streaming services

After yesterday’s report from Mark Mulligan examining active versus non-active users on streaming music services, now economist David Touve has weighed into the debate with some handy analysis. His key point: when talking about “churn” for streaming music services, it’s important to distinguish between “your loss is my gain” churn when people move from one service to another, and “your loss is our loss” churn when they leave the market altogether. “When we only consider the user base characteristics for clearly freemium services (e.g. Spotify and Deezer), we likely over-estimate the zombie population. The over-estimation is the result of counting ‘your loss is my gain’ subscribers as ‘your loss is our loss’ subscribers,” he explains. For example, in the US, where there are an estimated 3.4m paying subscribers for on-demand music services, Touve thinks that 15-20% of the 2012 subscribers (650k +/- 100k people) may have been ‘your loss is my gain’ churn between services, bringing down the proportion of overall “zombies” – inactive users. His breakdown of services’ subscribers in December 2012 is also useful: 1.1m for Muve Music, 1m for Spotify, 1m for Rhapsody, and 300k across Mog, Rdio, Slacker and other services.

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