MusicTank

Reports

How To Dance To ARPU When Licensees Call The Tune

Spotify has attracted global press attention for its achievements in the UK, where the service has gone from zero to nearly three million users the space of six
months. Equally as surprising, Spotify took the time and effort to “go legit” before seeking popularity, reversing a trend that has dogged the development of the digital music market over the past decade.

Now the stakes are high for both the Swedish start-up and the music industry: is the arrival of Spotify, alongside further ISPs offerings, the ‘silver bullet’ that the
industry has been waiting for, or is it just another in a long list of false dawns? More importantly, will the established ISP metric of ARPU (Average Revenue per
User) help bring additional value to both rights holders and users; or will fears about displacement on one side of the market hinder the abilities of the other to
develop new legal models.

Furthermore, will it take a new mindset and some new metrics for the music industry to understand and embrace the ‘music as a service' paradigm?

Downloads

How To Dance To ARPU When Licensees Call The Tune

Prepared by Will Page and Chris Carey at PRS for Music, in collaboration with David Touve of Washington and Lee University and Keith McMahon of STL Partners and the Telco 2.0 Initiative, this paper presents a case study on Spotify and then explores the concept of Average Revenue Per User, to inform both rights holders and users about what the acronym implies, and how it might mislead those in the digital music supply chain.