As Subscription Streaming Dominates Revenues, Free Music Is Coming Under Pressure

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Recent comments by Sony Music CEO Rob Stringer underscore the importance of subscriptions as free, ad-supported services lag in value creation.

. “This would help develop this segment of the streaming business to be more than just a marketing funnel for paid subscription and still be a tremendous value for users,” he said during parent company Sony’s business segment presentations on Thursday. on subscription services for their revenues. With consumers proving willing to pay for rising prices, free streaming options aren’t producing the royalties to match their popularity.

Spotify and other platforms could soon offer a high-priced tier for superfans that would make subscriptions an even more valuable component of the music industry. Spotify first mentioned the possibility of “superfan clubs” in anlisted “superfan things” — as well as audiobook sales — among the products Spotify could offer if Apple did not take a 30% cut of in-app purchases.

Goldman Sachs actually beat Stringer to the idea of charging for ad-supported music streaming. In the latest Music in the Air report released in early May, its analysts recommended an “advertising light tier for a small charge” as one way of evolving the ad-supported marketplace and floated the idea of using “content or feature restrictions” to make free, ad-supported streaming tiers a less attractive option, thereby pushing free users to a paid tier.

Source: Entertainment Trends (entertainmenttrends.net)

 

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