Simon Wheeler, director of digital at Beggars Group, has said that the potential for growth in streaming is ‘huge’ – especially overseas – as the market develops rapidly.
Talking on a panel at the NY:LON Connect event in London yesterday (Tuesday), Wheeler said that streaming has become Beggars’ largest recorded music revenue generator.
He added: ‘The last year or 18 months have brought the fastest change I’ve seen in all the years I’ve been working in digital music… The potential for growth is huge – we haven’t touched the sides in terms of countries.’
‘We always used to say that 100 million subscribers was where it was all kicking off but I think that idea was based on people paying 9.99 in pounds, dollars or euros – not however much people are paying in China, Thailand, Latin America, Russia or other places we’re now seeing growth.’
Alongside Wheeler, the panel gathered Scott Cohen, founder of The Orchard, Jonathan Dworkin, Universal Music Group’s senior vice president of digital strategy and business development, Sony Music Entertainment UK’s vice president of digital Dorothy Hui and Elizabeth Moody, vice president of global content licensing at Pandora.
Together, they were tasked with discerning if streaming has turned a corner in terms of growth and reach, and what lies in store for the fast-growing market.
When asked by moderator Paul Brindley, chief executive of Music Ally, if the £9.99 price point for subscription services should be lowered to attract more customers, Dworkin said: ‘We’re seeing a phenomenal scaling of the business, so I don’t think now is the right time to start cutting the price.
‘We’re just at the beginning of the growth curve. We shouldn’t be slashing prices at the top end. There’s a bigger challenge in getting people over the paying threshold at all verses the price point.’
By the end of last year, the music industry recorded more than 100 million paying subscribers for premium services from Spotify, Deezer, Apple Music and others.
With all platforms currently offering similar price points across Europe, the UK and US, some industry analysts have previously suggested that reducing them could help growth.
However, Wheeler said yesterday: ‘I think within the economic model of streaming, it’s pretty hard for songwriters, artists, labels, publishers and services to make any money as it is.
‘So cutting the price at the top end, when we’ve got millions of subscribers coming into the marketplace every month, does seem to be the wrong thing to be doing at this point in time. I’m not going to say we don’t go there at some point, but that’s far ahead from what I can see.’
NY:LON Connect has been organised by Music Ally and the Music Business Association to bring together leading executives from the international music industry to discuss and debate key issues. The event will alternate between the UK and the US, and runs in London from 24 to 25 January 2017.