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The latest statistics on the behavior of streaming subscribers are upending conventional understandings of how and why we consume music.
Last week, media and technology analysis firm MIDiA Research released an infographic on streaming users' listening habits. According to the graphic, 58% of streaming subscribers listen to an individual album or track only a few times, while 60% of subscribers engage in this behavior due to the desire to discover more new music. These numbers are significantly higher compared to the 30% and 27%, respectively, of overall music consumers with those attitudes, implying that paying subscribers tend to exhibit more casual listening behavior.
These findings put into question historical understandings of music fandom, and have particular urgency in today's music landscape where streaming revenues are surpassing physical sales for the first time. Indeed, streaming is one of the fastest-growing music formats today: the 2014 Nielsen Music U.S. Report declared record levels of on-demand audio streaming in 2014 at 78.6 billion streams, a 60% increase from 2013. Spotify itself has over 20 million paying subscribers as of June 2015, a 100% increase from the previous year.
[...] The prominence of streaming services is leading to the emergence of a new dichotomy of superfandom in music—the artist superfan versus the streaming superfan (a.k.a. the paying streaming subscriber). A standard framework for understanding the artist superfan is laid out in the film "Super Fans: The Future of the Music Industry." Co-produced by direct-to-fan music platform PledgeMusic and online education company Lynda.com, the video defines superfans as those who are willing to pay the most to connect on a deeper level with artists, and provides action items for artists to maximize their superfans' engagement. First, artists themselves need to work toward increasing their own exposure, "one fan at a time," instead of relying on labels to do the job. Second, artists need to foster bidirectional conversation with their listeners and foster a personal relationship that extends beyond music.
(Score: 3, Interesting) by choose another one on Saturday November 14 2015, @12:00AM
The artists and record labels all forget one key fact when comparing cd and streaming sales - they get paid only once for a cd (or other physical form), whereas they will get paid again and again and again for future plays in the streaming case, where they don't when an older fan like me plays a few of his cds.
Even at "peak cd" the average person spent $28 per year on music, "fans" spending average $50-60 (see eg http://recode.net/2014/03/18/the-price-of-music/) [recode.net] yet streaming services are typically $120 per year or more, so in the long run the music industry as a whole should be better off. So why are they complaining? - because the average person doesn't buy streaming service because its too damned expensive, the people that do are the current big buyers for whom it makes economic sense. But music buying changes with stage of life (in my opinion and experience), and in 10-20yrs those same big customers will reach the stage where I am now where they (would) own 100s of albums and spend time listening to those and buying little new music. However, as streaming customers they will have to keep paying for the rest of their life - or lose all their music.
The payoff is in the long tail, and years down the line, but it will payoff, and big IMO, but the transition will be painful. It will also be better for the musician, Spotify pays out effectively 70% of gross (not net), I doubt you will find _any_ record deal from a label that comes anywhere close to that, and it doesn't even make a profit so at the moment it is effectively a vehicle for taking money from investors and paying it to musicians. yet somehow that still isn't enough.
The problem is the same as for a software company moving from licence / upgrade to a rental / service model. Long term the numbers have the bean counters in ecstasy, not only more revenue but you can even remove most of the cost (ie. sack the devs) of producing new versions to get upgrade sales! However, in the short term you lose revenue from new customers buying a subscription instead of a licence and from frequent upgraders buying subscriptions instead of new versions, while you get nothing from your customers who are infrequent upgraders, because they'll stick with the versions they already have because the subscription looks too expensive. Essentially you cannibalise your best customers onto a lower revenue option way before you can get all your customers on to it. Music has a much longer lifespan than software - 5-10yrs and most software users will want or need the new rental-only stuff, with music it'll be 20yrs plus.