Business News Digital

Streaming is too expensive for the mainstream, says YouGov research

By | Published on Thursday 20 October 2016

Streaming Services in 2015

The music industry needs to develop lower-priced streaming services to sign up a significant portion of the 90% of UK adults yet to pay to stream, according to new research from YouGov and subscription technology company Zuora.

The need for a better range of paid for streaming services – beyond the £10 a month standard and £20 a month hi-def option – has been much discussed within the music community, of course.

Although mobile bundling, family packages and student discounts have all reduced the cost of subscription streaming for many consumers, it is generally thought that, to go truly mainstream, the streaming market needs to offer packages below £5 a month or which bundle music with other digital content.

The YouGov survey of over 2000 consumers reckons that about 10% of the UK adult population are now paying to stream. Of those respondents who are already signed up to a service like Spotify or Apple Music, 52% said they don’t expect to buy a CD ever again now that they have access to so much music on demand. Meanwhile 37% said that they “rarely” listen to the radio now that they can crank up music at anytime via their streaming service.

However, for those not currently paying to stream, price-point was a key issue, with 48% saying that the services currently available were too expensive. Of course, for core music fans, the £10 a month package is a very good deal indeed, given the quantity of music available, but for consumers who [a] use to buy about two CDs a year and [b] never asked for access to 40 million tracks, the current offer is less attractive.

Assuming it doesn’t want to slash the prices of streaming across the board, the challenge for the music industry is working out what a £3/4 a month service looks like, given it can’t be as good as the £10 service but needs to offer more than the free streaming services. Various attempts to launch mid-price streaming platforms in the past have, in the main, failed, though all eyes are now on Amazon, Pandora and iHeart who all have $4/5 options on the market or in the pipeline.

Commenting on the research, Zuora boss Tien Tzuo said: “Subscription-based music consumption is clearly gaining maturity, with well-established services such as Spotify and Apple Music, and new entrants like Amazon, offering endless access to content. However, with only 10% penetration in the UK music market, there is a lot more room to grow”.

He continued: “Modern consumers are looking for outcomes, more personalised experiences to match the value they get from their ongoing streaming music investment. The winner in this race will succeed by delivering the most compelling experiences matched with tailored pricing models that meet consumer expectations”.