SEATTLE, WA (Hypebot) – Streaming music is growing even faster than we thought, according to a new U.S. study, and Amazon is the #1 choice for those who pay for streaming. That Amazon's music costs are bundled with shipping and other services could provide a hint as to how music streamers can gain more paid subscribers.
New research from Parks Associates shows that 66% of U.S. broadband households use a streaming audio service. Among all U.S. broadband households, 40% use a free service to stream audio, and 26% subscribe to a paid service.
Surprisingly, Amazon Prime Music is the top subscription music service among U.S. broadband households (10%), followed by Pandora One (6%), and Spotify Premium (4%).
"Consumers have shown plenty of interest in streaming audio and music services, but most consumers have opted for free accounts. Music service providers have built a model around converting free users into paying customers, but this strategy has not paid off so far," said Glenn Hower, Research Analyst for Parks Associates. "Streaming music providers will have to get creative with revenue streams if they hope to build sustainable businesses, whether through partnerships with broadband and mobile carriers or through premium service offerings streaming high-quality lossless audio."
Increasing usage of audio services will boost interest and adoption in connected audio devices and products, according to Parks Associates analysts.
"Advances in wireless streaming technology and a resurgence of interest in hi-resolution audio will stimulate consumer demand for Internet-connected audio devices," said Brad Russell, Research Analyst, Parks Associates. "Wireless speakers, multiroom audio systems, and soundbars constitute a growing home audio segment, which is offsetting declining sales in home theater and traditional audio components. Together, these three devices will generate $26 billion annually in global sales in 2020."