Spotify put up its prices in the US yesterday, which is always a nervy moment for a digital service. What if lots of its users ‘churn’ (cancel their subscriptions) as a result, especially if it’s now more expensive than direct rivals?
Any nerves within Spotify may have been eased by a new study from research firm Antenna, however.
“Spotify listeners are the least likely to cancel among the major video or audio streaming services in the US,”reported Bloombergin its writeup of the report. “Fewer than 1.5% of Spotify users did so during the month of April, and the company’s monthly churn rate has hovered around 2% all year.”
However, this isn’t just a positive Spotify trend. In fact, Antenna has found that churn between music-streaming services is about a quarter of that between video-streaming services.
That’s not a huge surprise: the key difference being that the music services all have the same catalogue: people don’t need to churn from one to another to listen to a particular new album or artist in the way that they do with video streaming.
Meanwhile, with such an emphasis on personalised recommendations and playlists, the longer people are with a music service, the greater the incentive to stay put rather than switch and start (algorithm-wise) with a blank sheet.
So, Spotify will be pleased with Antenna’s findings, especially as they show its churn rate is considerably better than rivals including Amazon Music and Apple Music.
However, they’re also encouraging for the wider music-streaming sector –and the industry whose conten…NO WAIT, whosemusicpowers it. Loyal subscribers are more likely to accept recurring price rises –within reason, of course, given that much of the world is still having a cost-of-living crisis.
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