You’ve made some practical adjustments in life: bought a good headphone (microphone in the cord included), linked your car radio to your smartphone, bought some good speakers for you computer and a wireless system to listen in the rest of your house. You’ve now settled your music life in streaming mode. An all-you-can-eat streaming music subscription for 9,99 a month is your supply pipeline. This investment, value proposition and price value combination may appeal to the aficionados and the upper end of the mainstream, yet the majority is still not attracted to it.
Reviewing the pricing model of music will be key to unlock new consumers. But just simply lowering the monthly -all you can eat- fee is not a sustainable solution. On the other side changing the product offer would be a serious option. A simple: less is more. Less choice, more product value, so to say. When done right, niche music offerings should be able to fix the current pricing enigma, shrouded in cloak and dagger. Do you really listen to all music on Spotify? No you don’t. Does the majority really want to be able to listen to all music on Spotify? No they don’t.
Most people are not interested in all the music in the world and most people are not interested in spending 9.99 a month for that. Here the supposed benefit, turns into a problem. Acces to everything creates a tyranny of choice. Just 5% of a streaming catalogue is regularly frequented. Most of the rest is irrelevant for most consumers. There becomes so much choice that there is effectively no choice at all. 27.000.000 (twenty-seven-million!) tracks is such an amount of music that it would take 205 years to listen to; it feels like reading the internet.
What counts is the music that truly matters to the listeners, not the quantity. Consumers pay for a quality emotional experience.
According to MIDiA Research only 5 million tracks covers the ‘core’ catalogue, only 1 million the cover the ‘frequented’ tracks, and the superstar catalogue covers about 250.000 tracks. How many of those really matter to a listener? Maybe 8.000? Even that would be weeks and weeks of listening. The rest is pretty much irrelevant.
Most music fans like one or more kinds of music. Super fans are happy to pay for the ability to get everything, yet mainstreamers are not and that’s just fine. It just needs the right product offering to the right market.
Give those more casual music fans a product, specifically built around their tastes and the equation changes. Imagine a very well curated music selection (and I don’t mean a regular Spotify ‘summer roadtrip’ playlist), a few featured albums and a handful of radio stations, all just of your favourite style and available at one place. This delivers clear value, an emotional product experience and gives the industry an opportunity to open up new consumers that have thus far not been attracted.
While there is some risk of cannibalising other products and services, this should be very small since they would be unlikely to appeal to aficionados and the super mainstream. These niche market are getting more important and profitable even though they are small by nature. The advantage of specialisation and focusing on small, identifiable markets can compensate for the difficulty of not having a market of scale. Niche markets may be ignored by large businesses because of ‘small potential’, making the niche market available to smaller businesses, offering a valuable product for the ones who’re willing to pay for it.