Beats Music reportedly turned more than 70% of listeners who tried its music service on AT&T’s free 30-day trial to paying subscribers. In the context of a $100 or so phone bill, an extra $10 kicked in for a music service also doesn’t appear extravagant. But they’re already in the habit of paying their cellular bills. Having a sales person introduce people to the concept and answer questions will go a long way towards spreading the word.Ĭonsumers hate to pony up their credit cards for new services, especially those they haven’t tried before - even if it’s just $10 a month for unlimited access to millions of songs. Though Rdio and Rhapsody are old hat to readers of this column, most people still don’t understand how these services work, or even how they are different from Pandora, which is free. According to the Recording Industry Association of America, only 6.1 million Americans subscribed to an on-demand music service in 2013, less than 2% of the U.S. Those employees can be critical to introducing new customers to streaming music, which continues to have a low penetration rate in the U.S. Each is staffed with employees who sell phones and services. AT&T alone has 2,200 company-owned stores. Major carriers have thousands of stores from California to Connecticut. That exposure alone was worth millions of dollars. A great example of this are the AT&T ads that appeared during this year’s Super Bowl that feature Beats Music. Carriers, on the other hand, have healthier budgets for marketing and can easily “co-market” their services with a partner without significant increases in their expenses. Streaming music services run on thin margins because their costs to license music generally eats up more than half their revenue, leaving little left over to run the service, much less spend money on advertising. Why are music services in such a hurry to dosey doe with carriers? Here are five potential reasons. Spotify, Sprint Plan Music Bundle To Be Unveiled This Month
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