News

Report: UK cost-of-living crisis affects music subscriptions


Tags:

Economies around the world are wobbling in various ways at the moment. That continues to spark discussion of whether subscription services of all kinds – video, music, games and more – could see increased churn of their paying customers.

What’s been lacking is hard data on whether that’s actually happening, although Netflix’s last financial results – revealing that its subscribers actually declined in the final quarter of 2021 – were a warning shot.

Now research firm Kantar is following up on a prediction it made in February this year that almost one million people in the UK were “planning to cancel at least one of their premium subscription music-on-demand services”.

So did they? According to Kantar’s latest figures, they did. “Over 1 million music subscriptions have been cancelled in the last quarter in GB, with wanting to save money being cited by 37% of consumers as the reason they cancelled,” reported the company.

It added that younger consumers are churning the most: “the percentage of under 35 having access to a music subscription having dropped from 57.0% to 53.5% year on year… 600k fewer under 35s have access to a music subscription compared to the previous year.”

This isn’t just a UK thing. Kantar also claims that in the US, penetration of music subscriptions for under-35s has fallen from 69% to 63% in the last year: almost five million people dropping off.

It’s another warning of potentially bumpy times ahead for the music streaming companies, although we’ll have quarterly Spotify results to offer harder data: in Q1 it added two million net new subscribers, but suggested that its pullout from Russia, rather than cost-of-living churn, was the reason.

One more interesting point from the Kantar figures: its suggestion that in the US, Germany and UK, Amazon Music Unlimited took the biggest share of new music subscriptions in the first quarter of this year, ahead of Spotify.

It’s been traditional to describe Amazon as a ‘dark horse’ in the music subscriptions market, but perhaps we should now be talking about it as a viable front-runner in this long-term race, even if Spotify is still the top dog (or horse, if we’re keeping this metaphor unmixed) overall.


Written by: Stuart Dredge