The streaming era of today has exacerbated a new era for the music industry as well through fan connectivity to each artist. Further, the accessibility of music anywhere in the world has led consumers to crave more music than ever before as social media is constantly notifying consumers of new releases from their favorite artist. This new era of digitalization in the music industry that has been developing into the norm that it is today has created a completely different approach to monetization of one’s music as well as one’s intellectual property.
Digital platforms and streaming services such as Apple Music and Spotify have allowed music enthusiasts from all over the world to discover and enjoy a diverse range of artists and genres. Through streaming platforms, consumers can access their favorite artists and music genres without having to pay one unit cost. For instance, streaming services offer a variety of different account and membership types that allow individuals to choose the option that is best for their listening preferences. International pricing strategies made by each streaming service has enabled artists and their respective labels to create efficiencies in the music industry through the optimization of artist reach through deals with streaming platforms. Through said deals, artists can send messages to fans around the world highlighting their latest music as well as any accompanying merch. Before the reach of streaming platforms, artists were constrained to advertising the latest content to their home market first as opposed to everyone all at once.
International pricing recognizes the unique challenges and opportunities presented by different music markets around the world. Each market has its own economic, cultural, and legal considerations that can impact pricing decisions. For example, emerging markets with lower disposable incomes may require lower price points to encourage adoption, while developed markets might sustain higher prices due to greater purchasing power. By understanding these nuances, artists and labels can navigate diverse markets effectively and tailor pricing strategies accordingly.
The value of music and the eventual pricing of memberships faces the challenge of constant piracy and illegal streaming of artists. Although illegal streaming services are common today, it is still vital to protect the artist’s work as leaked music could diminish the value of the streaming sector. Therefore, it is vital for music streaming services to incentivize consumers to choose legal methods for accessing music to protect the value of the content as well as the value added by the streaming platform.
A major challenge facing the music industry through pricing is the disparity of pricing across regions both locally and abroad. These disparities occur mostly through live shows and concerts that may cater to individuals with a higher amount of disposable income to spend on such events. This issue moves beyond the streaming platforms and to the artist, who will determine which fans are able to attend their concerts. From an economic point of view, it is vital for competition to make prices competitive, but the music industry is different than that of goods and services, so the cost of concert tickets is more subjective than objective.
The State of the Music Industry in 2020 | Toptal®
IFPI 2020 Report Reveals 7.4% Global Music Industry Growth (digitalmusicnews.com)