Breaking saturation Music streaming pricing strategy
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Nearly two decades into the streaming era, established subscription markets like the US are approaching saturation. While growth pockets for standard subscriptions remain, the next stage is about raising average revenue per user through both price increases and user segmentation. To that end, this report tests US consumers’ willingness to pay for four streaming propositions: A standard subscription; an “ad-lite” tier; a “Supremium” tier; and upfront annual payment for a standard subscription at a discounted rate. This results in an optimal, revenue maximising price for each proposition, giving record labels, music publishers, and DSPs clarity on streaming pricing strategy.
Key data and insights
- Consumer willingness to pay for music streaming services, by price point, US, 2024
- Optimum price for music streaming (revenue maximising)
- Optimum price for Supremium (revenue maximising)
- Modelled expected average revenue per consumer, by monthly price point, and revenue maximising price, US, 2024
- How does advertising affect consumer willingness to pay for streaming services?
- How can upfront billing benefit streaming services?
- Analysis of music pricing model data, US, 2024
- Strategic recommendations for DSPs, labels, and other rightsholders
This report sources data from:
- MIDiA Research Artist Tracker and Pricing Survey (09/24) fielded in the US, n = 2009
Brands and companies mentioned: Spotify, Spotify Music Pro, Amazon Prime, Amazon Music, Apple Music, Best Buy, and Tencent Music Entertainment