As streaming subscriptions stall, are price rises inevitable?
After years of explosive growth, the music streaming market in the UK is levelling out, new research suggests.
Almost half the population, 32.4 million people, has now signed up to apps like Spotify and Apple Music, according to music industry analysts MIDiA Research.
That’s vastly more than the 20 million who pay for video streaming, but the number of new subscribers is tailing off. About 1.25 million new customers took out a plan last year, said MIDiA, representing growth of 4%. In 2020, that figure was 9%.
MIDiA says the slowdown will lead to higher prices. “If you’re not growing users, what do you do? You get them to pay more,” said the company’s managing director, Mark Mulligan.
Spotify has already bumped up the price of its premium plan in the UK. After years of being held at £9.99, it increased to £10.99 in summer 2024, and £11.99 last May.
The Swedish company is also reported to be introducing a new high-fidelity streaming option this year, which could cost an extra £5 a month.
Amazon Music, which is the UK’s second-biggest streaming platform, also increased its prices in January.
Mulligan said that was just the beginning.
“Over the course of the coming years, expect a continued and concerted effort from the music industry, of finding new ways to get subscribers to pay more money.”
Sony Music’s president of global digital business, Dennis Cooker, argues that such increases are vital.
“Spotify has publicly commented that their intention is to launch a higher price tier. I’m relying on that, and assuming that that is going to happen,” he said at an event held by the recording industry organisation the IFPI last week.
According to MIDiA, one alternative would be the introduction of “a really cheap, entry level” subscription to attract new users; but Cooker rejected that idea.
“We’ve really tried with mid-price tiers and, frankly, struggled to get them to work,” he said.
Users who don’t want to pay can already access a “pretty robust” offering on ad-supported services like YouTube; while a monthly subscription offers millions of songs to everyone.
“Finding something in the middle that you can actually explain to consumers and that is different than what’s already on offer has been really, really challenging,” he explained.
Outside of the UK, MIDiA’s latest report showed that the number of people subscribing to music streaming services grew by 11.6% year-on-year.
Most of the growth came from emerging markets in Africa and India. China also extended its lead as the world’s biggest streaming market, with 190 million subscribers.
Mulligan predicted that the growth of streaming services outside Europe and America could change the way we listen to music.
“We’ll see a cultural shift where these massive installed bases of streaming users in the global south will shape listening habits in the west.
“As they become bigger markets, more people [in those countries] will want to become artists, and more people will want to set up record labels.
“So more music will be made, more music will be exported, and there’ll be a sort of cultural rebalancing.”
The change has already begun. According to the IFPI, Sub-Saharan Africa was the world’s fastest-growing music market last year, with revenues surpassing $100 million (£770,000) for the first time.
Genres like Afrobeats and Amapiano are already hugely popular and, last year, Nigerian star Burna Boy became the first African artist to headline a stadium show in the UK.
South Korea is also a powerhouse – accounting for 45% of all physical albums sold in the last year – while Latin America boasts some of the world’s biggest recording artists, including Bad Bunny, Karol G and Peso Pluma.
As a result, the UK’s historic musical dominance is waning.
Last year, British musicians failed to appear in the Top 10 of the world’s bestselling singles or albums, for the first time in two decades.
“In basic terms, the democratisation of music that we’ve seen, thanks to streaming, is wonderful – but it’s a very crowded space,” Victoria Oakley, head of the IFPI, told BBC News.
“The UK is seeing breakthrough artists like Myles Smith and Lola Young,” she added, “but that journey is rarely about overnight success these days.
“It can take five or six or seven years to get to the point where you’re a big household name, winning awards and number one albums.
“So the work is going on behind the scenes. It just requires more navigation than before.”
