Music streaming services and online music consumption - How access to everything is more important than ownership of something

Music streaming services and online music consumption How access to everything is more important than ownership of something Report on music consumption amongst Norwegian students age 20-29 June/July 2010

How does music streaming services affect online music consumption habits and how can we expect such services to affect consumer behavior in Denmark?

First things first • A music streaming service is a subscription service that primarily provides access to music streams.

Music services in use in Denmark Students in Denmark October 2009 Wimp not launched in DK at the time of this service

• Denmark is behind when it comes to streaming services. • TDC Play is the only legal service consumers seem to use, but it isn’t really popular and it isn’t really streaming...

• 32% in Denmark use a subscription service. • 43% using a subscription service download less illegal. • Problem is however that 80% of these use a service that is not legal or legally available.

But how are things in Norway?

After all, streaming services like Spotify and Wimp have been available in Norway for more than a year.

...and Denmark and Norway are two markets quite similar to each other (people in both countries enjoy hot dogs)

Well, things are quite different...

My survey: In Norway 87% use a streaming service And as many as 52% do so on a daily basis Spotify is the most popular service

Let’s compare Norway with Denmark...

87% 32% Students 20-29 years of age

52% 9% Students 20-29 years of age

Norwegian music consumers: Access is the new ownership

Access is clean while ownership is messy

So what does it mean? How does music streaming services affect online music consumption habits and how can we expect such services to affect consumer behavior in Denmark?

Well, remember a fancy little thing called piracy? • 60,4% using a subscription service in Norway download less illegal (43% in Denmark). • 2% use an illegal servie (80% in Denmark). Keep in mind that in total 87% use a streaming service in Norway, and 32% in Denmark.

So it is without doubt important to look at legally available streaming services as legal venues that drives traffic from illegal venues, but that is kind of irrellevant as long as we don’t earn any money! Industry Perspective

That’s why some record labels and artists in Norway have withdrawn their entire repertoir from Spotify ...but as it looks like

My research shows that 21,6% of the ones using a subscription service, pay to use this service. Let’s however simplify the big picture: Other research in Norway (TNS Gallup InterBuss) published in August 2010 reveales that 1,3 million Norwegians use Spotify. 19% pay to use it. 19% of 1,3 million = 247 000 paying subscribers 247 000 x 99 kr = 24 453 000 kr 247 000 x 49 kr = 12 103 000 kr Also let’s not forget that Spotify payments to songwriters in Sweden rose 800% in the past year

Streaming services do also have the potential to increase value of music in general as the overall music consumption goes up.

After all streaming services covers a social need. The DJ at private parties is Spotify. • Sharing of playlists. • Hear anything anywhere.

So maybe it is a good idea to not jump to any conclusions? .....yet

After all, it is a bit more complicated to “control” your music on ”illegal venues” and UGC sites. * Grooveshark is (Sept. 2009-October 2010) considered illegal by certain actors in the music industry.

Another consideration: Digital positivism? If the music is not on preferred streaming service, is it worth listening to?

Changes in music consumption and consumer behavior • Music streaming services leads to a decrease in illegal downloads. But they need to be considered legal for this to make sense (!) • Overall music consumption will go up and generate more value for the music industry as a whole. • The CD is valued less in a world of access. • The future of music consumption is about providing access to content instead of selling units. • Streaming services need to have everything available in order to be attractive. Conclusion on: How does music streaming services affect online music consumption habits and how can we expect such services to affect consumer behavior in Denmark?

Some thoughts on challenges...

Data traffic Unlimited data plans necessary when wanting to be spontaneous: • When do you listen to music on mobile devices? • Where do you listen to music on mobile devices? • If you have an unlimited data plan, what if you are on vacation in another country?

Everything available

Network effects

Where’s the long tail in streaming services? The long streamingtale: • People want access to the entire tail • But do mainly listen to the head • Or?

...and profitability is a challenge in every business model for the entire value chain. (even though I argue there might be money in streaming services, it is important to understand that it is extremely hard to conclude on anything regarding future profits) profits)

Discussion!

http://www.marklund.no	394
http://webcache.googleusercontent.com	1
http://yandex.ru	1
http://translate.googleusercontent.com	1

Music streaming services and online music consumption - How access to everything is more important than ownership of something

by Arnbjørn Joar Styrkor Marklund on Sep 27, 2010

Accessibility

Categories

Tags

Upload Details

Usage Rights

4 Embeds 397

Statistics

Music streaming services and online music consumption - How access to everything is more important than ownership of something — Presentation Transcript