The majority of consumers today are not paying anything to listen to music today, but they might if they were given a good reason.
According to research conducted by MusiComm, which looks to connect music distributors with technology companies, more than half of consumers (52%) don’t pay anything for music services. The majority (25%) of them rely on free AM/FM radio, while another 15% use free Internet-based music services and 7% use Internet video services.
“This has been a big challenge for the industry,” Juliet Shavit, executive director of MusiComm, tells Marketing Daily. “As the music industry has moved to digital models, the price has gone down a bit.”
Still, two-fifths (40%) of consumers said they would never pay more for their music (and 17% said they would never pay for music). But a quarter of them said they would pay for music, if they knew the service they were using would benefit the artist and creators. Another 15% said they would do so, if they thought it would save the music industry.
Those findings suggest the music industry needs to do a better job communicating how its digital models directly benefit the creators, Shavit says. Much as consumers showed a willingness to pay more for organic and additive-free produce once they learned about it, the music industry should take an opportunity to explain why payment systems are important and how it may help the creators, she says.
“There has not been a conscious effort to educate consumers about how this affects the industry, and I think there’s a chance to come forward and do so,” Shavit says. “The average person has no idea that the people who are creating these songs aren’t making enough from them.”
The research also suggests a shift in distribution models may also entice consumers. Of those who pay for music, more than three-quarters (77%) said they do so through technology companies such as a TV provider, phone company, electronics company or other service, indicating there is an opportunity for these companies to create models that have a greater appeal to consumers, Shavit says. Consumers also indicated they would be open to having services directly connected to their connected in-home devices.
“The recent survey results underscore the need for music companies to develop profitable, strategic distribution partnerships with technology companies and service providers in a continuously more digital world,” Shavit says. “2018 will be a critical year for these partnerships to help organize and standardize the metadata and analytics to make accurate reporting and profitability a true possibility.”