![]() ![]() Apple’s 400 million credit card linked iTunes accounts dwarves Spotify and Deezer so it is understandable that the they each want to make hay while they can. If they get their streaming play wrong (and there will be an Apple streaming play eventually) the results could be catastrophic for the music industry. ![]() Apple have played their hand cautiously to date, conscious of their hugely influential role in the digital market and indeed in the music industry more broadly. Things will get really interesting when they reach $9.99’s adoption glass ceiling.Īnd of course there is an elephant in the room: Apple. Currently both companies look remarkably similar in terms of user metrics (see figure) but while they pursue somewhat distinct geographic priorities they will continue to find those few per cent of aficionados in each market. Until then Spotify’s and Deezer’s gold rush millions will achieve little more than saturate the high end aficionados that the $9.99 price point appeals to. If streaming is to go mainstream the price point (for streaming with full mobile device support) has got to get towards $5, through a combination of bundling and rate discounting. Price Is the Biggest Barrier to Streaming Going Mainstream Cricket Wireless, Telia Sonera, France Telecom and of course TDC have all made solid starts but more, much more, is needed. The market still desperately needs more mobile carriers, ISPs and device companies to start hiding in their core products some or all of the cost of subscriptions to consumers. Pandora’s Tim Westergren has made the case for lower statutory streaming rates to drive scale, it is probably time to start a parallel dialogue for on-demand streaming.īut lower wholesale rates alone won’t fix the problem. And that is a problem, because it is clear that for the economics of streaming to add up (for artists, services and labels alike) scale is key. To be clear, this is not to say streaming music is not a mainstream proposition, but that the $9.99 streaming subscription is not. We have had the product in market for over a decade, if it was going to hit hockey stick growth we’d have seen it by now. The problem is that the $9.99 streaming monthly subscription is not a mass market value proposition and it is not about to suddenly become one. ![]() However, and somewhat paradoxically, the US market should also have much much more space, plenty enough for Deezer, Spotify and the rest to flourish in. Also there is clearly a much bigger scale opportunity in the remainder of the globe. There is no doubt that the US paid streaming market is overly catered for at present, and that Deezer would struggle to get any foothold. The US is Saturated and Yet Potential Remains Untapped Like a canny general who decides to march around a heavily fortified stronghold and thus effectively leave it stranded behind enemy lines, so Deezer expects the streaming war to waged on different shores. Leaving aside for a moment the intriguing fact that the two streaming global super powers are European, Deezer has managed to slip beneath the radar of the often US-skewed digital music world view by pointedly deciding to ignore the US market (for now). Spotify’s investment is well documented, but this week Deezer confirmed their seat on the fast train with a $100m investment from Access Industries, which also just happen to own Warner Music. At one end We7 and MOG sell for peanuts in the middle Rhapsody, Sony, Rdio, Wimp, Rara and others continue to steadily build a market and at the other end Deezer and Spotify are sucking in investment with the force of a black hole. The music streaming world is one full of contrasts and inconsistencies. ![]()
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