That’s the claim of YouGov research – based on responses from just 3,600 consumers, so hold that in the back of your mind as we go through the key numbers and consider if broader findings can be arrived at. YouGov found that broadly consumers are using digital services (47% for iTunes, 23% for YouTube, 13% for Spotify and 5% for Amazon Cloud Player) but that only 4% of those have not used on-demand services say they will this year while 84% say they are “unlikely” to.
YouGov’s associate director for media consulting, Shaun Austin, said, “The focus for digital content providers needs to be on working out ways to get the most out of the existing current user base rather than expanding into new audiences.” The report added that piracy among young consumers remains both an educational and a commercial challenge.
The IFPI recently announced that there were 20m streaming service subscribers globally (Spotify accounts for about one-third of them), so there is still some distance to go here before on-demand streaming (outside of YouTube) can even remotely be considered a mainstream activity. How services, and the music business, get there is the big question.
A $10/£10/€10 monthly offering appeals to a certain demographic (heavy music consumers), but it is far from a mainstream proposition for consumers who might, a few years ago, only have bought a handful of albums annually. Some services are trying bundled carrier deals (Deezer in Europe, Muve in the US) to get in front of a mainstream audience and Spotify has dramatically upped its marketing this year with TV ads in the US. So significant steps are being taken here.
In our Music Ally Report last month we looked at the global expansion plans of 13 of the biggest streaming services and the types of markets they see potential in. Then in our report last week we considered those services trying to find a stepping stone solution for consumers for whom $10/£10/€10 a monthly is prohibitively expensive.
The issue, really, is not that on-demand streaming is doomed to be a niche activity but rather that more experimental price points (and bundling) built around consumer segmentation are needed. And this is where YouGov’s advice to “get the most out of the existing current user base rather than expanding into new audiences” seems a myopic short-term solution to what is a long-term challenge.