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April 22, 2019
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Streaming accounted for nearly half of music revenues worldwide in 2018

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The scales are about to tip in favor of streaming music becoming the number one driver of global recorded music revenues — a shift that appears to be on track for sometime this year. According to a new industry report, global recorded music revenues jumped 9.7 percent in 2018 to reach $19.1 billion — up from $17.4 billion in 2017. Streaming music revenues, in particular, now account for nearly half (47 percent) of global revenue, thanks to a sizable 32.9 percent jump in paid streaming last year. This brought streaming revenues to $8.9 million in 2018, and puts them on track for a further jump in 2019.

This is the fourth consecutive year of growth for the global music market, and the highest rate of growth since IFPI — the music industry trade group behind the new report — first started tracking the market in 1997.

Paid streaming accounted for the majority of streaming’s contribution to revenues, with a 37 percent share of the market versus ad-supported streaming’s 10 percent share.

At year-end, there were 255 million users of paid subscription streaming accounts, the report found.

Meanwhile, physical disks dropped 10.1 percent over the past year, to account for 24.7 percent of revenues. Within that segment, vinyl is still growing — it posted its 13th consecutive year of growth, to reach a 3.6 share of the market. But it couldn’t make up for the fact that physical format revenue, overall, still declined.

As consumers drop physical disks, they continue to turn to digital.

Digital revenues grew by 21.1 percent in 2018 to reach $11.2 billion — which represents the first time they’ve crossed the $10 billion mark, the report noted. Within this category, streaming grew by 34 percent to reach $8.9 billion (~$7 billion was paid subscription streaming), while downloads declined 21.2 percent to 7.7 percent of the market.

In 38 markets, digital makes up more than half of revenues, the report said.

Revenues from performance rights and synchronization revenue (the use of music in TV, movies, games and ads), represented a 14 percent and 2.3 percent share of the total music market, respectively.

North America, in particular, posted another year of double-digit revenue growth with a 14 percent jump, with strong streaming growth (33.4 percent) offsetting the physical revenue declines (-22 percent).

Asia and Australia overtook Europe to become the second largest global region for revenues with 11.7 percent growth. And Latin America was the fastest growing region, with 16.8 percent growth.

In order, the top markets by revenue were: the U.S., Japan, the U.K., Germany, France, South Korea, China, Australia, Canada and Brazil.

News Source = techcrunch.com

Digging into Apple’s media transformation

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Extra Crunch offers members the opportunity to tune into conference calls led and moderated by the TechCrunch writers you read every day. This week, TechCrunch Editor-in-Chief, Matthew Panzarino, offered his analysis on the major announcements that came out of Apple’s keynote event this past Monday.

Behind a series of new subscription and media products, Apple has set the stage for one of the largest transformations in the company’s history. Matthew touches on all of Apple’s major product initiatives including Apple’s new credit card, its push into original content, its subscription gaming platform, and its subscription news service, which features Extra Crunch as one of the debut publications.

“I don’t think many of the things that Apple announced here, on an individual basis, are earth-shattering. I think it shapes up to be a really solid, nice offering for people with some distinct advantages but at the same time it’s not breaking huge molds here. I think the same thing applies across all of the offerings that they put out there.

I just felt that together, it’s solid but not scintillating and we need to see how they develop, how they launch, and then what they do with these platforms…

…Seems relatively straightforward. However, some of the stuff people have glossed over is very intriguing.”

Matthew goes into more detail on why he didn’t view the announcements as individually earth-shattering, and why he sees compelling opportunities for Apple to position its offerings as a symbiotic ecosystem. He also goes under the hood to discuss some of Apple’s overlooked competitive advantages in media and to paint a picture of how Apple’s new product lines might evolve in the long-term.

For access to the full transcription and the call audio, and for the opportunity to participate in future conference calls, become a member of Extra Crunch. Learn more and try it for free. 

News Source = techcrunch.com

iOS developers will soon be able to offer discounts to their existing and lapsed subscribers

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As subscriptions continue to grow into a sizable revenue stream for mobile app developers, Apple has had to make adjustments to its guidelines, rules and even its tools for subscription management in recent weeks. It issued stricter guidelines around how subscriptions are to be presented to consumers, and it made the setting for canceling existing subscriptions more accessible. Now, Apple is rolling out new tools for developers that will help them retain their current customers and win back lapsed subscribers.

The company announced on Friday that apps with auto-renewable subscriptions will soon be able to offer their subscriptions at a discounted price for a specific period, as a means of growing and retaining their customer base. This will give the developers more control over their subscription pricing than was available before.

Until the change, developers could only make introductory offers to entice consumers to sign up for the first time. For example, developers could lure customers with a one-time introductory price, offer a free trial or offer a discounted rate for a specific period of time before the subscription converted to the full price.

But these offers could only be made to first-time customers. The new promotional offers will allow developers to cut similar deals for existing subscribers or to win back the business from those who used to pay for the subscription but had canceled.

While the new promotional offers allow for the same sort of discounts as introductory offers, they’re more flexible in terms of how they’re used.

With introductory offers, developers were allowed one offer per subscription, per territory. With promotional offers, developers can activate up to 10 offers per subscription. This allows them to test which ones work best for their customers, instead of having to pick just one.

And developers are in control of when an offer displays to a customer, in which territories and how many offers a customer can redeem.

In addition, while introductory offers may display in the App Store when promoted, the promotional offers will not. That means developers can use business logic that targets winning back their most valuable customers with offers that may be better from those shown to others — and no one would be the wiser. It also means developers can offer different deals to lapsed customers — like maybe a discounted subscription — compared with promos meant to retain current subscribers.

Developers will also be able to use receipt validation tools to find subscribers who turned off auto-renewal, which allows them to target those customers with new offers before their subscription lapses. They may also decide to target those who cancel during the free trial with different offers than those who cancel after using a paid subscription for a time.

As an end-user looking to save money, these changes mean it may be worth toggling off your subscriptions from time to time to see if you’re offered a better deal to resubscribe.

Developers were alerted to the new features last week, but the offers themselves aren’t yet publicly available.

To create the offers, developers have to download the latest Xcode 10.2 beta and will need to implement the new StoreKit APIs. They can then test their offers on the latest beta version of iOS 12.2, macOS 10.14.4 and tvOS 12.2. Apple said the offers will be made available to the public “soon.”

News Source = techcrunch.com

US iPhone users spent, on average, $79 on apps last year, up 36% from 2017

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Apple’s push to get developers to build subscription-based apps is now having a notable impact on App Store revenues. According to a new report from Sensor Tower due out later this week, revenue generated per U.S. iPhone grew 36 percent, from $58 in 2017 to $79 last year. As is typical, much of that increase can be attributed to mobile gaming, which accounted for more than half of this per-device average. However, more substantial growth took place in the categories outside of gaming — including those categories where subscription-based apps tend to rule the top charts, the firm found.

According to the report’s findings, per-device app spending in the U.S. grew more over the past year than it did in 2017.

From 2017 to 2018, iPhone users spent an average of $21 or more on in-app purchases and paid app downloads — a 36 percent increase compared with the 23 percent increase from 2016 to 2017, when revenue per device grew from $47 to $58.

However, 2018’s figure was slightly lower than the 42 percent increase in average per-device spending seen between 2015 and 2016, when revenue grew from $33 to $47, noted Sensor Tower.

As usual, mobile gaming continued to play a large role in iPhone spending. In 2018, gaming accounted for nearly 56 percent of the average consumer spend — or $44 out of the total $79 spent per iPhone.

But what’s more interesting is how the non-gaming categories fared this past year.

Some categories — including those where subscription-based apps dominate the top charts — saw even higher year-over-year growth in 2018, the firm found.

For example, Entertainment apps grew their spend per device increase by 82 percent to $8 of the total in 2018. Lifestyle apps increased by 86 percent to reach $3.90, up from $2.10.

And though it didn’t make the top five, Health & Fitness apps also grew 75 percent year-over-year to account for an average of $2.70, up from $1.60 in 2017.

Other categories in the top five included Music and Social Networking apps, which both grew by 22 percent.

This data indicates that subscription apps are playing a significant role in helping drive iPhone consumer spending higher.

The news comes at a time when Apple has reported slowing iPhone sales, which is pushing the company to lean more on services to continue to boost its revenue. This includes not just App Store subscriptions, but also things like Apple Music, Apple Pay, iCloud, App Store Search ads, AppleCare and more.

As subscriptions become more popular, Apple will need to remain vigilant against those who would abuse the system.

For example, a number of sneaky subscription apps were found plaguing the App Store in recent weeks. They were duping users into paid memberships with tricky buttons, hidden text, instant trials that converted in days and the use of other misleading tactics.

Apple later cracked down by removing some of the apps, and updated its developer guidelines with stricter rules about how subscriptions should both look and operate.

A failure to properly police the App Store or set boundaries to prevent the overuse of subscriptions could end up turning users off from downloading new apps altogether — especially if users begin to think that every app is after a long-term financial commitment.

Developers will need to be clever to convert users and retain subscribers amid this shift away from paid apps to those that come with a monthly bill. App makers will need to properly market their subscription’s benefits, and even consider offering bundles to increase the value.

But in the near-term, the big takeaway for developers is that there is still good money to be made on the App Store, even if iPhone sales are slowing.

News Source = techcrunch.com

Apple’s new developer guidelines signal that scammy subscription apps’ time is up

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Apple is sending out a message to app developers: stop tricking users into subscriptions. The company updated its guidelines for mobile developers to more clearly spell out what is and what is not allowed, according to 9to5Mac, which spotted the recent changes. The improved documentation comes at a time when subscriptions are becoming something of a plague on consumers.

Their rapid proliferation is turning everything into a subscription service, which could ultimately see consumers dropping favorite apps because they can’t afford dozens of ongoing payments. But more urgently, Apple’s lax enforcement its rules around subscriptions had allowed shady app developers to financially benefit.

Subscriptions are a big business the app stores, as the industry has begun to shift over to a recurring revenue model instead of one-time purchases within free apps or paid downloads. For developers who continue to improve apps and roll out new features, subscriptions give them the financial means of continuing that work, instead of constantly hunting for new users.

However, not all developers have been playing fair.

As TechCrunch reported last fall, a number of scammers had begun to take advantage of the subscription model in order to trick consumers into recurring payments, in addition to constantly pestering their free users to upgrade.

We found apps that constantly popped up upgrade prompts or hid the “x” to close the prompt’s window, as well as apps that promised free trials that actually converted after a very short period – like three days, for example. Others had intentionally confusing designs where subscription opt-in buttons would say things like “Start” or “Continue” in big text, while the text that explains you’re actually agreeing to a paid subscription is tiny, grayed out, difficult to read, or hidden in some other way.

Apple’s developer guidelines had clearly prohibited fraudulent behavior related to subscriptions, but Apple has now spelled out the details in black-and-white.

As 9to5Mac spotted, updates in Apple’s Human Interface Guidelines and App Store documentation now explicitly state that the monthly subscription price has to be clearly displayed, while information about how much people can save if they opt for longer periods of time, like a year, has to be less prominent.

Messages about free trials have to say how long trials last and what will be charged when the trial ends.

The new documentation has also been clearly organized, and includes screenshots of what a proper subscription sign-up flow should look like, as well as sample text developers can modify for use in their own apps. It even suggests that developers allow customers to manage their subscriptions within their app, rather than requiring them to find the subscriptions section in the App Store.

Today, many customers don’t know how to stop their subscriptions once activated – it takes several steps from the iPhone’s Settings to get into subscriptions, and still a few from within the App Store. (It’s also not that obvious. You tap on your profile icon on the top right of the Home page, then your Apple ID, then scroll down to the bottom of the page. By comparison, you can reveal the “Subscriptions” section with just one tap on Google Play’s left-side hamburger menu.)

While the existence of clear documentation that better spells out the do’s and don’ts is certainly welcome, the real question now is how well will Apple enforce its rules?

After all, Apple was supposedly not okay with subscription fraud and tricks before, yet its App Store was home to a good handful bad actors – particular in the utilities section.

Of course Apple doesn’t want to develop a reputation for allowing misleading or scammy apps to thrive in its App Store, but it simultaneously benefits when they do.

Although games still account for the majority of App Store spending, non-gaming apps across app stores now account for just over a quarter (26%) of total spend, according to App Annie’s “State of Mobile 2019” report. And that number has increased 18% since 2016, mainly because of in-app subscriptions.

Getting a handle on the proper way to market subscriptions is key. But there’s also the larger question as to whether subscriptions will be a sustainable model in the long run for the developers. There’s a bit too much of a gold rush mentality around subscriptions in today’s App Store, and it’s hard to resist the near-term benefit of money that rolls in monthly.

But as more developers adopt subscriptions, consumers will ultimately have to decide which have value for them. People are already paying for so many subscriptions – both inside and outside the app stores. Streaming video like Netflix, streaming music like Spotify, streaming TV like YouTube TV, subscription boxes like Ipsy, Prime memberships, grocery delivery like Instacart, smart home subscriptions like Ring or Nest, newspapers and magazines and newsletters, and so on. What’s really going to be left for a selfie editor, to-do list or weather app, in the end?

Many consumers are already starting to hit the point where they don’t have much more to spend, and will have to turn some subscriptions off in order to turn others on. Subscription app user bases could then contract, with only core customers remaining paying subscribers, as casual users return to free products – like Apple’s own built-in apps, for example, or free services offered by well-heeled tech giants, like Google.

Apple would do well to advise developers when subscriptions make sense for an app, not just how to implement and design them. Subscriptions should offer a real benefit, not just continued ability to use an app. And there could be cases where a one-time purchase to retain a customer who continually declines to subscribe makes sense, too.

 

 

News Source = techcrunch.com

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