Editor's Note: Music streaming music will soon rule the Internet, which is an play Angela Games indisputable fact. The problem is that when music streaming to find effective profit model. US Billboard magazine recently published an article on the current business model of the five music streaming analyzed. Let's see which mode is most future career prospects. Article a bit long, but very valuable. Original entitled "The Battle of Subscription Business Models: A Look at Their Strengths and Weaknesses"
OF / Glenn Peoples compile / New Music industry watchers Labs
2016 will be the survival of the fittest music streaming service, the rapid evolution of the year. With the advent of on-demand services Pandora year, the music industry will have five categories of music subscription model, competing for the fans and the entire industry recognition. Just as Darwin discovered the Galapagos finches, each model has been formed, and with their surrounding environment changing. If the plants, animals or the weather may cause changes, some services may not be able to adapt.
A successful model needs to work under complex constraints. Pure free mode, under the competition needs of all listeners paid model in the past two years has been under attack. Copyright owners and creators do not want the song to be provided without permission of their rights, and would like to attract more paying customers. They succeeded in their will to balance their rights.
Paradoxically, however so far - five pure free model is one of the most successful models. In the end is the copyright owner and songwriter unstoppable force? Status still can not shake free services continue?
Some business models to exploit its size and advantages of the parent company or the tech giant, to get the user. No corporate funding, a service needs to operate under conditions of low profits, alone to face the challenge to build user awareness. With almost unlimited bubble asset management, these services can be adapted to maximize the current industry environment.
Although now in the download era, but even in the heyday of the sale of CD, many large music vendors is to CD as a tool to attract customers, rather than simply doing as Tower Records music specific retailer. In any case, with the help of music while sales of other products, usually really can play very good results.
In simple terms, the following will be mentioned five modes, represent different ways to gain customers and market. (Royalty payments, as well as their role behind the success of these models are played, are not included in this discussion.) At a time of the survey, consumers are showing more interest in the subscription service, and for their willingness to pay a subscription service also than the actual number of subscribers to more companies.
A recent Nielsen survey shows that 78% of fans expressed will or will pay for the music streaming service in the next six months. This figure is very encouraging, but only close to zero people will become a real subscribers. The challenge is how to allow consumers to experience the service, and to understand its function. Services allow consumers to build consumer awareness of this step, it is very difficult and expensive job. Model mentioned below, in order to reconcile these issues mostly established.
Optimists might think that these five modes can compete harmony in this growing market. Pessimists might think, subscription services market requires great scale, only a handful of service in order to survive in this winner-take-all market, as we saw Netflix and paid video streaming. The most likely outcome appears in between the two. Most advantage and support the industry model can help push some of the services, and other digital music eliminated.
Pure freemium
Representative: Spotify, YouTube
Free access is typically causes an access paid. This is called freemium. Commercial operations will not assume that all users will become consumers pay. The secret is to get a small portion of free users to upgrade to a paid service in order to provide more functionality. This model with cloud-based services play fishing games is common good because they can be expanded and increased user costs low.
Spotify is a standard example of free value-added model. It provides unlimited, ad-supported free streaming service, and formed about 9% of annual revenue. The service is free entrance to its subscription service, and subscription services make up another 91% of annual revenue.
About Spotify dispute can not be ignored. Many copyright owner and songwriter opposition freemium (this mode will hereinafter be referred to the next and pattern) because the number of each ad-supported streaming service. According to David Lowery of Trichordist blog, the average for each copyright Spotify streaming is 0.521 cents, well below only pay service Rhapsody (1.12 US cents), Xbox Music (0.32 US cents) and GooglePlay (0.46 cents ).
YouTube and SoundCloud also belong to this category. YouTube launched in 2005 has always been a free video streaming service. At the end of last year, YouTube added a high-quality level of service, called YouTube Red, available to subscribers without additional advertising services and more exclusive content. SoundCloud is another free service, some streaming media advertising sales.
By comparison, independent music and music Spotify derivative works included (remixes, etc.) will be more expensive, and there is no comprehensive music company included. Therefore, it is planning to add some premium services, to complement the free service.
Pure free value-added services to attract large number of users, thus threatening its existence for the formation caused a lot of objections. Some record companies want to change the mode to provide unlimited, requiring the listener to pay before, you can listen to on-demand trial period. Innovation community, the most noteworthy of Taylor Swift, Adele and more recently and Rihanna, both for their own copyright in ad-supported free value-added services and the tax rap or complained.
Although the audience may be because Spotify under the premise of free access to compulsory set limits, and turned to YouTube, but it will also be a good opportunity for Spotify free to change its properties in order to appease the companies to continue to offer their Spotify music. If this happens, the number of songs you can listen to for free may be limited, or to allow the singer to his songs can not be set free listening.
Limited freemium
Representative: Slacker, Pandora
Limited freemium is less controversial freemium inside a model. The key difference is that it provides the upper listeners pay, on-demand service. Slacker has already adopted this approach. The latest incoming person is a Pandora.
Of Pandora, the maximum limit freemium from the audience, do not need to interact with the operation play girl games of a broadcasting service in nature, because it is not on-demand. The number of songs the listener can listen, dance songs, listening to the same frequency singer, are restricted.
Article 114 of the US Copyright Act provides for those who want to limit permitted by law without interactive services (not demand the right to choose the songs to prohibit the inclusion of previously released songs playlist, artist or album limit unified song playback frequency) If you select a service directly rather than statutory license license, as Slacker, as will be required to comply with the same or similar rules of record companies.
In areas outside the United States, a legal license is not provided, free advertising broadcast and on-demand services require direct authorization.
Pandora has a unique advantage: its starting point is its extremely large number of very popular Internet radio service. This requires annual subscription service, to build consumer brand awareness, and induce consumers to the free services or paid services trial experience.
Pandora users to build their own, starting with nearly 80 million listeners per month, and an unknown number of registered users. Brand awareness is no longer a problem. Allows registered users to use the free service task is complete. In fact, Pandora has a strong leadership position in the US.
According to December figures Triton Digital display, Pandora has opened 50 percent of the program, far more than Spotify, and there will be nearly seven times as the next major program without interactive broadcast service is turned on, as iHeartRadio.
Users pay only the monthly volume of low value with little or no pay for music - - Given Pandora user base composition and size of the formation of free users want to upgrade to a paid user mass is almost impossible.
Most radio listeners are free to meet as a free broadcast listener. (According to reference, Pandora's 80 million active users, about 4 million users to buy ad-free service Pandora One.) Still, pay-on-demand service allows Pandora users to retain a certain amount, to fill the existing Pandora user demand expenditure and attract new consumers.
There are also relatively safe method. Because Pandora has begun to focus on the monetization of audience for free, so it will not be dragged down by the cost of content. And then it's a free service for legal permission, so at least in the United States, the music label can not be a threat to Pandora Frozen Games -
Juegos de Frozen -
Jogos de Frozen -
Permainan Frozen -
Игры Холодное сердце
Giochi di Frozen -
Frozen Spelletjes -
Gry Kraina lodu -
Elsa Spiele -
Jeux de Frozen -
Elsa Oyunlari mode. (Label also has a number of ways. Some of them have settled into a proportional increase in the end of last year.)
A variety of indications that limited free value-added service model will prevail no limit freemium. Major record companies want to reduce Spotify unlimited free listening service. Taylor Swift still opposed freemium model, and it offers free unlimited music social network.
Pandora way as to limit or not limit mode a compromise. Limited mode provides unlimited listening, but not paid part-function mode. Results view, it would be a wonderful way to attract listeners.
(On how to correctly understand the "limited freemium" It is strongly recommended to read this: an open letter to Pandora CEOs: Music really can not free up!)
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