What do you pay for all you can eat? Pricing practices and strategies in streaming media services

ABSTRACT

The role that prices play for streaming media services is yet to be comprehensively and comparatively analysed with an international outlook. In this paper, we present results on music and video streaming prices, based on analysis of a data set of prices and information on pricing models and price developments. The data set spans 2008 to 2019, five streaming services, and nine countries across four continents. We provide comparative overviews of real prices and developments over the years studied and purchasing power-adjusted pricing across countries, as well as country-by-country assessments. Finally, our results show significant divergences in the pricing practices and strategies of Spotify and Netflix. The access-based pricing structure of streaming comes forth as highly contingent on demand-side factors and competitive structures.

KEYWORDS:

• Streaming
• price
• access-based pricing
• Spotify
• Netflix

Acknowledgments

We wish to thank the members of the STREAM, MUSEC and MASHED Projects at the University of Oslo for their feedback and input into this paper. We also thank the anonymous reviewers for critical and constructive feedback. This work was supported by the Norwegian Research Council under Grants numbers 263076, 262762 and 275441.

Disclosure statement

No potential conflict of interest was reported by the author(s).

Notes

1. Apple’s streaming service for music, not included in our sample, is another example of a service which is arguably an add-on to the hardware side of the business (cf. Colbjørnsen, 2020).

2. https://support.spotify.com/us/using_spotify/the_basics/full-list-of-territories-where-spotify-is-available/

3. Precise user numbers are hard to come by in Tidal’s case. The company only rarely releases numbers or statistics. Also, information from Tidal should be examined with a critical eye, as the company is accused of data fraud (Keslassy, 2020). Country availability: https://support.tidal.com/hc/en-us/articles/202453191-TIDAL-Where-We-re-Available

4. https://support.google.com/youtube/answer/6,307,365?hl = en#zippy = %2Cpremium-memberships-available-locations

5. This article does not cover services that are sometimes referred to as streaming services, but lack on-demand and time-shifting functionalities, such as live online transmission of particular events (e.g. gaming sequences, sports and awards shows), often referred to as live streaming.

6. To access webpages in countries outside of Norway, the NordVPN tool was used. This enabled us to get pricing information in the local currency. NordVPN was used for all countries except Norway.

7. A different data collection strategy could be to harvest prices in real-time, but our project timeframe did not allow for such a strategy.

8. https://databank.worldbank.org/reports.aspx?source = 1179&series = DPANUSLCU#

9. https://www.imf.org/external/datamapper/PPPEX@WEO/OEMDC/ADVEC/WEOWORLD

10. https://databank.worldbank.org/reports.aspx?Code = FP.CPI.TOTL.ZG&id = 1ff4a498&report_name = Popular-Indicators&populartype = series&ispopular = y

11. While prices for digital book streaming were excluded from this paper, we noted that the digital book streaming service Storytel charged a significant premium above other services we studied.

12. In this article, we present prices for HBO’s standalone streaming service (separate from their cable service) which has different names across the world, including HBO Now in the United States, HBO Go in Latin American countries such as Mexico and HBO Nordic in Nordic countries such as Sweden and Norway. We note HBO Max launched in the United States, operating in parallel with existing HBO services while offering a wider range of content at the same price point. See https://deadline.com/2019/10/hbo-max-pricing-launch-date-1202771551/. HBO has announced plans to launch HBO Max in 190 countries, including European and Latin American countries in the second of 2021. See https://www.prnewswire.com/news-releases/web-summit-hbo-max-to-expand-into-latin-america-and-europe-by-the-second-half-of-2021-301185785.html

13. HBO also offers a separate online streaming service tied to its offline subscription service in some markets.

14. While we have not systematically collected data for other music streaming services than Spotify and Tidal, we note here that the tendency towards converging prices is likely to be found across multiple music providers. Apple Music is currently at $10 per month in the US, pretty much identical to Tidal’s, Spotify’s and Deezer’s $9.99 per month subscription prices. Divergences may occur, however, particularly in countries where a service is introduced according to specific market conditions.

15. Values can range from −1 to 1. A coefficient of 1 indicates perfect positive correlation; for example, if one service price increased by 10%, the other price also increased by 10%. A coefficient of −1 indicates perfect negative correlation; a 10% increase in one service price corresponds with a 10% decrease in the other. A coefficient of 0 indicates no correlation whatsoever.

16. https://media.netflix.com/en/press-releases/netflix-launches-mobile-plan-for-india.

17. See McKinsey Global Institute (2019), Digital India, p.37 at https://www.mckinsey.com/~/media/McKinsey/Business%20Functions/McKinsey%20Digital/Our%20Insights/Digital%20India%20Technology%20to%20transform%20a%20connected%20nation/MGI-Digital-India-Report-April-2019.pdf

18. See https://musically.com/2020/12/16/spotify-india-launches-cheaper-premium-mini-subscription/

19. https://global-internet-tv.com/

20. https://www.aph.gov.au/parliamentary_business/committees/house_of_representatives_committees?url=ic/itpricing/report.htm

Additional information

Funding

This work was supported by the Norwegian Research Council [grant numbers 263076, 275441 and 262762].

Notes on contributors

Terje Colbjørnsen

Terje Colbjørnsen is Associate Professor at Oslo Metropolitan University where he teaches library and information science. He has worked mainly on issues regarding digitalisation of the media industries, in particular the book industry. Colbjørnsen has published a number of articles and book chapters on subjects such as freedom of expression, cultural policy, cultural industries, media strategy and media economics, digitalisation, algorithms and media technology. His current project looks at streaming as technology, business model and practice across the music, film, television and book industries.

Alan Hui

Alan Hui is a postdoctoral fellow at the RITMO Centre for Interdisciplinary Studies in Rhythm, Time and Motion, at the University of Oslo, Norway. His research with the MASHED project, led by Associate Professor Ragnhild Brøvig-Hanssen, considers how music platforms and copyright laws—particularly in North American and European legal contexts—regulate mashups. His PhD thesis 99 problems but a riff ain’t one (Australian National University) explored how copyright law and music sampling conflict but can coexist. He is an active musician, particularly in improvised theatre.

Benedikte Solstad

Benedikte Solstad has a master’s degree in Media Science from the Department of Media and Communication at the University of Oslo. She worked as a research assistant in the research project Streaming of the cultural industries (STREAM), and currently works as a media analyst at the Norwegian Broadcasting Corporation (NRK). Solstad’s research interests focus on the relationship between human and technology, as well as communication, digitalisation, and information technology.