When Spotify disrupted the digital music market in 2008 and made millions of songs available on demand, consumers ecstatically embraced the abundance of choice and the potential for future growth. Just over a decade later in 2019, online music streaming is an estimated $11.1 billion market1, and big players are starting to look for ways to gain a competitive advantage.
In this blog post, we take a look at how U.S. audiences engage with music apps, including iHeartRadio, Pandora, Soundcloud, Apple Music, Spotify, and Google Play Music, and discuss how their audiences vary across mobile web and app, as well as examine time spent across those access methods. We also pay special attention to the differences between free and paid subscriber user bases and look closely at whether paid users are getting their money’s worth.
1. Mobile apps monopolize time spent on music platforms
Most music services offer a variety of ways for audiences to engage – whether on a desktop app, mobile app, or even via mobile web browser. However, we found that U.S. online music audiences overwhelmingly spend their time (96.9 percent of monthly total minutes) on mobile apps, meaning the battle to attract and engage audiences almost exclusively takes place in apps. The remainder of this blog post will focus on exploring these app audiences.
2. Top music apps capture almost entirety of total minutes for all music apps
Shown below, the top three percent of U.S. music apps capture nearly 90 percent of total time spent in the Music category –– and the top 10 percent of U.S. apps capture almost 98 percent. This appears to be a classic winner-take-all scenario, with most users locked-in to one or two services, leaving little room for growth by smaller platforms beyond niche market offerings.
And music giants don't seem to share user bases. We examined the audience share of two similar music streaming services: Apple Music and Spotify. In the month of June 2019, we found a relatively small audience overlap of 14.3 million Unique Visitors, or just seven percent of the total U.S. mobile app audience2. Users of the largest streaming music apps can customize their experience, build playlists, and follow their friends' playlists. These unique personalization features are not easily transferrable between services, and as more users customize one app, their ability to switch services without effort diminishes. Having to re-customize and recreate their personalized settings may also discourage consumers from having multiple streaming services that they use regularly, effectively decreasing their switch responsiveness to product changes, price increases or music catalog changes.
3. Paid subscribers engage differently than free users
Of course, the questions that keep music streaming services up at night likely involve how to reach more people, and more importantly, how to convert these people to paid subscribers. We’ll spend the rest of this blog post examining how the paid vs. free dynamic currently plays out for various major players.
In the U.S., roughly three-in-four consumers use an ad-supported free version of an online music streaming service rather than paying for the ad-free version.
Of Comscore Plan Metrix® survey respondents from June 2019 who said they subscribe to an online paid music service, 22 percent subscribe to Pandora, 21 percent subscribe to Apple Music and 21 percent subscribe to Spotify.
If we look at the services that reach the most users who have a paid subscription to any streaming music service, we see that Pandora has the most success, while iHeartRadio reaches the fewest users who have a paid music streaming subscription to any service.
In terms of time spent across free and paid subscribers, we see more minutes streamed from free users given the large number of ad-supported accounts. Free account usage comprises 76 percent of the overall streaming services total time spent. More specifically, free users on Spotify and Pandora significantly out-listen their paid counterparts in total minutes streamed.
This poses an interesting question: Are paid subscribers really getting the most out of their paid subscriptions?
To answer this, we looked a layer deeper into the data and examined the monthly average minutes per visitor for both free and paid subscriptions. Interestingly, we found paid subscribers spend, on average, 45 minutes more per visitor in their music subscription apps than free account users. This equates to 628 ad-free minutes per paid user opposed to 583 ad-supported minutes per free account user.
When looking at free and paid average minutes per visitor for Pandora, Spotify, SoundCloud, and iHeartRadio, there appears to be a higher tolerance among Pandora and iHeartRadio subscribers for ads (or possibly, less disruptive ads), given the near-equal average minutes spent per visitor across free and paid users. This higher tolerance for ads may be due to the more traditional radio format of the Pandora and iHeartRadio platforms, where ads are experienced as less disruptive and more acceptable during breaks in audio content.
Additionally, this could indicate Spotify and Soundcloud have succeeded in creating experiences that encourage paid subscriptions - such as paid subscribers having the ability to select songs from their playlists on mobile devices.
Music streaming is now an overwhelmingly mobile consumption category, and time spent is concentrated at the top on the major service platforms like Spotify, Apple Music and Google Play Music. Because user-specific customization is not easily portable between services, there tends to be little overlap between users of each service. Consequently, smaller services may have significant barriers to entry into anything other than niche streaming audio markets. As music streaming matures, we see top players experimenting with exclusive features or artist releases to sway audiences to subscribe.
Going a level deeper into the data, paid users on the whole listen for longer periods of time than free users, possibly fueled by important features only available to those paying subscribers. Music apps looking to increase conversion may choose to focus on features available to subscribers or look to in-app ads that promote conversion to paid accounts.
Audiences around the world are shifting their behaviors to be more mobile-oriented than ever before. But what are the underlying dynamics driving mobile media and app activity amongst consumers? Download Comscore's 2019 “ Global State of Mobile” report or contact us to learn more.
2 Source: Comscore Mobile Metrix, Mobile app only, Spotify (mobile app) vs. Apple music (mobile app), June 2019, U.S.