Spotiwhy? : Are Subscription Music Services a Sustainable Business Model?
1–10 of 33 posts
Re: Spotiwhy? : Are Subscription Music Services a Sustainable Business Model?
#2Ok, but spotify is available in the following countries as well: Sweden, Norway, Finland, the UK, the US, France, Spain and the Netherlands.
Why not use those as well to calculate the possible yearly revenue?
Re: Spotiwhy? : Are Subscription Music Services a Sustainable Business Model?
#3So the author says they are, up to a point, and assuming they get significant penetration. But it's based on an average listening rate of 2.5 hours a day, which is apparently what an average american teenager listens to. I'd have thought the average american teenager probably has the highest music listening rate of any demographic. I know my own usage would be closer to an hour on the days I queue up music, but that would be only every other day at best.
If that is closer to the average listening habits, then the royalty per stream calculations end up over 5x more profitable and above the magical 1 penny/play mark.
Re: Spotiwhy? : Are Subscription Music Services a Sustainable Business Model?
#4Ok, but spotify is available in the following countries as well: Sweden, Norway, Finland, the UK, the US, France, Spain and the Netherlands. Why not use those as well to calculate the possible yearly revenue?
You can do the numbers... The article is about how to model this. Expandi g to the whole world does not change the argument much as you get a bigger pool of artists too. He was comparing off US revenues on eg CD sales. There are still huge national differences in music preferences.
Re: Spotiwhy? : Are Subscription Music Services a Sustainable Business Model?
#5So the author says they are, up to a point, and assuming they get significant penetration. But it's based on an average listening rate of 2.5 hours a day, which is apparently what an average american teenager listens to. I'd have thought the average american teenager probably has the highest music listening rate of any demographic. I know my own usage would be closer to an hour on the days I queue up music, but that…
I would also argue that a big part of listening happens on the move: listening to music on mp3 player or phone.
And that's a separate products that can probably be sold for separate money.
Re: Spotiwhy? : Are Subscription Music Services a Sustainable Business Model?
#6So the author says they are, up to a point, and assuming they get significant penetration. But it's based on an average listening rate of 2.5 hours a day, which is apparently what an average american teenager listens to. I'd have thought the average american teenager probably has the highest music listening rate of any demographic. I know my own usage would be closer to an hour on the days I queue up music, but that…
Yes I would expect a long tail of listeners, imagine I am at less than an hour mostly. To some extent this will just affect penetration though, as the light listeners will not pay $10. In principle you could sell them cheaper capped play subscription though.
Re: Spotiwhy? : Are Subscription Music Services a Sustainable Business Model?
#7Very nice breakdown and analysis of the business model.
I too agree that assuming 2.5 hours per day on average is a stretch. I generally listen to more than that, but i'm fortunate enough to have a job where I listen to music while working. Most people don't get to do that very much.
Re: Spotiwhy? : Are Subscription Music Services a Sustainable Business Model?
#8So the author says they are, up to a point, and assuming they get significant penetration. But it's based on an average listening rate of 2.5 hours a day, which is apparently what an average american teenager listens to. I'd have thought the average american teenager probably has the highest music listening rate of any demographic. I know my own usage would be closer to an hour on the days I queue up music, but that…
On the other hand, he counts 2.5 hours per household. Although Spotify does not allow for simultaneous plays using one account, more than one person in a household may use one account.
Also, the article assumes the premium subscription rate, but probably very many users have the 'Unlimited' subscription. So, although the average is probably lower than 2.5 hours, the average subscription price is also.
Re: Spotiwhy? : Are Subscription Music Services a Sustainable Business Model?
#9So the author says they are, up to a point, and assuming they get significant penetration. But it's based on an average listening rate of 2.5 hours a day, which is apparently what an average american teenager listens to. I'd have thought the average american teenager probably has the highest music listening rate of any demographic. I know my own usage would be closer to an hour on the days I queue up music, but that…
Not necessarily. I'm a programmer (not a teenager anymore), and I listen to music almost all the time while working, which is definitely more than 2.5h per day. Of course I might be an outlier, but as streaming gets more popular and easier to use, more people would listen to it in the background, like radio.
Re: Spotiwhy? : Are Subscription Music Services a Sustainable Business Model?
#10A related infographic from last year by David McCandless, "How much do music artists earn online?": http://www.informationisbeautiful.net/2010/how-much-do-music...