It’s About Belief

Posted by Russ Crupnick on

The following article appears today in RAIN News:

When my daughter was born I bought my first Volvo. I believed it was the safest car for my family. I’ve bought many more since and today, she drives a Volvo. What does this have to do with radio or music or streaming? As we celebrate (well some do) the launch of Apple Music this week, success will reflect how much belief Cupertino can create around the paid subscription model. Here’s what it won’t be about:

1. It won’t be about price

The argument goes like this. Consumers used to spend $100 on a few CDs. Therefore $120 for a subscription is going to be a great alternative to buying CDs or downloads. All the music you want for much less money. Here’s the problem. The majority of Americans spend nothing on recorded music. According to MusicWatch’s Annual Music Study fewer than 4 in 10 Americans paid for music. The average CD buyer spent $30 on CDs, while download buyers spent $59. Overall the number was $52. And it’s irrelevant. Research shows that we buy CDs or downloads to celebrate music that we want to collect, particularly from our favorite artists. Occasionally we discover new music and buy that too.

Within reason, the monthly fee won’t matter. Believers will pay anything reasonable, doubters will pay nothing.

2. It won’t be about celebrity

The Tidal team is learning this. Celebrities can create awareness. But streaming services are a utility, not jewelry. You had to have an iPod, not a Zune, and iPhones became cooler than Blackberries. We may evangelize our favorite service but nobody on the subway cares what streaming service you listen to. It’s not a personal brand.

We should applaud artists who stand up for compensation. When the conversation makes it to the Today Show or Twitter we pay attention, but only briefly. The truth is that the public has no clue what the conversation is about, and probably cares even less.

3. It won’t be about prohibition

MusicWatch research shows consumers aren’t likely to pay based on windowing content or removal of certain artists or songs. Exclusives may not be effective either. Only 9 percent of streamers claim they would be persuaded to pay because of artist exclusives. That was pretty low on the list of motivating factors. There are simply too many options, and frankly, too much to listen to. If there’s a hole in the catalog it won’t sink the ship. That’s not to say that a window couldn’t help a particular artist sell more at iTunes or Target. It’s just doubtful that prohibition is the best tool for attracting paid subscribers.

If Apple Music is successful at building a subscriber base it will be because consumers believed. What will constitute belief? It is the ability to thoroughly control the music that you listen to. That is one of the few things that the freemium model does not offer. Control means being able to select which artists, which albums and which songs you listen to- when you want, where you want, and on the devices you want. If you value that, you will pay. Apple is betting that the free trial will help make you a believer.

Conversations around sound quality, social connections, and curation all have a place. When we write the story of Apple Music it will be about whether sufficient numbers of people cared enough about control to make it a success.

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