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The Price of Music Is Too High

The Price of Music Re code


At the 1999 peak of the recorded music market, about $40 billion of recorded music was sold. How much did the average consumer spend per year on recorded music? Hundreds of dollars? Nope. At the time, according to the music trade group International Federation for the Phonographic Industry, across the total 18-and-over population (both across many countries or individually within one), the average amount spent came to $28 per consumer.

But that includes people who did not buy any music that year. If we look at just the consumers who bought music, they spent $64 on average that year. And that was at a time when one had to buy a bundle of 12 songs in the form of a CD in order to get access to just one or two. What has happened since?

Once the bundle broke, the average spending per consumer decreased.

So, the data tells us that consumers are willing to spend somewhere around $45–$65 per year on music, and that the larger a service gets, the lower in that range the number becomes. And these numbers have remained consistent regardless of music format, from CD to download.

Curiously, the on-demand subscription music services like Spotify, Deezer, Rdio and Beats Music are all priced the same at more than twice consumer spending on music. They largely land at $120 per year

Stashed in: Business Facts, Music, Monetization, Consumers, Retail

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