Streaming services need to reduce their subscription fees to convince more music fans to pay to sign up, a new report has claimed.
A study by Alvarez and Marsal (A and M) urges streaming services, such as Spotify and Deezer, to half their subscription fees to attract more paying users.
The research claims that if the standard price of UK registration was cut to £5 (from the standard of £10), then the adoption rate of paid services by free users would rise from 17 percent to 40 percent.
A and M calculates that this would lead to an increase of 2.4 million people paying to stream music, which in turn would generate potential additional annual revenues of up to £95 million.
A and M’s Faisal Galaria was quoted by Music Ally as saying: ‘Our research shows that reducing prices will have a significant effect on subscription rates and, subsequently, be more than off-set by an increase in aggregate revenues.
‘While reducing prices may seem like a dramatic step, with the right proposition and price points in place, there is an opportunity to build sustainable interactive music businesses and even create the Netflix of music.’
The findings were based on a survey of 3,329 consumers in the UK, US and Germany.
A study by Alvarez and Marsal (A and M) urges streaming services, such as Spotify and Deezer, to half their subscription fees to attract more paying users.
The research claims that if the standard price of UK registration was cut to £5 (from the standard of £10), then the adoption rate of paid services by free users would rise from 17 percent to 40 percent.
A and M calculates that this would lead to an increase of 2.4 million people paying to stream music, which in turn would generate potential additional annual revenues of up to £95 million.
A and M’s Faisal Galaria was quoted by Music Ally as saying: ‘Our research shows that reducing prices will have a significant effect on subscription rates and, subsequently, be more than off-set by an increase in aggregate revenues.
‘While reducing prices may seem like a dramatic step, with the right proposition and price points in place, there is an opportunity to build sustainable interactive music businesses and even create the Netflix of music.’
The findings were based on a survey of 3,329 consumers in the UK, US and Germany.
