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ARCHIVE 2006
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Lower Prices for Music Subscription Services Key to
Adoption
Portable music subscription services will have to drop below $10 per
month to attract a significant number of MP3 player owners, according to
Parks Associates’ upcoming report
Digital
Music and Portable MP3 Players.
The report, which includes data from Parks Associates’ multinational
consumer study
Global
Digital Living™, finds that 41% of MP3 player owners in the U.S.
are not willing to spend more than $10 per month for a music service
subscription. With comparable service costs presented in local currencies,
62% in the U.K. cap their interest at this amount, with 49% in France, 52%
in Germany, and 56% in China expressing similar price inhibitions.
Furthermore, on average, one-third of the MP3 player owners across these
five nations believe these music services should be free.
Given these findings, the entry of low-cost services such as Yahoo!
Music could reshape the marketplace. Currently in the U.S., portable music
subscriptions from companies including Napster or Rhapsody cost $14.95 per
month.
“Companies like Yahoo! can afford to keep the price low because they
have other revenue streams to subsidize their music services,” said
Harry
Wang, research analyst at Parks Associates. “Pure-plays like
Napster may not be able to lower their prices, but to counter low-cost
competition, they can ally with telecom service providers or other
broadband carriers to make their music services part of a bundled package.
Napster’s recent partnership with Bell South is a positive move in this
direction.”
On a global scale, music service providers need to be cautious when
expanding across nations because consumers’ price expectations vary from
country to country. For instance, MP3 player owners in the U.K. and
Germany are more price sensitive than owners in France and the U.S.
Companies should always keep such differences in mind when formulating
their entry strategies, especially subscription costs, for a particular
region, Wang said.
Digital Music and Portable MP3 Players analyzes the current market
landscape for digital music and MP3 players, focusing on trends in music
services and hardware among evolving technologies and shifting market
dynamics. The report also features survey data regarding ownership and
usage of MP3 players as well as consumer attitudes toward music services.
The
Global
Digital Living™ project is a study of worldwide consumer
technology trends and surveyed Internet households in thirteen nations:
France, Italy, Spain, Germany, Canada, Taiwan, Japan, India, China, South
Korea, Australia, the United Kingdom, and the United States.
For additional information on
Digital
Music and Portable MP3 Players or
Global
Digital Living™, visit
http://www.parksassociates.com or contact 972-490-1113 or
sales@parksassociates.com.
About Parks Associates: Parks Associates is an
internationally recognized market research and consulting company specializing
in emerging consumer technology products and services. Founded in 1986, Parks
Associates creates research capital for companies ranging from Fortune 500 to
small start-ups through market reports, primary studies, consumer research,
custom research, workshops, executive conferences, and annual service
subscriptions.
The company's expertise includes new media, digital
entertainment and gaming, home networks, Internet and television services,
digital health, mobile applications and services, consumer electronics, and home
control systems and security.
Each year, Parks Associates co-hosts executive thought
leadership conferences CONNECTIONS™ and CONNECTIONS™ Europe in
partnership with the Consumer Electronics Association (CEA®). In addition, Parks
Associates produces the online publication Industry Insights in
conjunction with the CONNECTIONS™ Conference series.
http://www.parksassociates.com |
http://www.connectionsconference.com |
http://www.connectionseurope.com
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http://www.connectionsindustryinsights.com
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