Wildcard Wednesday . . .

SUBSCRIPTION VS. ADDRESSABLE LISTENING:  The competitive landscape for streaming audio has basically settled into two camps.  One business model is subscription-based, with listeners going behind a paywall in return for an ad-free experience and other product enhancements.  The other model is advertiser-supported streaming, which is free for listeners and makes them Addressable to marketers.  With those definitions in mind, which type of streaming are most listeners choosing?  There’s not a ton of research on that question, which makes the attached Business Wire link worth the read.  It features research from a third party called MusiComms.  According to their study the biggest chunk of listening is Totally Free at 52% – meaning listeners who don’t buy subscriptions, downloads, CDs, etc..  This includes broadcast radio listening at 29%, internet-based audio streaming (mostly Pandora) at 15%, and internet-based video sites (aka YouTube) at 7%.  In a separate question 40% of all respondents said they would never pay more than they currently do for music.  Interestingly, another 40% said they would be open to paying for a music subscription – which is considerably higher than the current industry estimates of 20-25%.  This research frames out an interesting tug of war between two very different ways to consume streaming music.  So who will win?  My educated guess is that Addressable free listening will always be the preferred way to listen, but Subscriptions will continue to rise.

THE (LITERAL) DOWNSIZING OF PHYSICAL MUSIC SALES:  With the continuing surge in streaming music consumption at the expense of physical album sales (remember CDs?), you have to assume that music industry orgs must also change with the times.  It looks like that’s starting to happen at one of the major Labels according to the attached RAIN link.  Warner Music Group has begun offering buyout packages to 130 employees who work on physical music production and distribution.  WMG’s plan is to use the savings from this workforce reduction to “realign resources” towards the digital side of the house.  While nobody ever wants to see anyone lose their jobs, this one feels like a fair and orderly way to move WMG’s workforce from a legacy physical business to a digital model.  I predict Sony and Universal will do the same thing sooner than later, since all of the Labels are going through the same streaming transformation.

THE NEW RETAIL WORLD ORDER:  Full finders credit on this last article to Pandora’s Retail Head of Industry John Gregory.  It’s about the state of Retail in 2018 as predicted by Steve Dennis, a well-known Retail consultant and category blogger.  Mr. Dennis has highlighted 13 insights to keep an eye on in 2018, as described in the attached Forbes link.  I particularly love the following points; #1 retail isn’t dead, boring retail is, #6 the rise of private labels thanks to digital price shopping, #7 digital first retail, and #8 the death of the middle as the market gravitates towards both luxury and economy.  Right now it’s so easy for worn out retailers and skeptical investors to just blame Amazon and give in to the idea that traditional Retail is dying.  But as this article proves, there are tangible ways to change the game and actually thrive in this new Retail world order.

Have a great Wednesday guys!

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