Verto Index: Streaming Music

This month’s Verto Index looks at top streaming music properties, from Apple Music to Slacker Radio, among U.S. adults (ages 18 and above). We thought this would be an ideal time to rank the most popular music streaming sites and apps, considering Spotify’s potential IPO, Pandora’s launch of a Premium subscription service, and Tidal’s second birthday.

When it comes to consumer behavior, streaming music properties differ from interaction with other types of content in one important aspect: much of the consumer time spent with streaming music properties actually occurs while the app or site is running in background mode (eg., a consumer spends a few minutes creating or selecting a playlist, which then plays in background mode for the next few hours as the consumer cycles through other apps and sites). With this in mind, our Index focuses on the number of sessions per user, per month as a better indicator of user engagement with a given streaming music property (in addition to our stickiness rating).

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Did On-Demand Kill the Radio Star?

Apple Music is the top music streaming service on our Index, with nearly 41 million monthly unique users reported in February (on mobile devices only). Even without taking PC audiences into account, it’s still the reigning music streaming service, with 20% more monthly unique users than Pandora (32.6 million monthly unique users) or Spotify (30.4 million monthly unique users).

Notably, all streaming music properties in the top three offer on-demand music playback and libraries, while streaming radio services are pushed further down in the rankings; iHeartRadio comes in at number four, with 28.5 million unique users, but the other radio streaming properties on our Index attract far smaller monthly user numbers.

Can Tidal Translate Stickiness into Success?

Verto Analytics’ stickiness rating (which compares daily users to monthly users) helps identify and quantify the most engaged users. And as we’ve seen in previous Verto Indexes, some of the stickiest properties are often those with the smallest audiences.

Streaming music services are no exception: the stickiest property on our Index is YouTube Music, which has a 35% stickiness rating but attracts just 2.5 million monthly users. And Tidal, the service best known for its association with Jay-Z (a co-owner) has a stickiness rating of 22% (tied with Amazon Music), but reported just 100,000 monthly users in February.

But these users racked up an average of 46 sessions per month; by comparison, Spotify (25% stickiness rating) users averaged 51 sessions per month. And while Spotify’s monthly user base is exponentially larger than Tidal, the latter is clearly cultivating a small but engaged user base. Even so, the service is reportedly struggling, despite a recent $200 million investment from Sprint. Can the partnership help translate a tiny engaged audience into a larger and more sustainable business model?

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Effective Mobile Apps are a Must for Digital Music Services

With the exception of Spotify, all the the stickiest properties on our Index attract a nearly entirely mobile-only audience. And when we look at the hourly share of music streaming services by device, it’s easy to see why: smartphones overwhelmingly dominate as the preferred device to listen to digital music, regardless of the time of day.

This effect is most profound in the early mornings and afternoons, but the overall message is clear. To engage the greatest number of listeners, an effective mobile app is a vital component to any streaming music service.

The Future of Streaming Music

The streaming music landscape is getting more competitive and more consolidated. Pandora acquired the remnants of Rdio in 2015, and SoundCloud (who just raised $70 million in debt financing) is consistently plagued with rumors of buyouts or acquisitions.

For streaming music services that offer on-demand music libraries, a vast catalog is no longer a selling point – it’s a given. Instead, streaming music properties will need to differentiate through seamless mobile-forward user experiences and  interfaces that encourage high numbers of user sessions and interactions in order to develop consumer loyalty – and a profitable business model.

Interested in our insights on consumer behavior and content consumption? Download a PDF of the Index. And for the latest updates, follow us on Twitter and LinkedIn.