amassing new subscribers remains
essential for growth. Netflix’s price
hikes have outpaced inflation without
sacrificing growth; though increas-
es get complaints from customers,
Netflix has grown global subscriptions
to 140 million compared with Spotify’s
108 million.
Even though labels have softly
pushed for more revenue per user,
according to sources, today’s streaming
services are priced for customer ac-
quisition. At Spotify, Apple Music, You-
Tube Music, Napster and SoundCloud,
the single, standalone, unbundled
subscription account costs the same
$9.99 per month. Ever the
low-price leader, Amazon’s
basic service costs $7.99. A
$5 student price is stan-
dard, while the $15 family
plan can host up to six
accounts and result in an
average revenue of $2.50.
Instead, streaming
services compete mostly on
features they don’t charge
extra for. Last year, Spotify CFO Barry
McCarthy admitted as much by saying
“the company will invest in growth at
the expense of operating profit.” Since
its 2011 U.S. launch, Spotify’s baseline
price hasn’t changed even though
the product has undergone radical
improvements in features, editorial
and user interface. Among the bigger
successes is Spotify’s Discover Weekly
playlist, launched in 2016. This year,
Spotify has a potential win with a pre-
save feature that adds a song or album
to a user’s catalog upon its release. For
its part, Apple has turned Beats 1 into
a popular, global live radio station in
an on-demand era.
The cellphone business could act as
a road map once the music business
runs out of potential subscribers. In its
formative years, cell companies raced
for growth and market share rather
than profit. Through mergers and
acquisitions, they grew and made costs
more manageable. When the market
started to saturate, they segmented
markets to improve retention — a key
industry metric, because keeping a
customer is far more expensive than
gaining one. By the mid-2000s, cellular
customers could choose between fam-
ily plans, low-cost prepaid calling and
a range of data limits. Later, mobile
plans would be packaged with broad-
band, cable and satellite TV services.
In April, Verizon began offering sup-
plements to existing family plans that
allow parents control over if and how
their children may use various aspects
of their smartphones.
Prices need not drop to
drive subscriber growth.
“If a price drops to $5.99
you’d be disappointed” in
incremental subscribers,
says Crupnick, whose
research shows sub-
scribers value features
over price. Other than
Amazon, Tidal is the only
mainstream subscription service
to offer both a standard plan and a
higher-priced option for HD audio.
France-based Qobuz targets more
affluent audiophiles with $15 and $20
options. High-res audio files carry
higher storage and bandwidth costs,
but prospective Qobuz customers
will pay extra — textbook marketing.
A survey of free and paid Spotify
users prior to its April 2018 initial
public offering found the 26-35 and
36-45 age groups were willing to pay
about $9 per month. Although fewer
in number, the 46-55 and over-55
demos would pay $12.55 and $13.05,
respectively. “Labels welcomed us as
proof there could be a subscription
audio service that costs more,” says
Dan Mackta, managing director of
Qobuz USA. “They’d like us to suc-
ceed to prove this business doesn’t
have to be a race to the bottom.”
Ric Ocasek
1944-2019
BY ALAN LIGHT
120M
POTENTIAL MUSIC
STREAMING
SUBSCRIBERS,
ACCORDING TO
MUSICWATCH
64 BILLBOARD • SEPTEMBER 21, 2019
T
HE MUSIC THAT RIC OCASEK MADE AS THE SINGER,
guitarist and primary songwriter with The Cars is generally filed
under new wave, but it was really a category unto itself. The
band, which has sold 15 million copies of its catalog in the United
States, according to Nielsen Music, was futuristic yet traditional, visionary
yet widely appealing, forged from elements of punk, pop, glam, art and
straight-up FM radio rock — even rockabilly. When Ocasek died Sept. 15
at age 75, the outpouring of grief from artists across the musical spectrum
— Tim McGraw to Ice-T, Alice Cooper to Beck — was a reminder of the
band’s rare and universal appeal.
The Killers frontman Brandon Flowers noted when he inducted The
Cars into the Rock & Roll Hall of Fame in 2018 that they “existed in the
highly coveted sweet spot where credibility and acclaim meets huge com-
mercial success.” The group scored 13 top 40 hits in nine years and landed
five top 10 albums on the Billboard 200 while injecting a healthy dose of
weirdness into the mainstream, bringing synthesizers, ironic detachment
and surreal imagery to the heart of classic rock.
Born Richard Otcasek in Baltimore, the musician and his family moved to
Cleveland when he was 16. There he met future Cars bassist Benjamin Orr
in 1965; they played in various bands together before relocating to Boston in
the early 1970s. After struggling as a folk-rock group called Milkwood, they
gradually added keyboardist Greg Hawkes and guitarist Elliot Easton, then
finalized The Cars’ lineup with drummer David Robinson in 1976.
Their demo tape reached the national charts before they were even
signed, purely on the basis of local airplay on Boston’s WBCN and WCOZ.
The Cars’ self-titled 1978 introductory set is widely considered one of the
finest debut albums of all time, a pure distillation of their vision that sold
over 6 million copies.
The success of The Cars and 1979’s Candy-O were equaled a few years
later when the band’s arty sensibility and postmodern visual style proved a
perfect match for the early days of MTV. The video for “You Might Think,”
from the four-times platinum Heartbeat City, won video of the year at the
first Video Music Awards in 1984 over Michael Jackson’s “Thriller.”
After The Cars broke up in 1988, Ocasek released seven underrated
solo albums; the single “Emotion in Motion” was a No. 1 Mainstream
Rock hit in 1986. Even at the height of the band’s popularity, he produced
albums and sessions for numerous alternative acts, including Bad Brains,
Guided by Voices, Hole, Suicide and No Doubt. In 2003, he took an A&R
job with Elektra Records, but stayed less than a year.
As a producer, his longest creative relationship was with Weezer, for
which he produced the Blue and Green Albums and 2014’s Everything Will
Be Alright in the End. “Ric was so kind to us and never faltered or changed
a thing, either personally or professionally, in the three different decades
we worked with him,” the band said in a statement.
Ocasek was married three times and had six sons. In 2018, Paulina
Porizkova, his wife since 1989, announced that the couple had amicably
separated a year earlier.
Ocasek exuded icy rock star cool, yet was an unexpectedly approach-
able figure at the showings of his visual art that occupied much of his final
years. “Success to me,” he once said, “is being able to write songs and like
them when I finish them.”
22.4B
0.6%
TOTAL ON-DEMAND
STREAMS WEEK
OVER WEEK
Number of audio and video on-
demand streams for the week
ending Sept. 12.
775.3B
32.2%
TOTAL ON-DEMAND
STREAMS YEAR OVER
YEAR TO DATE
Number of audio and video
streams for 2019 so far over the
same period in 2018.
13.13M
1.0%
ALBUM CONSUMPTION
UNITS WEEK OVER WEEK
Album sales plus track-
equivalent albums plus audio
streaming-equivalent albums for
the week ending Sept. 12.
MARKET WATCH
Ocasek
in 1988.
● JAKE OWEN signed a worldwide publishing deal with Warner Chappell Music. ● Sony Music Nashville promoted TAYLOR LINDSEY, who signed MAREN MORRIS, to senior vp A&R.
PATSY^LYNCH/MEDIAPUNCH/SHUTTERSTOCK