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More than 5.2 million people (10 per cent 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 research findings published by YouGov and Zuora, a provider of subscription commerce, billing and finance solutions. Music streaming revenues in the UK grew by 49 per cent to £251 million last year, yet streaming providers still have pricing hurdles to overcome in convincing the remaining 90 per cent of the UK population to sign up for a paid subscription. Almost half (48 per cent) 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 per cent 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 per cent or 2.7 million) don’t plan to ever buy a CD again. More than a third (37 per cent) ‘rarely’ listen to the radio anymore due to music streaming services, which have become ‘an integral part’ of their lives (66 per cent). When asked about the benefits of music streaming, Brits overwhelmingly cited the ability access a huge collection of artists and songs at their fingertips (88 per cent) and to discover new artists and bands suited to their taste (83 per cent).
The consumption shift from products to subscriptions has far-reaching implications for not only consumers but for also for service providers. To reach the huge greenfield available to them – the 90 per cent 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 per cent) of consumers subscribing to the likes of Netflix, Amazon Prime or Sky Go. Other popular subscription services include media publications (17 per cent), software and online storage (15 per cent), financial services (12 per cent) and food and drink services (5 per cent).
Overall, the Zuora report found that 40.2 million Brits (78 per cent 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 12 per cent of their disposable income on subscription services.
Tien Tzuo, CEO of Zuora 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 percent 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.”