Nielsen Music’s study revealed people spend $156 annually on music, with streaming music accounting for only nine percent. That small percentage roughly equals $14. As low as that is, it’s actually an improvement. Last year, the average person spent $153 on music, with six percent — a little more than $9 — being allocated to streaming music.
The most glaring reason for why people are paying so little for streaming music is because there is so much free music to stream. Nielsen’s study found 45 percent of consumers prefer to stream music for free, compared to the 29 percent of consumers that have a music streaming subscription. Nearly half of those who said they do not have a music subscription said they didn’t because that option is too expensive. Nielsen conducted this survey in August with 3,000 consumers over the age of 13.
Spotify is one of the biggest entities keeping the average music spending price down. There are roughly 90 million people using Spotify for free each month, around the same number of people paying to use Apple Music, Tidal, and Spotify, combined. Pandora, one of the most popular sources for streaming music for free, launched an on-demand subscription service in March. The new service only attracted 390,000 subscribers in the first four months, a far cry from the millions that use its free radio service.
Pandora’s introduction of a subscription tier is part of a larger shift away from offering free tiers. Apple Music and Tidal both debuted in 2015 with free trials that are still offered but without a dedicated free option. Apple Music offers its Beats One radio service for free but is adamant that giving away free music on streaming services is bad. “I’ve put my money where my mouth is: Beats Music didn’t have a free tier. Apple Music doesn’t have a free tier,” Apple Music’s Jimmy Iovine said during an interview with Music Business Worldwide in May. “I think what’s going on [with free music] is wrong. I just do.”
