Cloud not computing: the generation gap that’s proving a big problem for streaming

“The future of music consumption is streaming.” There’s a statement most readers would probably agree with, a fact, something that anyone, from expert observer to random fan, would probably find it hard to argue with.

And the figures do back it up, with streams accounting for more than 27 per cent of UK album sales in 2015, and 66 per cent when it comes to singles.

When a major artist releases a new work, it’s all about streaming first and foremost. Well, unless you’re Adele, with your £90 million fancy-schmancy record deal and you can afford to say no. Otherwise, the future is streaming.

But there’s always a “but”.

The wrinkle in all of this is the fact that not everyone is going gaga for streaming. A YouGov survey last week produced the interesting statistic that only 6 per cent of 35-55 year olds subscribe to a music streaming service.

As you’d expect, 16 per cent of 14-34 year olds have subscriptions, and only 3 per cent of those over 55 are signed up. Still, that Gen X figure sticks out a little. The reasons put forward for disliking streaming include complexity of existing services, the subscription angle, and the fact that CDs and radio are easier to use.

Tenner a month

When you parse the findings, cost is probably key: a regular subscription, usually pegged at €9.99 or $9.99 a month, adds up to more cash than mainstream music fans are prepared to spend on music in a year. People love music, but not so much that they will pay that much money for it.

Recent US surveys have also pointed to the high annual price point as a barrier for signing up to streaming subscriptions.

These findings will be dismissed by many, for several reasons. The future is about what millennials and Gen-Zers are going to do, and they are heading for streaming with gung-ho, even if many of them are just watching YouTube and not actually paying for anything. The industry will keep doing deals for exclusives with Bey and Drizzy, which will bring in subs.

Furthermore, the YouGov survey was conducted on behalf of a streaming service Electric Jukebox, which is aimed at those Gen-Xers. So it is probably in its interests to show up this finding.

Time to buy

But it’s worth noting that those 35- to 55-year-olds are the ones who grew up paying for music in the first place. They remember a time when the only way you could hear new music was by buying the CD or record or cassette to begin with. If they’re still leaning on CDs and radio to hear music – and if ownership rather than subscription is an issue – you’ve got a problem when the entire industry is beginning to pivot towards streaming. (I mean, where do people go to buy a CD these days? Do they still sell them in Tesco?)

If the 35+ fans are staying away from streaming and many of those under 35 prefer getting their free fix on YouTube rather than paying for Spotify or Deezer or Apple Music or Tidal, you can see some problems ahead in the short and medium term.

Getting fans to pay a tenner a month is the golden grail of the industry’s streaming play. But what if people refuse to do what they’re supposed to do in those business plans and the conversion rate drops?

You have to wonder if the industry has a plan B – and what exactly it is.