With the end of the three-month Apple Music trial coming up next week (for those who signed up on the first day), music industry and Apple executives are wondering how many people will continue paying for this service. According to the New York Post, 15 million people have signed up for this free trial, but half of them have turned off auto-renewal, signaling that they are not willing to pay for it.
While that still leaves 7.5 million people, I would not be surprised if many of these people signed up to try out Apple Music for a short time, and simply forgot to turn off auto-renewal. These people will see a $10 payment in October, and many of them will seek refunds.
Nevertheless, this still leaves several million people were willing to pay for Apple Music.
A Nielsen study highlighted by Digital Music News suggests, however, that only 9% of people in the United States are likely to pay for streaming music in the next six months. 78% of people polled are “somewhat/very unlikely” to pay for streaming music, with 13% of people still on the fence.
As Digital Music News points out:
That raises very serious questions on whether paid streaming subscription rates have already plateaued.
The article also points out that the most popular streaming music service remains YouTube, which is totally free, and rife with pirated music.
I think people in the music industry miss something very important. Most people simply don’t care very much about music. They may want to listen to a few of the latest hits, and they will do so on the radio, or with an ad-supported streaming service such as Spotify, or on YouTube. For the most part, these people use music as wallpaper. They are not music fans. The percentage of people who care enough about music to want to pay even $10 a month is clearly very small.
The Nielsen survey pointed out the three most common reasons why people would not pay for a streaming music service. It is too expensive, they can get music for free, and they won’t use the service enough to get value for their money. In an era where people will happily drop $20 on a Blu-ray of a new movie, or five dollars or more for a cup of insipid coffee, it seems paradoxical that $10 a month is too much to pay for music. Nevertheless, I think the reasoning is very different for subscription service than it is for one-off purchases. Since these occasional listeners can get music for, it makes no point to pay anything at all for it.
Another metric that is very important is how many people will will pay for Apple Music are doing so while deserting another streaming service, such as Spotify. The music industry is hoping that the overall number of subscribers to streaming music services will increase, but we simply don’t know if this will be the case. (Naturally, there are a number of serious music fans that won’t pay for streaming because they want to own music, but I’d guess that’s a fairly small percentage of people.)
But there may be other variables preventing people from paying for streaming music. For example, if you listen to music a lot on a mobile device, and your cell phone plan does not allow you to use a lot of data, then you will certainly not pay to stream music that will eat up all your data. If you had to pay, for example, another $10 a month to increase your data allowance, along with the $10 for Apple Music or Spotify, that doubles your cost to $20 a month.
Some mobile phone providers offer plans where data used by a specific streaming music service is not counted. This type of offer could certainly help tip the balance for many people who are on the fence, but the Nielsen study still suggests that nearly 80% of people will never pay for streaming music.
Music simply isn’t important to enough people to make them to pay for it. Perhaps a subscription price of five dollars a month could attract more listeners, but even that isn’t a given. Expecting the masses to pay for music is simply a delusion.