Warner Music CEO Steve Cooper has warned average revenue per user (ARPU) from streaming services must start rising again.
While global streaming subscriber numbers have been rising across the globe, with around 200 million now signed up, the ARPU stats have been falling on most services. Global market leader Spotify saw its ARPU fall 6% year-on-year in Q3 to $4.73, although the rate of decline has slowed.
Music Week predicted back in October that streaming inflation could soon be back on the agenda and now Cooper wants to see those ARPU figures moving upwards. That could have an impact on some family plans, which allow up to six users on one £14.99 subscription.
“For artists, songwriters, labels and publishers, profitable subscriber growth is only one objective,” he said, speaking on the earnings call where WMG announced soaring revenue growth. “One metric that we'd like to see greater focus on is average revenue per user. The main drivers responsible for falling ARPU are family plans and meaningfully lower price points in emerging markets. We will be working with our subscription partners to address this concerning trend.”
Some western markets have already reached streaming saturation point, and Cooper said even Warner companies in traditionally physical markets such as Germany and France saw streaming become their biggest source of income during the first half of 2018. But he said there was still plenty of room to grow globally.
“We remain very focused on ways to turbocharge the industry's recent growth period,” he said. “With over 200 million paying customers globally, subscription streaming now has a firm economic foundation. That being said, the 200 million subscribers only represent around 3% of the world's population. There's plenty of room for long-term growth in emerging and established markets.”
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