Status: 02/22/2021 4:42 p.m.
From Constantin Röse,
ARD Stock Exchange Editor
When 25-year-old Anna listens to music, she prefers to use her smartphone or laptop – and that, as she says, feels like it around the clock: “While studying, I listen to music to concentrate – and when I’m doing sports make.” The student is one of around 400 million users worldwide who stream music. This means that she no longer owns her music physically, for example in the form of a CD, but plays it directly from the servers of a provider.
Most of her friends already do it that way, Anna says. The advantages are obvious. “I used to listen to CDs too, but you were limited to what you bought yourself.” The streaming account itself is not expensive, she says, and: “You have endless possibilities – and of course the music is always with you on your cell phone without having to carry around large CD cases.”
Spotify dominates the market
The Swedish company Spotify is the market leader in streaming services. Around half of its 345 million users pay for the service each month. In return, around 60 million songs are available. Free use with advertising is also possible.
The sales model behind it is called “Freemium”, explains Jürgen Seitz, professor at the Stuttgart Media University: “You first try to get people excited about the system – that is, to get them excited that I have all the music content, but also all the podcast content. ”
The n you convince your customers of a paid subscription: “That is a very intelligent marketing strategy,” says Seitz.
And this strategy works for Spotify: The Swedes can even hold their own against heavyweights like Apple or Amazon. From an economic point of view, this is a difficult business, because music streaming has hardly washed any money into the till: Spotify is still not making any profits. Reasons include the expensive music rights and investments in better, user-friendly functions.
The market launch in new countries also costs a lot of money.
Criticism of dealing with artists
The re is also criticism of streaming providers when it comes to paying artists. Spotify & Co. are making use of their market power, says Philipp from Stuttgart. He therefore deliberately refrains from using music streaming providers: “If I value a song, then the artist is much more helpful if I purchase it directly than if I make a stream on Spotify that costs 0.2 cents or something Whatever he gets in the end, “he says.
The music streaming market is booming – in Germany a little more restrained than in other countries, says media expert Seitz. But: “At the moment, all the figures suggest that growth will continue,” he says.
The only question is how fast the growth is – and how high the willingness of customers to pay: “Which prices can be enforced for these subscription offers?”
Is non-linear streaming replacing radio?
Market leader Spotify expects success in the future from exclusive audio content such as podcasts. Every fourth Spotify user already listens to podcasts. Spotify CEO Daniel Ek thinks even bigger. He thinks streaming will eventually replace radio. The re are billions of radio consumers worldwide who are slowly but surely shifting their listening habits to online offerings. And this trend is likely to accelerate the pandemic further.