Hardware May Play Role in Bringing Older Consumers to Streaming Music, Says Report

Hardware could play a pivotal role in streaming music’s next phase of growth, blogged Futuresource Tuesday. With music streaming reaching mass adoption in numerous markets, its next frontier is to win over radio and casual listeners who have been slower to convert to streaming due to price, convenience and awareness, said analyst Alexandre Jornod. To awaken the “massive passive” market segment, a “seamless device” that replicates the accessibility and simplicity of radio will be an important part of the transition, Jornod said. Older consumers tend to own a smart speaker before a streaming subscription, he said, which highlights smart speakers as “a key driver of streaming subscriptions, especially in age groups with traditionally slower music streaming adoption.” That means Spotify, recently surpassed in listeners in the U.S. market by Apple, will continue to have to rely on partnerships with smart speaker makers to grow its listener base vs. competitors Amazon and Google, which add free versions of their music services to their Echo and Google Home smart speakers, said the analyst. Although Apple has HomePod, it has grown its streaming music business by making Apple Music the default streaming app on the iPhone: in the four markets where Apple Music is estimated to have over 3 million subscribers -- the U.S., U.K., Canada and Japan -- Apple has at least 30 percent of the smartphone market, Jornod noted. An estimated 50 million Echo speakers are in use, and a recent Futuresource survey indicated Echo owners are three times more likely to subscribe to Amazon Music Unlimited than other respondents: music is a core smart speaker activity and Amazon is able to upsell users directly on the device. Google, meanwhile, has been leveraging its Google Home devices and Pixel phones to snare YouTube Music subscribers by offering six free months of the service.