BUSINESS

Canadians Only Willing To Pay About $6 To $8 A Month For Music Streaming: Report

06/08/2015 08:09 EDT | Updated 06/08/2016 05:59 EDT
Shutterstock / Aaron Amat

TORONTO - How much are Canadians willing to pay to stream music?

It's a question that continues to flummox analysts, record labels and particularly online streaming services.

As one component of its extensive Canadian Nielsen Music 360 report, Nielsen Entertainment polled consumers on how much they'd be willing to spend monthly for unlimited streaming of songs and albums without advertising.

The respondents, on average, said they would be willing to devote $6.20 per month or up to $7.80 for high quality audio. But, of course, they were speaking on a hypothetical basis.

Those numbers lie in the middle of the range of options offered by streaming services in Canada. And with Apple rumoured to unveil its own service imminently, much of the speculation has centred on how much it will cost.

Currently, Spotify offers a limited free service in addition to a $9.99 per month premium version, which offers ad-free on-demand listening. Newcomer Tidal provides subscriptions for either $9.99 or $19.99 per month. Rdio, meanwhile, recently introduced a new $3.99 subscription tier called Rdio Select, joining its free ad-supported streaming radio service and its $9.99 ad-free on-demand service.

The new plan allows subscribers to download 25 songs and replace them once per day, as well as offering unlimited song skips and high-quality sound.

"This is the coach class version, if we were an airline — and up till now, the only seats available on airlines were business class," said Rdio CEO Anthony Bay in a recent telephone interview.

Bay said the new tier — less than the cost of a latte, he touts — was essential in part because the average listener spends only around $45 on music annually.

"Although it's a tremendous value, the challenge with the $9.99 (monthly) price point is it's more than most people have historically spent on music," he said.

"We think the big opportunity is reaching out to people who have never been interested in subscribing," he added. "For those people, $20 per month is a big jump — even $10 for a lot of people is a big jump."We're very focused on the broad consumer market."

According to Nielsen's research, that market is growing quickly.In Canada, streaming volume is up 94 per cent since Nielsen began tracking streaming in July 2014.

The number of Canadians who reported streaming music in the past year grew to 71 per cent. And streamers skewed young; teens spent twice as much time streaming music as the general Canadian population.

Nielsen's study was derived from an online poll of 3,500 consumers aged 13 and up from April 12 to 27.Representatives for Tidal and Spotify declined requests for comment.

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