Why Not Price Music Streaming to Sell?
re/code is running an editorial by former eMusic CEO David Pakman that lays out the case, clearly and simply, for lower music streaming subscription prices. And, the way he explains it, the music labels must be stupid for not doing it.
Here is Pakman’s spin. The average music consumer (ex-streaming) spends $48 per, which breaks down to $4 a month.
Currently, music streaming services are priced at $120 per annum. That’s $10 a month or two-and-a-half times what the average music consumer spends.
While it is possible, in a Russell’s teapot sense, that consumers will increase their average music by 2.5X, there is a more potent way for the music labels to increase their music streaming market penetration and revenue.
iTunes Radio: Already Optimal?
People living in Apple’s walled garden can already get a music streaming service priced well below Pakman’s $4 per month ideal price. Yes, iTunes Radio goes for just $25 a year and includes a range of services that Spotify, Rdio et al just can’t match.
That is? Reduce music streaming service prices to $3 to $4 a month (i.e. $48 annually). Seriously, guys, slash the price to what folks are willing to pay and you will succeed mightily.
Music Streaming Truth
Folks will, of course, will say that’s an overly simplistic answer to a highly complex issue. To whit, I add that the complexity is the fundamental problem — complexity is the enemy of truth which is defined here as max revenue via max penetration.
Kill the complexity and music streaming will flourish. Alternately, kill the labels, a la Amanda Palmer, and the world will right itself without the pointless drama…
What’s your take?