For years, the major labels have been clamoring for streaming services to raise their subscription prices. The publicly stated position of leadership at Warner Music Group and Universal Music Group is that music is undervalued, in part due to artificially low subscription rates. Warner Music CEOwas recently quoted as saying “We are the lowest form of entertainment; we have the highest …engagement, highest form of affinity and lowest per hour price. That doesn’t seem right.
These statistics are important for two reasons. First, they demonstrate that there is more room to grow music subscriptions in the US. They also reveal an underlying demographic divide. The half without access to on-demand services are older , less invested in music and likely to be more price sensitive than earlier adopters.
For years the main barrier to converting from a trial to a full subscription has been not using the service often enough. According to MusicWatch surveys, subscribers to paid on-demand services spend 26% more time streaming music than people who are on a trial. They also consider music more important..They are nearly twice as likely to spend money on things like concert tickets, vinyl records CDs and merchandise.