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The Premium Headphone Market Is Now A Billion Dollar Industry In The U.S.

Used to be that convenience was the name of the game with music consumption. Our players got smaller while our music libraries got bigger, and for listening on a mobile device it was all about the tiny, unobtrusive earbuds that likely came prepackaged with your mp3 player of choice. However, according to a recent report on music consumer habits by market research company The NPD Group, it looks like that the times, they are a-changin’.

In Headphones Ownership and Applications, the NPD Group notes that the premium headphone segment of the audio market – a segment which is made up of headphones with a retail price point north of $100 – has grown dramatically in the past year. What was once a niche market that was the purview of audiophiles and musicians, premium headphones now make up 43% of all headphone sales in 2012. This shift in consumer tastes was reflected in a 65% growth in unit sales in the first half of 2012 alone and has made the headphone market into a billion dollar industry in the US.

There are a number of factors that appear to have contributed to this shift in listening habits. The report notes that marketing has been a powerful driver of sales, with branded headphones such as the Jay-Z/Roc Nation endorsed line of Skullcandy products, 50 Cent’s SYNC by 50, and of course, the near-ubquitous Beats by (Dr.) Dre are all successful co-branding efforts of note.

Celebrity endorsements aren’t the only reason why consumers are switching to a big set of cans over in-ear models, coloquially known as earbuds. NPD also noted that the quality of sound is the greatest determining factor in influencing consumer sales, with 73% stating that it is the top influencer in their purchases. This is telling in how listening culture has shifted since the start of the mp3 revolution.

Earbuds, while certainly convenient, are not reputed for their high-quality sound. Most in-ear headphones do a poor job of blocking outside noise, muddling the listening experience. The drivers and speakers in earbuds, the things actually making the sound you hear, are constrained in size by design. As a result earbuds can only provide so much detail and depth to the sound, an issue that doesn’t effect bigger over-the-ear headphones. Finally, most consumer’s exposure to earbuds comes from the products that come bundled with whichever mp3 player they purchase, complementary accessories made on the cheap compared to premium headphones. Apple’s iconic earbuds, for example, have received mixed reviews from critics and consumers in the past. Even the updated EarPods released alongside the iPhone 5 still have their flaws.

This in now way means that every premium headphone is spectacular. Even the Beats by Dre line of headphones is guilty of this, providing sound that has an almost overwhelming low end at the expense of mid and high range sounds. But overall, it reflects music culture in 2012 to a T. Listening can’t get anymore convenient so now music consumers are craving quality. Listeners also happen to be listening to a lot of hip-hop and EDM, where you can never have enough bass. Consumer analysts should really just be watching what Dr. Dre does. He was right about gangsta rap, and he was right about headphones.

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