Music News

What’s the Right Amount to Charge for Unlimited Streaming?

Right now, the answer is “about ten dollars.” But is that too much? (Artists and rights holders: you might want to stop reading right now.)

If you do the math–and it’s simple, ugly math–that isn’t what most people spend on music today. The average person drops much, much less than $10/month on purchasing music. You see the problem. Forbes has this piece on the matter.

It’s no shocker that streaming is quickly becoming the go-to for how many people access music. CD sales drop every year, as do digital downloads of singles, and though vinyl shipments have been rising for some time, they aren’t filling the gap left behind by the millions of albums that go unsold. This is generally thought of as a good thing for the consumer (if not so much for artists), but if that’s the case, why aren’t people running out to sign up for streaming services, which offer almost all of recorded music? One answer is that there are plenty of free options…but that’s not all there is to it.

Most streaming services keep their price fairly low—Spotify, Apple Music, and Tidal have all set the bar at $9.99 per month—which, considering what comes with that subscription fee, isn’t actually too bad. That may be the case, but for many people, it’s still more than they want to pay. The IFPI (International Federation of the Phonographic Industry) reports that at the height of the music business in 1999, the average music-buying person in the world spent around $64 on recorded music per year. Re/code points out that the $64 figure is only taking into account those who actually bought music. When adding in the millions of adults who never contributed a dime to the industry, that figure goes down to a surprising $28 per person.

That $64 figure was at a time when people had to spend a premium to get the music they wanted. There was no iTunes, and even singles could cost several dollars. If a person was a fan of a certain artist, they were much more likely to rush out and purchase the album before the creation of digital downloads and online piracy. Now that we’ve gone to the end of the spectrum where songs were $0.99 and nobody needed to purchase an album, it’s tough to convince many to fork over $120 a year—twice what they were paying just a decade and a half ago.

See what I mean? So how to we reconcile these facts with what the industry needs to survive? How can people be convinced to spend more on music?  Keep reading.

Alan Cross

is an internationally known broadcaster, interviewer, writer, consultant, blogger and speaker. In his 40+ years in the music business, Alan has interviewed the biggest names in rock, from David Bowie and U2 to Pearl Jam and the Foo Fighters. He’s also known as a musicologist and documentarian through programs like The Ongoing History of New Music.

Alan Cross has 38019 posts and counting. See all posts by Alan Cross

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