Study Says Consumers More Willing to Pay for Music Streaming — Except in Sweden
Consumers in some European countries are increasingly willing to pay for streaming services such as Spotify, Deezer and WiMP, the sponsor of the survey.
The percentage of willing payers has risen to 48% from 33% in Norway. Willing payers rose to 30% from 14% in Denmark and 28% from 25% in Germany. Forty percent of Poles surveyed expressed a willingness to pay. Poland was not included in the survey results WiMP released last year.
A different trend is seen in Sweden, where subscription services account for 90% of digital recorded music revenues. Swedish consumers’ willingness to pay dropped to 33% from 36% in the survey performed in June of last year.
Some variance between countries is understandable. Norway and Sweden have high adoption of subscription services. All the countries but Germany have had subscription services for a number of years. Germany got Deezer in late 2011 and Spotify last year. But the drop in Sweden’s willingness to pay is reason for pause. (One thing to remember: willingness to pay could have actually increased when considering the survey’s margin of error.)
On average, 75% of consumers expressed either willingness or interest in paying for streaming services. A large portion of consumers said their willingness depends on the service. A quarter of consumers, on average, expressed no desire to pay.
Although the survey hints at the size of the potential market in these five countries, it does not reveal how to close the gap between willingness and participation. Two related questions need to be asked:
1. How much are people willing to pay? Unfortunately, a WiMP spokesperson said the survey did not ask consumers what price they would be willing to pay for a subscription streaming service. This is an important question. Current prices are being paid by heavy music consumers but are unlikely to appeal to mainstream consumers. Then again, asking consumers what price they would be willing to pay for an unfamiliar service (see lack of awareness below) may not produce an actionable result. People can’t properly value something until they have experience and familiarity with the product.
2. Why aren’t some people subscribing? Each country surveyed has multiple subscription services (namely WiMP, Deezer and Spotify). So why is there a gap between usage and willingness? WiMP does not provide an answer for this question, either. Two factors seem obvious, however. First is lack of awareness. Today’s subscription services simply don’t have the resources to market themselves. Instead, they subsist on word of mouth and media coverage. The second factor is price. Again, current sticker prices are probably not suitable for mainstream consumers.
A greater willingness to pay appears to be linked to greater comfort with streaming. WiMP’s survey shows consumers in all five countries expect to stream more and listen to CDs less next year. For example, 58% of Norwegians surveyed expect to stream at least every week next compared to 36% who stream every week currently. There could be a concurrent drop in CD listening: 6% say they never listen to CDs but 14% expect not to listen to CDs next year.
Source: Billboard
