Music’s new wave of unlimited-access services is now supported by most labels, who dearly hope that new subscription payments will make up for slowing download sales. But when will that happen?
Warner Music Group’s new CEO recently even went as far as saying: “You will eventually see those lines cross.”
But that is optimistic in both the near- and mid-terms. Globally, digital music subscriptions rose 64 percent to 13.4 million through 2011 (source: IFPI) – but that is just three percent of UK industry revenue. Downloads, dominated by iTunes Store, shipped 1.1 billion singles in the U.S. alone in 2010 (source: Nielsen SoundScan).
“For streaming to go mainstream, we need to hit somewhere like 10 times that,” MusicWeek editor Tim Ingham told a MusicTank industry seminar on the topic last week.
And industry analyst Mark Mulligan said: “We need to get to the next level of scale before ARPU (average revenue per user) actually matters to artists as well as labels.”
Spotify, which currently leads the sub-sector with three million subscribers amongst 10 million active users, has stated its aim to reach 100 million users all by itself. On its current free/premium conversion ratio (20 percent of active users), Spotify could bring labels some 20 million paying subscribers by the time… Read the rull story at Paidcontent.co.uk