Three separate stories today highlight the activity around streaming music in the US, in what’s looking like a crucial year for the recorded music industry there.
First: Spotify announced its partnership with telco Sprint yesterday, with a music-focused HTC smartphone. More importantly, there’s a six-month free trial of Spotify for people on Sprint’s “Framily” (friends and family) tariffs, with varying discounts then kicking in on subscriptions.
Other Sprint customers are getting three-month trials of the service. “It’s the biggest deal we’ve ever done,” said Spotify CEO Daniel Ek at the launch, with a marketing push to Sprint’s 54m customers on the way.
That deal will go head-to-head with Beats Music’s partnership with another US telco, AT&T. Beats Music CEO Ian Rogers has now responded to suggestions its launch was underwhelming with a blog post titled 100 Days And Runnin’.
Among the stats: conversion rates so far are 40% more than Beats’ projections – no, he didn’t put a number to either – with 33% of those subscriptions coming through AT&T. Adding in-app purchases to Beats Music’s iOS app has boosted daily paid conversions by a factor of five.
The service has generated 690 years of listening hours so far, with more than half of that listening coming from curated playlists and the ‘The Sentence’ recommendations feature. Oh, and one in four tracks played comes from an independent label.
The third story broke outside the US – in France – but with America a key factor. Deezer CEO Axel Dauchez has announced plans to step down in September to, in his company’s words, “pursue a new professional opportunity”.
No news on a replacement yet, but Deezer’s US CEO Tyler Goldman is joining the company’s management team, while Deezer’s announcement set Dauchez’s departure in the context of “the internationalisation of the company” – specifically mentioning its ambitions to launch in the US this year.
Deezer’s choice of CEO now will provide a big hint on its likely strategy in the US, especially with AT&T and Sprint now seemingly out of play for streaming partnerships.
Back to that notion of 2014 being a crucial year for the US music industry. Sales of downloads tailed off faster than expected last year, reinforcing the desire of rightsholders to ensure a healthily-growing and above all competitive ecosystem of subscription streaming services this year.
Streaming revenues rose 39% to $1.4bn in the US in 2013 according to the RIAA, as the number of paying subscribers jumped from 3.4m in 2012 to 6.1m at the end of last year. But rightsholders are looking for further strong growth in 2014 – streaming was 21% of industry revenues last year in the US – with telco deals, big-budget marketing and intensifying competition key to those prospects.
Spotify and Beats are certainly up for the fight; the likes of Rdio, Google Play and soon Deezer retain an interest; and Apple, Amazon and YouTube are lurking in the background. Exciting times Stateside.