Will consumers buy into “light” music subscriptions? (RESEARCH)

With Pandora and iHeartRadio exploring mid-priced music services (both named “Plus” and priced identically at $4.99/month, with similar features), the question of consumer uptake arises. Will music lovers buy into semi-interactive services that cost half as much as fully on-demand music platforms? Key features of the Pandora and iHeartRadio plans are unlimited skips and song replays.

russ crupnick 200w

Russ Crupnick, Managing Partner, MusicWatch

RAIN News received a note from Russ Crupnick, Managing Partner of research firm MusicWatch, with a preview of consumer survey results which focus exactly on this question, as it pertains to iHeartRadio Plus. The upshot is positive, but not definite, as reflected in the note’s winking title: Will iHeart’s Audience Pay? You bet, maybe!

First: Size of Audience

First, MusicWatch sought to determine iHeartRadio’s listening audience. The number is obscured by iHeart’s key metric of “registered users,” which is not the same as “active users” (which usually means people who use the app at least once in a measurement month — Pandora quotes “active users,” making it difficult to compare the audience footprints of the  two platforms.)

After surveying 7,800 Americans age 13 and older, MusicWatch found that nearly one in four people (40-million people) listened to iHeartRadio in the past month. (Based on a population of approximately 160-million Americans who stream online radio, which Russ Crupnick tells us is a MusicWatch proprietary calculation.) That finding alone is helpful in positioning iHeartRadio in the streaming market by audience size. MusicWatch notes that 40-million nearly reaches the audience size of Spotify Free (that service’s ad-supported online radio plan), and surpasses Google Play Music and SoundCloud.

Another significance of that 40-million number is an indicator of iHeartRadio’s ability to turn registered users into monthly listeners, which MusicWatch calls “strong monthly conversion.”

Interest in Paying

Over 40% of iHeartRadio listeners expressed an interest in paying for a Plus service — the survey offered respondents choices of “definitely” and “probably” paying for the service.

It’s worth noting that the survey was conducted before iHeartRadio Plus was launched, although iHeart did pre-release a descriptive summary of features that would be included in iHeartRadio Plus and/or iHeartRadio All Access (the company’s fully interactive subscription plan). MusicWatch told us the survey included a “general description of the ‘light’ concept with a series of expected features from Pandora and iHeart.” Pandora Plus was in the market already.

Another important note: MusicWatch says that “consumers typically overstate their willingness to pay for services.” It’s easier to say Yes in a survey than to pull out a credit card.

The survey work comes with a projection that iHeart can reach 4-million monthly subscribers to the Plus service. That speculative projection is based on 40M monthly listeners (see above), 20% purchase interest, and an average of two users per account.

When Music Watch surveyed for what users would like in a “light” service, song replaying came up to the top. Both iHeartRadio and Pandora offer song replays in their Plus services.

Brad Hill


  1. In addition to cheaper prices, those of us living in rural areas consider offline listening a necessity with these services.

    • That’s why I prefer to store music on my phone instead of streaming. I purchase my MP3s from iTunes, Amazon, etc., hook up my phone to my computer, and copy the files I want to hear to my phone. After I get them on my phone, I can either use my phone’s Google Play Music app to play them (app is set on “Download Only”) or I can use my phone’s MP3 player app.

Comments are closed.