In his article Music Streaming Is Booming, and That’s a Problem for Music Sales Peter Kafka suggests the right price for a streaming subscription “might be $3 to $4 a month” (also see David Pakman’s The Price of Music).
Like everyone I would of course be happy to pay less than $10/month for my Spotify sub, but there’s a bigger elephant in the room.
The problem from my pov, and that of anyone else in a family environment, is that $10 a month only buys a single-user experience. Multiple users are not welcome! That’s really, really bad UX, especially since Netflix and Amazon Instant deliver multi-user.
The labels must allow Spotify, et al, to deliver a “family plan” at $10/month for the simple reason they’re not going to get additional subs from the average household anyhow. Which is a round about way of saying $3/month is the right price, but like Kafka I can’t see the labels buying in any time soon*. They have history of acting too late.**
Lastly, to the issue of streaming being a problem for music sales, of course it is, which Kafka admits. Just as piracy is a problem for sales, academic papers to the contrary (which simply don’t withstand the “bleeding obvious” nature of human behavior).
* Streaming cos could always offer a teaser rate to see what happens to subs, much like the pay-TV cos. Or maybe that’s what they’re already doing ..?
** In 2005 I analyzed music pricing and determined that price equilibrium for a then $15+ CD was somewhere around $5. Would it have “saved” the record biz? Probably not but the point is that in the face of technological change the record labels tend to hold on to their pricing models for too long. Which is odd given that tech change tends to disrupt business models and little else.