Coincidentally, Amazon will increase the prices of the two main packages, Amazon Music Unlimited personal plan and single-device plan, by $1 (or the corresponding local currency unit) in the United States, the United Kingdom, Canada and other markets from May 5; June , Apple Music also raised prices for the first time since 2015, raising its student subscription plan Number List by $1 (or the corresponding local currency unit).
Let’s make a bold prediction. Will domestic music platforms such as Tencent Music and NetEase Cloud Music follow suit? And after the price increase, will it hit the willingness of users to pay, and then affect the scale of paid revenue? These are what we are curious about.
1. The price increase experiment of "Spotify"
Generally speaking, the current revenue sources of the music industry are advertising revenue and paid revenue. Among them, advertising revenue depends on the scale of users, and the platform sells user traffic to brand owners to obtain advertising fees; while paid revenue depends on the scale of payment and ARPPU (Average Revenue Per Paying User, average revenue per paying user), that is, users directly Pay for content.
As the user dividends of the global mobile Internet are exhausted, whether it is Spotify, QQ Music, Kugou Music, Kuwo Music, NetEase Cloud Music, the monthly active scale of each company is basically stable . In the context of unable to grow rapidly, increasing ARPPU, that is, increasing prices, is the most effective in stimulating revenue.
The platform naturally understands such a simple truth, and there have indeed been some small-scale price increase experiments.