A report has found that 66% of US households with broadband are using a music streaming service.
According to the digital audio report by Parks Associates 40% of US households with broadband are using a free service to stream audio and 26% are using a paid music streaming service. The report showed that of the paid services available Amazon Prime Music came on top with 10%, shortly followed by Pandora one at 6% and Spotify Premium at 4%.
The survey covered 10,000 US households with broadband and was taken before Apple Music’s launch at the end of June this year. It’s surprising to see Amazon come out on top with their slightly less expansive music library than competitors however with it’s overall cheaper model and extra features (one-day delivery, amazon instant video) it’s easy to see how it could have a broader appeal.
Research analyst, Glenn Hower, said: “Consumers have shown plenty of interest in streaming audio and music services, but most consumers have opted for free accounts. Music service providers have built a model around converting free users into paying customers, but this strategy has not paid off so far.”
Hower continued: “The big question moving forward is if streaming music providers can achieve the scale they have been seeking to balance their ad revenue with paid subscriptions revenues, all while striking fair licensing agreements with artists”
Whilst ad-supported freemium is the most popular form of streaming it brings in less revenue than a paid subscription does hence why companies with free models like Spotify are looking to bring exclusive content in some form to entice premium users. However royalties are rising as does Spotify’s popularity, having paid out $1 billion in 2014 alone, double the $500 million paid out in 2013 – the same payout as between 2009 and 2012.