With a recession potentially looming, the debate about the £9.99 price point for streaming subscriptions is likely to be off the agenda for now.
While the £9.99 figure had increasingly been seen as overdue for an increase, that industry standard seems unlikely to be changed at a time when increasingly cautious consumers may be weighing up their monthly commitments.
Now That’s What I Call Music is well placed to shake up the market with its £4.99 service as a rival to Spotify, Apple Music, Amazon Music and Deezer.
“Choice is massively important,” said Alex McCloy, Now senior digital director. “I've got subscriptions to most of the major streaming services and I use them heavily; I’m one type of consumer. But when you look at the consumer that's got less disposable income or is spending less on music per year, it’s a big jump from £22 a year [spending on music] to £120 a year.
“Advanced services offer a lot of value for that price. The challenge for mid-tier services is getting that value proposition right. We've all seen the services that have been and gone – Bloom.fm, Blinkbox Music. We’ve passed the three-year test, which is great, because that seems to be just before when every mid-tier service has fallen down.”
Now That’s What I Call Music’s app is expanding its catalogue from 5,000 tracks to millions of songs.
“Trying to shape the value proposition at £4.99 takes a lot more thinking in terms of what you can give consumers versus what's too rich for the industry,” said McCloy. “So that probably the biggest challenge, getting that balance right, we're doing a lot of work. There are a lot of new features in the roadmap for the next four or five months.”
As well as a much bigger catalogue, the Now app is rolling out new personalisation features.
“The evolution of the product is going to accelerate quite fast, things like Alexa and the freemium [Now streaming service] are the start of this,” said McCloy. “Long term, I'd love to see us go into other markets, because that's where there's a lot of potential.”
The evolution of the product is going to accelerate quite fast
Alex McCloy
ERA has called for more innovation in the streaming subscription market, which is set to an all-you-can-eat default model. Amazon does offer a limited service to Prime members, alongside Amazon Music Unlimited.
Now Music bills its app as the UK’s only mid-tier mobile music streaming service.
“We're very much a chart music focused proposition,” said McCloy. “It's a really good way to stay up to date with the latest chart music, and making sure that consumers have the quickest journey to relevant music and relevant playlists is key.”
Now launched its free ad-funded tier in March, including all the Now compilations alongside radio functions.
“It’s just giving more choice to consumers,” said McCloy. “We have a lot of Now fans out there, but we want to make it as easy as possible for them to engage with the latest releases and access the Now playlists on the service. There are a lot of services in market, but we've seen some decent growth since we launched that. It seems to have had a really good response so far.”
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