Do you have quality audio content but still unable to secure a profitable revenue from your music streaming platform? Are you completely at wit’s end to devise new strategies for the purpose?
Fear not! We are here to help you.
Our OTT experts have devised that perfect plan for you to fill your pockets without having to wrack your brains.
So, as you can see, the music streaming industry is booming and as an owner of an audio streaming platform, you too can enter the race and reach the heights of, say, Spotify or Pandora. Sounds exciting, doesn’t it?
With our years of experience in helping to launch and grow OTT platforms, Muvi has come up with some useful tips on how you can monetize your music streaming platform.
1. Try the freemium model
A freemium model is designed to give a particular service free of cost to the consumers. It is the first step towards building a relationship with them.
By incorporating the freemium model in your audio streaming business, you can offer your users with a lot of free music initially while reserving exclusive content for a premium service at a higher cost, later.
Take the example of music streaming giant Spotify which launched its freemium service to provide access to 50 million free tacks to its users. But, here’s the catch – Spotify’s freemium service isn’t entirely free – it is ad-supported.
So, users get to listen to songs while listening to some ads in between the tracks.
So, a freemium model may be free for your users but ads get you a lump sum amount of money. We will be explaining this point elaborately, later.
For now, let’s look into how a freemium model will lead to an increase in revenue.
Incorporating the freemium model will lure more people into your audio platform because they could stream multiple tracks at completely no cost whatsoever!
These people become your freemium subscribers – subscribers who are currently active users of your platform providing zero revenue for now but have great potential to become paid subscribers at a later stage.
The equation is simple – more freemium subscribers lead to chances of acquiring more paid subscribers which eventually leads to an increase in revenue.
2. Making money through ads
Incorporating advertisements in your music streaming platform can open a whole new vista to gain revenue. There are two ways you can do this- by playing in-content ads and through display ads. Here’s how.
Let’s start with in-content ad streaming. In in-content ad streaming, short audio ads are played during ad breaks in between streaming songs.
So, if you have more freemium subscribers on your music streaming platform, the higher will be the chances of them streaming music. The more they stream, the more these in-content ads come up. In this way, more impressions are created. More the impressions, the more money you get from advertisements.
More subscribers = more streaming = more ad impressions = more money
Similarly, display ads also add up to the total revenue. They are ads that exist on the home page of your music streaming website or app.
When your users click on them or take any action through them, you get paid. So the more people visit your platform, the more are their chances of clicking them. And more clicks lead to more revenue.
While this strategy may come across as a no-brainer, many audio streaming services are getting attractive yearly revenue based only on ads.
Spotify targets its listeners with a variety of advertisement models including in-content audio ads that are played at an interval of 15 minutes between songs. By following this model, the audio streaming giant generated an ad-supported revenue of $165 million at the end of the 2nd quarter in 2019.
You can build your audio streaming platform through Muvi which uses third-party ad-servers that accurately deliver ads to your users based on their streaming preferences, be it in-content or display ads.
3. Introduce paid subscriptions
So, now that you have enough freemium subscribers who are thoroughly enjoying the whole audio streaming experience your platform is providing, it’s time to get into real business. It’s now time to convert your freemium subscribers to paid ones.
Compel your free subscribers to ditch the free ad-supported plan and upgrade to the premium ad-free plan for a minimal cost, say $9 per month. There are millions of listeners out there who would love to pay for uninterrupted music streaming.
Devise multiple price plans to target different audiences- students, families, etc so that different people can choose their plans effectively based on their priorities.
Spotify’s student plan and family plan are priced at $4.99 and $14.99 respectively per month.
Incorporate attractive features in the premium plan like high audio quality streaming, track download, shuffle play, unlimited skips and so on that would lure customers to ditch the free version and enter the paid subscription plan.
You will be surprised to know that the success of your audio streaming service can be solely attributed to the revenue generated from paid subscriptions.
IFPI reports that there are a total of 255 million paid audio streaming service users around the world at the end of 2018, which amounts to 37 percent of recorded music revenue.
A massive chunk of the revenue belonged to paid subscriptions which amounted to 32.9% of the global revenue.
So, your thought of no one willing to pay monthly subscriptions for listening to music goes out of the window. In fact, there are more paid music streaming subscribers worldwide than freemium users.
Spotify has 232 million listeners out of which 108 million are paying subscribers. The annual subscription revenue of the streaming giant stood at $1.5 billion as of June 2019.
4. Be available in multiple platforms
Your music streaming service should be available on every platform – be it mobile, smart TV, desktop or gaming consoles – only then will your service reach out to maximum users.
The more people start discovering your service on their preferred platforms, the more their chances of subscriptions increase. And more subscriptions = more money.
There are many audio streaming services that are accessible only on the web or maybe on one or two mobile applications like iOS and Android. But they miss out on the large chunk of audience who are dedicated users of smart TVs, gaming consoles or speakers.
Take the example of Spotify. What makes it so popular?
Spotify is available on practically all devices like desktop, smart TV, mobiles, tablets and laptops, gaming consoles and speakers running across iOS, Android, web, Windows and macOS.
Choose Muvi as we will help you launch your own branded music streaming service across multiple platforms like web, mobile, smart TVs and gaming console.
With almost half of the recorded music revenue coming from the audio streaming sector, streaming music sure has a lot of potential to grow and outperform itself in the years to come. Looking at the constant rise in recorded music revenue for the fourth year in a row, amounting to $19.1 billion in 2018, music streaming is here to stay.
Not limited to the above-mentioned money-making strategies, you too can devise innovative ideas to boost your sales revenue.
Sign up for a 14-day free trial with Muvi now to witness a steady flow of revenue from your audio streaming business!