25 Dec How is Music Streaming Working Out?
The future of music streaming services looks incredibly promising. However, the journey to that future and which services will come out on top are still up in the air.
Just like video streaming, the main strategy for music streaming has been to gather as many subscribers as possible, whether they pay or not, and to stock up on content, with the focus on profitability coming later. This approach has worked so far, to an extent. But how can these services turn their subscribers into a profitable venture?
There are significant costs involved in gaining new subscribers, and even bigger costs in acquiring content and maintaining the systems to support them. Up until now, music streaming services have been hesitant to raise prices, but that’s starting to change.
Goldman Sachs, in their June report, pointed out that music streaming is one of the most under-monetized forms of entertainment in the music industry. The report highlighted that consumers are spending 40% less on music today, as a percentage of their total entertainment budget, compared to the peak spending in 1998.
This led Goldman Sachs to conclude: “This supports our belief that any price increases can be passed onto consumers with minimal churn.”
Recently, music streaming services have started to increase prices, citing reasons like inflation, licensing fees, and the cost of delivering high-quality content. For instance, in October, Apple Music raised the price of its individual subscription in the U.S. from $9.99 to $10.99 per month. Spotify is also considering a similar move.
Will these subscription price hikes cover the costs of operations and acquiring new music catalogs, podcasts, and audiobooks? And with ongoing price increases and inflation, will subscribers leave to find a better deal?
One solution is for music streaming services to gain more control over the data on how customers use their services. This would allow them to create more sophisticated business models and pricing plans, beyond the current ad-based services, flat-rate subscriptions, and family plans.
With a flat-rate subscription, when usage goes up, operating costs also rise, but revenue doesn’t. By having full control over customer usage data, services can offer better deals to customers who use the service less, and charge more to those who use it a lot.
To make your music successful on streaming platforms, consider the following steps:
1. Create Quality Music: Focus on producing high-quality tracks that resonate with your target audience. Good production and engaging content are crucial.
2. Understand Your Audience: Identify your target audience and tailor your music and promotional efforts to their preferences.
3. Optimize Metadata: Ensure your track titles, artist name, album details, and other metadata are accurate and optimized for searchability on streaming platforms.
4. Use Playlists: Submit your music to popular playlists, both official and user-generated, to increase exposure and reach a wider audience.
5. Engage on Social Media: Use social media platforms to connect with fans, share updates, and promote your music. Engaging content can drive more listeners to your streams.
6. Collaborate with Other Artists: Partner with other musicians to reach new audiences and cross-promote your music.
7. Leverage Data and Analytics: Use the analytics tools provided by streaming services to understand listener demographics and behaviors, then adjust your strategy accordingly.
8. Consistent Releases: Maintain a consistent release schedule to keep your audience engaged and eager for new music.
9. Promotional Campaigns: Invest in marketing campaigns, including ads on social media and streaming platforms, to boost visibility.
10. Engage with Fans: Foster a community around your music by interacting with listeners and creating content that encourages fan participation.
Implementing these strategies can help you increase your presence on streaming platforms and grow your music career.
