Warner Music CEO says streaming price increases are an important step
As audiences become increasingly frustrated with the increasing subscription prices of music streaming platforms, Warner Music CEO Robert Kyncl has emphasised the importance of price hikes and suggested that they’re likely to continue.
In the Warner Music Q2 2023 financial earnings call, via Digital Music News, Kyncl noted how pleased he was with price increases from platforms such as Spotify, stating: “Last month, Tidal, YouTube and Spotify all followed Apple, Amazon, and Deezer by upping their prices. This is the fiscally responsible thing to do for themselves and for the creative community. I’d like to thank them all for taking this important step.”
He continued to compare streaming prices throughout the years, adding, “Back in March, I said that if we adjusted for inflation since 2011, the year that music streaming was introduced in the United States, the price of a monthly music subscription in the U.S. should be $13.25. I’d like to point out that in 2011 the price of a standard Netflix plan was $7.99. It has since increased to $15.49 today.”
Kyncl suggested that the music industry should follow in this direction, explaining, “If the monthly price of a music subscription had gone up by the same proportion, it would have increased from $9.99 where it was in 2011 to $19.37 today.”
The CEO also highlighted the range and access of music platforms compared to film television, stating, “Let’s remember that music subscription services give you access to all the music ever released and a continuously growing library. For roughly the price of a single CD.”
He concluded, “You need to subscribe to three or four movie and TV services for toughly $45 a month to get anywhere near a comprehensive offering, so we see these initial price increases as an encouraging start.”
The CEO seemed confident that these increases would not drive away customers, adding, “There’s no evidence that the services are experiencing elevated levels of churn. We believe the market will bear further price increases in the future, and we’re expecting that they’ll arrive on a more regular cadence than the past.”
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