulse, and 22 percent of digital music download purchasers cited “buying on impulse,” as a key purchase driver.

Data note: Information in this press release was derived from NPD’s MusicWatch consumer tracking service. Survey data was weighted to represent U.S. population of Internet users (age 13 and older) and was tested for statistical significance at 95 percent confidence level. Additional information came from NPD’s “Holiday Spending Survey” based on an online survey that was fielded to U.S. members of NPD’s online consumer panel from September 4, 2012 through September 11, 2012.

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