/ spotify

The right price for music streaming is ..?

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". But is it?

Like almost everyone, I would be happy to pay less than $10/month for my Spotify subscription. But there's a bigger elephant in the room, which is how streaming services engage the household.

Spotify subscrivers living in a family environment, know that $10/month only buys a single-user experience. While Netflix and Amazon Instant deliver a multi-user, household experience, Spotify has family members juggling use of one account.

If Spotify is to scale, the record labels must allow the streaming services to deliver a "family plan", somewhere around $10/month. Speaking from experience, 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 don't see the labels buying in any time soon. They have history of acting too late.*

* 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.

Further reading

David Pakman's The Price of Music, where he argues "based on the patterns of consumer spending on music, streaming services are priced too high."

RobC

RobC

Marketing. Tech. Tunes. Words. Don't believe everything you think.

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