Most UK Consumers Believe Music Streaming is Too Expensive

Image by Quinn Dowbrowski (CC by 2.0)

Image by Quinn Dowbrowski (CC by 2.0)

Music streaming at 9.99 per month does not equal “cheap.”

A new YouGov-Zuora study shows that most UK consumers believe that music streaming is not cheap.

The YouGov study polled 2,000 UK consumers. Only 10% of the UK adult population are actually paying for a music streaming subscription. They pay an average of £7.07, or $8.67, a month.

For those who have signed up with Spotify or Apple Music, 52% believe that they won’t ever purchase a CD again. Why? They now have access to music streaming whenever they want. 37%, however, said that they rarely listen to the radio due to the same line of reasoning.

What about the other 90% who didn’t pay for a music streaming subscription? The study suggests that 47% of respondents believe that Spotify and Apple Music should experiment with their pricing. The current pricing is just too expensive for them. In a blow for music streaming in the UK, 27% of the population actively subscribe to video streaming services.

Tien Tzuo, founder and CEO of Zuora, released a statement:

“Subscription-based music consumption is clearly gaining maturity, with well-established services such as Spotify and Apple Music, and new entrants like Amazon, offering endless access to content. However, with only 10% penetration in the UK music market, there is a lot more room to grow”

The study shows that there may be an opportunity for lower-priced music streaming service competitors. Recently, Amazon released their three-tiered pricing plan: $9.99 a month for non-Prime subscribers, $7.99 for Prime subscribers, and $3.99 for Echo owners. Pandora is also offering their Plus service at a lower cost.

Tzuo added,

Modern consumers are looking for outcomes, more personalised experiences to match the value they get from their ongoing streaming music investment. The winner in this race will succeed by delivering the most compelling experiences matched with tailored pricing models that meet consumer expectations

20 Responses

  1. Predictably Irrational

    I think even at 0.99$ a year, consumers will still find it too expensive, because they’ve been educated in thinking like that. These polls are useless, because people are not logical. As mentionned , those who find that 9.99$ for all the music in the world as too expensive, are happy to pay Netflix the same amount for a couple of movies and a few shows.
    Lowering the price of streaming even lower than it is is not the solution because there’s no end to it, people will soon start demanding to be PAID 9.99$ to listen to music.

    Reply
  2. Versus

    “Modern consumers are looking for outcomes, more personalised experiences to match the value they get from their ongoing streaming music investment. The winner in this race will succeed by delivering the most compelling experiences matched with tailored pricing models that meet consumer expectations”

    I have absolutely no idea what this means.

    Reply
  3. Versus

    Tiers are a good move.

    Apple Music, Spotify, etc. should indeed offer tiers of pricing, with more expensive tiers offering more total music plays per billing cycle.

    Should there still be an unlimited plays tier at all? If so, at what price point?

    Reply
  4. Nicky Knight's thoughts..

    This matches exactly my argument about what companies think is an attractive price point and what consumers think is reasonable enough to warrant paying for it.

    For most people, $10 a month is too much – most people don’t spend anything like $120 on music a year, even when CD’s and vinyl were riding high..

    The record companies and streaming services need to take a reality check..

    Most people are inundated with bills, rent, transport and everything else expenses that $120 a year on music is hard to justify… even if you’re well off you don’t want to spend that on an audio only entertainment service.

    TV streaming (i.e. Netflix) is different because it’s perceived that you’re getting a lot better value for money.. movies and limited availability TV that’s not available for free on YouTube or over-the-air has a lot of value..

    To go to the movies it’s over AU$20 just to see one movie..

    So NetFlix at around $10 a month is worth it for a lot of people..

    So back to where I started… $4 a month, $48 a year for unlimited music is the answer.. that’s $1 a week (approx) and that’s where you can get critical mass take-up.

    $48 a year off millions of people is A LOT OF CASH !!!

    The corporate execs and their corporate focus groups aren’t in touch with modern reality ..

    The public will vote with their cash.. besides, the record companies and artists are giving it all away for free on YouTube so why pay at all..

    Get rid of free music on YouTube and Spotify Web Player

    iTunes was the biggest music money machine a few years ago because there wasn’t all this free music floating about on YouTube and Spotify Web Player..

    Look at your record companies income from 2006 – 2010 and you’ll see this reflected in your iTunes revenue..

    Silly silly people.. on one hand you give it all away for nothing.. and on the other hand you’re begging for $10 a month and telling us that it’s a bargain..

    Reply
    • Daniel Adrian Sanchez
      Daniel Adrian Sanchez

      To be honest, this is the same reason why I personally don’t have a premium music streaming account. The price point just doesn’t really appeal to me, and in my opinion, there just aren’t any “OMG GET IT NOW!!!” features. I do have a Netflix account that my wife and I, along with our daughters enjoy. Why do we have Netflix? Well, as you said, we perceive it as a better value than going out to the cinema or purchasing cable or satellite to watch our favorites shows and movies.

      Reply
    • RickRock501

      You’re spot on my friend! If you want more people to pay for streaming, lower the price! I’m sorry, you can’t have your cake and it eat too…keep the price high and expect everybody to sign up. As consumers, we’re not stupid! Perfect example: A grocery store across from my job in the city…high rent district. They routinely price items too high…looking for dummies who’ll pay outrageous prices. The result, nobody buys them until they place them “On Sale!”. Then you see the stock start to move. You want the “world” to buy in, then make the price attractive…$10 a month is not!

      Reply
    • Nicky Knight's thoughts

      Food for thought.. thank you for posting these links… it really re-affirms my belief that the price of streaming is too much and very unappealing to music consumers.

      As these articles suggest… a price point of $3 – $4 a month $36-$48 per year is what the public would most likely be prepared to pay..

      The stupid thing is… the record companies and streaming services are doing themselves a dis-service by pricing it too high because most people aren’t paying anything at all and it will stay that way if things remain as they currently stand.

      So what’s better.. 90-99% of music listeners paying nothing at all and getting it all for free off YouTube and Spotify Web Player or having potentially tens or hundreds of millions paying $36-$48 per year..

      Regardless, the free give-away music on YouTube and Spotify Web Play will still
      cannibalize sales..

      Some people say YouTube is just a promotional vehicle but I disagree.. it’s a combination of promotion and free distribution of music entertainment.. people use it all the time to listen to their favorite songs.. so why on earth would they pay for it when so much is being freely made available .. and everyone skips the pre-roll ads..

      iTunes is still viable and big hits still sell huge numbers.. but the long tail has mostly gone… you need to have a blockbuster if you want to reap the rewards..

      Record companies, artists and streamers all need to take a reality check and
      1. price streaming at a price people are prepared to pay
      2. stop giving it away for free on YouTube and Spotify web player
      3. Encourage iTunes downloads because that is where the real revenue is to be found

      Anyway, you know the drill …

      Reply
  5. Rico

    When 2 generations have grown up on free music, of course having to pay a fee to not to have to listen to commercials is not an attractive model.

    Perhaps the music industry can effectively convey to the consumer the benefits of the streaming options or better yet, the streaming companies could effectively do this before they reach a saturation point of paying consumers… nah, that would take real marketing and PR.

    Reply
  6. Chris Daniels CU Denver

    I suggest Tim Wu’s new book, “The Attention Merchants” in which he argues that free — is — in fact – not free. We are paying a price beyond the savaging of our recorded music industry for ad-based and ad-supported content. That price is the constant invasion of every platform (not just music) with commercial advertising – Youtube to Google. But it goes beyond that. It also involves ‘tracking.” Every time you get detracted and click on one of those ads, every google search (and on and on) is being stored as analytics about you … personally. He argues that we willingly pay for services (gas, electricity, cell phone etc.) and that by setting the value of recorded music at zero or next to nothing we have created something far worse than a $120 annual fee for unlimited music. It’s a good book and very relevant to this discussion.

    Reply
    • Rico

      Thanks, I will check it out and from the bit you mentioned, it is true about us all paying higher price for the manipulation of our data ( well anyone who pays for it, their data as well)

      Reply
  7. Versus

    Surprise:
    Consumers, since all they do is consume, think everything is too expensive. They want everything for free. This way, they don’t have to work, which gives them more time to just consume.

    Reply
  8. Kenn

    Many years ago a woman came in and liked my music and asked how much a CD of my music would cost.. I said. $14.. she gasped and said with Anger… that a Blank CD costs 39 cents… I should have thought to offer to sell her a blank CD for 50 cents. but I didn’t read about that option until years later.

    Reply
  9. Mira

    I can’t believe that millions of people are paying a streaming service to tell them what they should be listening to. I tried it for one week and opted out. I do not want recommendations from Siri/Echo “showing me their recommendations”. I listen to world music and some of the best music is not in Itunes. I opted out and went back to my records/cds -my choice, my price, my time. The best moment is that I am listening to music “My Way” (Frank Sinatra sang it best) and protecting the rights of the composers/publishers of this beautiful music. Street musicians are now handing out their cd’s for a small offering-that’s the power not paying a streaming service that doesn’t compensate the composers for their music fairly.

    Reply
  10. Eddie

    The streaming services are not concerned with the musicians and songwriters at all. They give us a fraction of a cent when our songs are played. There should be a limit on streaming a song, say three times, and then if you like it, you could buy it! The musician would get something for what they worked passionately on!

    Reply
  11. Stuart

    It seems to me that music professionals in general have a difficult time understanding why it is a challange to sell the general population on the concept, of paying for music even when they don’t have to.
    We never have, why would we do so now.
    Music is consumed by a variety of groups.
    The largest of which is the the Gen Z. or the 12-19 age group. This market does not consume music because they love music they do so to form their identity, and they have no relationship with the value exchange. In 1966 I was 12. Music was my world. My generation defined the consumption models we are still living with today. Music was not free in those days, it was paid for by radio advertising and record sales. I assure you I never bought records in the volume that is reflected in a 10$ a month subscription model. Radio worked well in those days and the ads were never an issue. Radio was exciting and innovative programming was new and inspiring. Radio no longer fulfills that dynamic it has taken a different role. What ever the new engagement and consumption models are if they are to be successful we will have to be honest with our evaluations of the dynamics of the consumers from all perspectives. Including demographics, psychographics and the emotion. I call this the PsycoDemoEmo. I do not know hat the answer is. Kids don’t buy music, old people don’t care. Our struggles as artist while principally empathic, people, are not going to champion a ” But We Are Worth It” platform. In conclusion; I think that if we are to find answers we need to know the question. The question cannot be ” How can we get people to pay for music.” They never have………..

    Reply

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