There has been a fundamental pivot in the way we create, consume, and share content. As the entertainment industry has shifted from analog to digital, the behavior on how the consumers spend money for online content has significantly changed. The question is whether this content should be free and accessible to everyone (if so, to what extent), or should artists, content creators, and influencers properly charge for the online content they create. If we believe that all online content should be free, will there ever be any motivation to buy this content, and if we believe that it should not be free, are we losing out on a larger fan base?
Some industries are adapting to new trends faster than others. The music industry in particular is finding it challenging to figure out ways to hook the audience on music streaming and encourage them to pay for online content. A large number of consumers still choose to think that music streaming should be free and are not willing to spend a little bit less than $10 per month to stream ad-free music, so they rather settle for a free, ad supported tier.
Film, TV and gaming are handling it way better and have managed to successfully navigate through the changes in user consumption. The recent survey (1) shows that movie and TV users are willing to pay $12 per month to be able to stream movies and TV shows. Interestingly enough, the survey indicates that a certain percentage of users would not mind paying even more, even up to 50% percent of the current rate, if the services were to increase the monthly price. As per the gaming industry, the new Juniper Research report (2) states that streamed gaming content will drive $3.5 billion in revenues by 2021, up from $1.8 billion in 2017. The study also emphasizes value added content as they believe that the access to exclusive content such as sale of merchandise, time-limited content, and access passes will contribute to increased revenue.
Fighting vs Adapting. The issue on such disparity possibly lies in how those particular industries were able to adapt to changes in consumer behavior and cultivate their audience at the same time. While the music industry has been fighting a battle against streaming services for several years instead of adapting it as a new way of how people listen to music, the movie industry has gone hand in hand with alterations in the content consumption, being able to foster their users in a sense that they are willing to pay for the content.
Big solution for music in a smaller package. Recent studies show that there is a smaller group of people who value quality content and are willing to spend money on it. According to the Nielsen report (3) from 2013, 40 percent of U.S. consumers — those classified as fans — are representing nearly 75 percent of total music spending, and they spend between $20 billion and $26 billion on music each year. The report also points out that the fans could spend an additional $450 million to $2.6 billion annually if they had the opportunity to get access to the exclusive content.
Proof in the numbers. Statistically, there is a group of super fans who already spend a large amount of money for online content and are willing to spare a couple extra bucks out of their pocket, if they could connect with the artists on a deeper level and share their personal experience, which confirms that not all online content should necessarily be free. If creators and influencers offer content compelling enough, meaning that the content is value driven and individual, the fans will be willing to pay a fair price to get access to it. Additionally, if the content creators figure out what their fans really want and enable a two-way conversation between artists and themselves, the fans will perceive the real value of online content.
VP of Acquisitions at FanCrater.com | Editor/Founder at GoodBAMMSho.com | Music Business Dude | Creative Entrepreneur