Nielsen study shows off how people are consuming music

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Nielsen just dropped some stats about music consumer behavior that will probably make record labels a bit more nervous. The study uses a bunch of futuristic sounding terms like "hyper-fragmentation" and "digital natives," but when it boils down to it, reveals what we already know: People are consuming media in a wide variety of ways, but mostly not paying for it.

Not surprisingly, the study states that nearly 60 percent of people polled have streamed a music video over the last three months, which in and of itself, doesn't mean much. Since music videos can be embedded in blogs and social networks, it would make sense that the majority of people have watched one.

From there, the stats get a little bit wonkier. Almost 50 percent of people had downloaded a song without paying for it. Again, this is a little deceiving because it doesn't mean the songs were pirated. As we see every single week, bands are constantly giving away free songs. The real number is a little harder to track down, but according to a recent study performed in the UK, there was something around 1.2 billion illegal music downloads last year, as opposed to the 160 million in sales.

Here's the part record labels are going to be worried about. Fewer than 20 percent of Internet users worldwide paid for a song online; fewer still bought full albums. Of course, the other 80 percent of people weren't pirating music; it just means they didn't buy an album or song online. As we'd expect, sales were down last year across the board, as digital sales aren't rising as quickly as physical discs are dropping.

So what does it all mean for 2011? Nothing, really. But it does prove a few things that we already know: people like music videos now more than ever because they can watch them on demand, share them with friends and stream them whenever they want. Despite the fact YouTube added links to Amazon and iTunes two years ago, as a promotional tool music videos aren't really doing their job to sell more albums. Most importantly, while digital sales are still rising, they're not keeping up with the fall of physical sales, and a surprising large amount of people are still terrified of purchasing anything from their computer.

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