Indie Music

US Music Industry Loses $1B Annually From Unauthorized Account Sharing

Industry analysts MusicWatch has been tracking paid streaming account sharing and the use of family plans for some time, and the results of last year’s survey point to lost revenue of more than $1 billion annually in the US alone.

In the quarter ending July of last year, MusicWatch estimates that 95 million people in the US used one of the major streaming services. Of those, 68 million were self-paying, 25 million had access through a family plan, 13 million were on a free trial and 11 million were “mooching” or sharing a log-in that was not from an authorized family plan.

Amoung paid subscribers who don’t use a family plan, one in every three shares their login with sharing most pervasive among Millennials with 44% aged 25-4 sharing their log-in.

In theory, those 10.7 million unauthorized users would be worth almost 1 billion ($995M) using an ARPU figure of $93.

30% of those unauthorized users say they would pay for access if they head to/ Assuming that they actually did, that would represent $298M in additional annual revenue.

“That translates to an incremental 6% of the calendar 2018 on-demand US subscription revenues (RIAA),” says MusicWatch. “Most of the remaining 70 percent would continue to stream, but switch to a free service, which at least supports ad-based revenues.”

Many think sharing is OK

Surprisingly, more than one in four self-payers strongly agree that it is okay to share their log-in so long as someone pays. When they share it’s with an average of 2.3 other users,” according to the survey.

Think about it this way: for every Spotify or Apple subscriber who shares there are 3 listeners on that account. “What we don’t know is whether it’s a lack of understanding about the ground rules, or that consumers simply don’t have any empathy for stakeholders,” concludes MusicWatch.

Key Takeaways

  • Many subscribers are illicitly sharing their music subscription log-ins
  • Stricter enforcement would likely lead to some conversion to new accounts, but most would revert to ad-supported options
  • There is an opportunity to improve consumer understanding of the ground rules
  • Artists and other rights holders need to help with messaging to overcome a lack of consumer understanding, and perhaps a lack of empathy, around account sharing

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