Is Bundling How We Finally Get People to Pay for Streaming Music?
If you’re anything like me, you’ve spent the last week reading through the cascade of snark reigning down on Tidal. Once you cut away jokes about Jay-Z and the Illuminati, the consensus seems to be that the service is fine — it’s just pointless. It has albums, and playlists, and “exclusives,” (which all show up on YouTube within minutes of being posted), but nothing about it seems all that compelling.
Then again, for average users, nothing about any of these services seems all the compelling, at least in the sense that they are not opening their wallets to pay for them. I’ve been talking to non-music-business friends about Tidal for the Upward Spiral podcast, and most of them don’t even pay for music. They use the free tiers of Pandora and Spotify, and YouTube, and Songza. When I asked one of them what would compel her to pay for music, she replied “if it was part of Netflix, just another drop-down option on the menu.”
So what if it’s that simple? What if, instead of a streaming service being the “Netflix for music,” it was “Netflix and music?” All your entertainment content, all in one place, for a flat fee every month. Of all the people I talk to about not paying for music streaming, they all pay for Netflix, Hulu, or Amazon Prime.
There are a several reasons people are willing to pay for film and TV but not music. The “free options” for film and TV have never been great, and downloading films and TV shows from torrent sites has always been trickier technically than downloading music. Hulu offers a handful of free shows, but everything else lives behind a paywall — and as everyone who has a cable bill knows, even watching TV on an actual TV isn’t free. The content available on YouTube doesn’t generally have the same production quality as a film or TV — and while there are some great viral videos and webisodes out there, the producers of Games of Thrones aren’t exactly worried.
There are legions of free and decent sources for music — the aforementioned free tiers of Spotify and Pandora, 8tracks and Songza, YouTube and Soundcloud. Piracy has dropped in recent years as more alternatives have launched — but converting people from pirate to paying is hard, especially when there are good free alternatives in the middle.
Watching films and TV is also, for the most part, a lean-forward experience — when you’re watching TV, you’re either fully invested or using second screens in a secondary capacity (tweeting about the show during commercial breaks, for instance). Music, on the other hand, is now a lean-back experience, even if you’re consciously selecting tracks or making playlists. Music is an “in-addition;” you’re listening and chatting with friends, or running, or working.
So it would make total sense that music live in a service with other streaming entertainment. It has been tried before — Rdio launched Vdio, a film and TV site, in 2013, but the service never made it out of beta and died after six months. It’s early death can be traced to Rdio’s low overall numbers and the fact that the service mirrored the current iteration of iTunes more than Nextflix; it was a pay as you go model with fairly high prices to rent films and TV shows.
Amazon Prime arguably does this now, but they put very little effort into their streaming service. The catalog is limited, playlists seem to be curated by robots, and the overall user experience is clunky. Amazon certainly has the resources to build something better, but their attention seems to be focused elsewhere.
Which leaves two alternatives — Netflix merges with an existing player, or Apple goes in and burns everything down.
It makes perfect sense for the folks at Apple to break out the flamethrower. Right now, the iTunes experience is resoundingly average — it’s pay as you go downloads and rentals for films and TV, which is still OK in certain situations (watching on airplanes, staying up to date on current shows), but still feels old-fashioned. The product is oddly chopped up, with everything siloed — but what if they built a really beautiful player where you could cruise around and have everything in one place? Love the Fleetwood Mac sync from the Americans earlier this season? Here, stream Rumours, or buy tickets to their next show.
Apple could set one price for everything — all the music, film, and TV you want, in one well-designed place, all the time. They’d win the day. It would kill all the other streaming services, all the other video services, and maybe even take out the cable companies while they’re at it. This could be the end of Time Warner. Imagine that for a second. That ugly DVR box could be replaced by an Apple TV in every household in a few years.
Of course, Netflix and Spotify (or Tidal, or Deezer) could also merge and start something pretty excellent, especially if Apple drags their feet. And it wouldn’t be the worst thing in the world to have a little competition, if only to help keep prices down and provide alternatives.
The real takeaway here is that throwing exclusives or hi-def audio at people isn’t going to make them convert when there are so many good, free options out there. Plenty of folks at streaming music services have looked at Netflix’s numbers and wondered why they couldn’t come close, but that’s the wrong question. They can’t beat ‘em — maybe they should join them.