Why Do We Still Pay Only $10 a Month for Music? - Rolling Stone
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Why Do We Still Pay Only $10 a Month for Music?

The price of music streaming has stayed flat for a decade, but not because tech companies are generous

MODEL RELEASED Young man with modern, wireless bluetooth-headphones enjoying the music from his smartphoneVARIOUSMODEL RELEASED Young man with modern, wireless bluetooth-headphones enjoying the music from his smartphoneVARIOUS

2020 may be the year we finally see a price hike on streaming services..

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Of the litany of things you can buy for $10 — a sandwich, a box of pens, and a print magazine among them — unlimited access to a catalog of 50 million songs is one of the most bang-for-your-buck options out there. But that’s how much music-streaming subscriptions have cost their entire existence.

The coming year may be when that finally changes, for a number of reasons. First, Spotify, the leader of the music-streaming market, recently entered its second decade of existence towing 250 million users, 110 million of whom are paying subscribers; when tech companies hit such major growth milestones, they tend to hike up prices to begin recouping previous years’ lost revenue, which is why Uber rides, Seamless deliveries, ClassPass sessions, and the products of other startups-turned-behemoths are more expensive now than they were at the start.

The music industry would welcome higher prices with open arms, as it’s griped about streaming’s meager payouts to rights-holders for a decade now. That’s on top of the fact that nearly every other type of subscription, from Netflix to Amazon Prime, has boosted fees over that same decade — sometimes more than once. Per the U.S. rate of inflation, even a $10 bag of apples in 2008 should cost somewhere around $12 today.

So why hasn’t anyone been charging more than $10 a month for music? “It’s a billion-dollar question,” says Russ Crupnick, managing director of music research firm MusicWatch. “It’s been at least 15 years, if you include Rhapsody, that music subscriptions have been sold for the same price. Yet if you think about it, they work on more devices than ever, and have bigger catalogs and more features and functionality than ever. It’s a measure of the competitiveness of the environment that the prices haven’t changed.”

With a dozen streaming services all offering the same songs and albums, it’s risky for any one company to take the first step into users’ wallets. “The one big difference between music and video is that Netflix has House of Cards and Orange is the New Black and all that,” Crupnick says. “If you are really a fan of someone’s original content, they can get away with sneaking in increases because they know you’re waiting for the next season to binge. In music, if your favorite streaming service said they were going to raise prices, you could easily switch to a different one. There’s no House of Cards exclusive for them to offer.” (Music streaming did once make a foray into album exclusives, but it was ill-received and short-lived.) And while Spotify may suffer financially from its low pricing right now, juggernauts like Amazon and Apple don’t mind operating their music arms at a loss because the rest of their businesses are profitable enough to compensate.

One route that music services could take is toward tiering — offering high-resolution streaming at a higher price, as TIDAL and Amazon do. Another is raising fees in regions that will tolerate it, as Spotify has been doing with experiments in its home region of Scandinavia. Going more niche could be another tactic: In a study by YouGov and Dutch-American classical streaming service Primephonic this month, 52% of American music fans said they would be willing to pay more than $10 a month for “a streaming service that truly meets their needs,” with some willing to go as high as $20 a month. “It has become very clear that the ‘one platform fits all genres approach’ of major streaming services such as Spotify and Apple Music is increasingly causing frustrations with music lovers,” Primephonic’s CEO Thomas Steffens said in a note accompanying the study.

But offsetting the potential avenues toward charging more money is a sentiment that the standard $10-a-month price point for music may be too psychologically entrenched in the culture to ever budge. “The problem is that there are so many places you can listen for free,” Nick Gatfield, a longtime music executive and the former CEO of Sony Music UK, tells Rolling Stone. Gatfield sees more potential profit in the “two-sided marketplace” that Spotify and other streaming services are exploring, in which the companies would charge artists and labels fees for using their data analysis tools, because the consumer music-streaming market is already too saturated to introduce much change. “It’s an incredibly tough game,” Gatfield says. “Unfortunately, music is like a utility now; you switch it on and it’s there.”

In This Article: music industry, music streaming, RSX


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