So the author says they are, up to a point, and assuming they get significant penetration. But it's based on an average listening rate of 2.5 hours a day, which is apparently what an average american teenager listens to. I'd have thought the average american teenager probably has the highest music listening rate of any demographic. I know my own usage would be closer to an hour on the days I queue up music, but that would be only every other day at best.
If that is closer to the average listening habits, then the royalty per stream calculations end up over 5x more profitable and above the magical 1 penny/play mark.
Not necessarily. I'm a programmer (not a teenager anymore), and I listen to music almost all the time while working, which is definitely more than 2.5h per day. Of course I might be an outlier, but as streaming gets more popular and easier to use, more people would listen to it in the background, like radio.
Thats what I thought of, but then I looked up average radio listening hours, and they seemed to be about 0.2 hours per person (UK figures). So I think you may still be an outlier.
Yes, but, radio listening hours? Probably the under-30 demographic only listens to the radio under duress. My knowledge of this is anecdotal only, but other than w/r/t exceptional cases (NPR, highly curated college stations), there's perceived generally to be near zero incentive to listen to the radio by everyone in my peer group or behind my peer group in generational terms (I'm thirty). On the other hand, those same people seem more or less wedded to other forms of consumption (digital music players, pandora, etc). Listening when exercising, listening in the car, listening when appropriate at work, listening while cooking dinner, listening during coitus, etc. etc.
Yes I would expect a long tail of listeners, imagine I am at less than an hour mostly. To some extent this will just affect penetration though, as the light listeners will not pay $10. In principle you could sell them cheaper capped play subscription though.
On the other hand, he counts 2.5 hours per household. Although Spotify does not allow for simultaneous plays using one account, more than one person in a household may use one account.
Also, the article assumes the premium subscription rate, but probably very many users have the 'Unlimited' subscription. So, although the average is probably lower than 2.5 hours, the average subscription price is also.
If that is closer to the average listening habits, then the royalty per stream calculations end up over 5x more profitable and above the magical 1 penny/play mark.