More than 5.2 million people (10% of the UK adult population) already subscribe to paid music streaming services and half of these subscribers don’t plan to ever buy a CD again, according to new research findings published by YouGov and subscription commerce solutions provider Zuora.
Music streaming revenues in the UK grew by 49% to £251 million last year, yet streaming providers still have pricing hurdles to overcome in convincing the remaining 90% of the UK population to sign up for a paid subscription, the study suggests. Almost half (48%) of non-subscribers still think music streaming services are too expensive.
Currently, the average UK subscriber pays £7.07 per month on music streaming services. The UK-wide study conducted for Zuora by YouGov demonstrates the rising preference of UK consumers to pay a recurring fee for ongoing access to music. Nearly four million people (3.7 million or 71% of music streaming subscribers) said music streaming services have changed how they listen to music forever.
Half of Brits who subscribe to music streaming services like Spotify or Apple Music (52% or 2.7 million) don’t plan to ever buy a CD again. More than a third (37%) ‘rarely’ listen to the radio any more due to music streaming services, which have become ‘an integral part’ of their lives (66%). When asked about the benefits of music streaming, Brits overwhelmingly cited the ability to access a huge collection of artists and songs at their fingertips (88%) and to discover new artists and bands suited to their taste (83%).
The consumption shift from products to subscriptions has far-reaching implications for not only consumers but for also for service providers, Zuora notes. To reach the huge greenfield available to them – the 90% of UK adults yet to adopt streaming music services – companies must continue to deliver personalised, curated and customized experiences enabled via innovation in pricing and packaging of subscription music.
Music isn’t the only industry being transformed in the Subscription Economy. The most widely used digital subscription service in the UK is video streaming, with more than a quarter (27%) of consumers subscribing to the likes of Netflix, Amazon Prime or Sky Go. Other popular subscription services include media publications (17%), software and online storage (15%), financial services (12%) and food and drink services (5%).
Overall, the Zuora report, A Nation Subscribed: 2016 State of the UK Subscription Economy, found that 40.2 million Brits (78% of the adult population) are now subscribing to at least one product or service. As the notion of paying regular fees for curated access to goods and services becomes mainstream across all age groups, British subscribers now spend on average of 12% of their disposable income on subscription services.
Zuora chief executive Tien Tzuo commented: “Subscription-based music consumption is clearly gaining maturity, with well-established services such as Spotify and Apple Music, and new entrants like Amazon, offering endless access to content. However, with only 10% penetration in the UK music market, there is a lot more room to grow. Modern consumers are looking for outcomes, more personalised experiences to match the value they get from their ongoing streaming music investment. The winner in this race will succeed by delivering the most compelling experiences matched with tailored pricing models that meet consumer expectations.”
Music streaming service subscriber Leah B., 19, from Lincolnshire added: “Buying and owning products isn’t that important to me. I just want the value in what they deliver, rather than the item itself. For example, once I’ve read a book I don’t keep it, I’ll pass it on to friends or donate it to charity. Otherwise it would just be gathering dust sitting on the shelf. Similarly, it’s much more convenient to just stream movies online than buying DVDs, as I get access to the same experience but without the physical product. It’s perfect for what I want! I’m also in the process of moving into my own place where there will be little space and storage options, so I need to be very smart about what products I keep and what I don’t.”