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In a recent presentation to music and tech industry executives, NPD Group’s Russ Crupnick had some interesting things to say about music streaming. According to Crupnick, on-demand streaming services like Spotify result in a 13 percent decrease in paid downloads. He went on point out that services that follow the “radio” model, like Pandora, increase sales 41%.
Pandora doesn’t allow users to select specific songs like Spotify, but instead plays music in a chosen genre more or less randomly. The unsurprising conclusion is that people are less likely to buy a song if they can stream it at any time. Perhaps it isn’t that simple; is it possible to draw enough new users to increase overall sales? The key for Spotify may be the effort to convert free users to paid premium users.
This report is just the sort of thing music labesl could use to justify keeping Spotify from launching in the US. Warner Music Group Chairman Edgar Bronfman said earlier this month, “Free streaming services are clearly not net positive for the industry.” If Spotify launched stateside, would you ante up for extra features like mobile streaming?
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vicky123
April 09, 2010 at 7:17am
I agree with you online streaming is always decreasing sales. Many of the websites provide online streaming and Edgar Bronfman Jr. said no more free online streaming now. But we can't bann music streaming. So is there anyway to out of this problem. The effect of the streaming is shown on my music sale also.
http://www.loudbeats.com
Mighty BOB!
February 26, 2010 at 11:25am
I probably wouldn't cough up for extra features, although I do not know how Spotify works. I've subscribed to Pandora, but only since they implemented that 40 hours per month limit on free users.
I have to say though, that my own personal experience backs up what the NPD is saying. I've bought more music that I've heard on Pandora than I have from the numerous music uploads on YouTube that I can stream whenever I want.
To0nces
February 26, 2010 at 5:53am
I don't know how Spotify works, but services that play music in a genre for you at random can expose you to new bands or singers you might not have heard before, increasing their audience. Logically, that would mean more sales. But of course instead of seeing the 41% increased sales, the labels are going to look at the 13% less as the bottom line. Ridiculous.
