Pandora, UMG, Orchard Execs Talk Lower Streaming Prices (Surprise, They're Against It)

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Now that there are over 100 million paid subscribers to music streaming services, is it a good time lower the prevailing price point ($9.99/month) in order to pave a speedier road to 150, 200 and beyond? No flipping way, argued a panel comprised of execs from Universal, Pandora, Beggars Group and others at Music Ally's NY:LON Connect conference on Tuesday.

"It's pretty hard for the songwriters, the performers, the labels, the services -- it's kinda hard for everyone to make this a business as it is," said Simon Wheeler, director of digital at Beggars Group. "So taking off the top end when we have millions of people coming into the marketplace... I don't say we don't go there at some point, but that point is far ahead of us."

UMG's svp of digital strategy Jonathan Dworkin argued that if consumers want a more affordable service, there are already several mid-tier options (see: Amazon Prime Music) and discounted mobile bundles, like Deezer's pairing with Cricket. "It's very hard to have price attrition at the top end, and then in a future and more mature market, move back up," he said.

Scott Cohen, founder and vp of international at The Orchard, agreed that slashing the $9.99 price would be short-sighted. "I don't think we need to cut the top to bring in the bottom," he said. "We need to have a clearer division of 'here, you can consume all of it for free', and it's too blurry about what gets you to where it is paid."

According to Elizabeth Moody, vp of global content licensing at Pandora, "we really haven't touched the mainstream yet" of casual music fans paying for one of the subscription services.

Dworkin also criticized what he called the "obsession" with per-play streaming rates, which vary from service to service. "The reality is, what you have to look at is ARPU (Average revenue per user) and lifetime customer value," he said. 'The conversation with artists is not about 'why am I only getting fractions of a penny', but that it is a good thing to take a $50 average annual spend on music consumer, and turn them into a $120 average annual spend on music consumer."

Read more from the panel discussion on streaming here.


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