Of Bits and Big Bucks ⇥ asymco.com

For the first time since the iTunes Store was opened, digital music downloads decreased in 2013. Most analysts and industry publications, like Billboard, attribute this to a huge increase in the use of streaming music services. But Horace Dediu of Asymco sees it differently:

Consumers have a fixed time budget, a more rigid constraint than their spending budget. Competition for a slice of a consumer’s time budget is far tougher than competition for a slice of a consumer’s wallet. […]

Downtime or “boredom” was filled with app interaction. This includes some social media consumption. These are not immersive experiences. They are “casual”, inconsequential and trivial. At first anyway. And that’s the rub. As apps enter a consumer’s world they initially take on non-consumption, which is easy to beat. But as the experiences become increasingly compelling they “move upmarket” and compete more aggressively with existing media consumption patterns.

In a nut, Dediu claims that apps took over the time previously occupied listening to music; i.e. he believes that less time overall is being spent listening to music. I don’t buy it, and Dediu’s own words illustrate why:

Music would appear less vulnerable to this app-based substitution because it’s an eyes-free experience and can be easily consumed concurrent with another activity. There is however, a subtle de-emphasis and hence devaluation of the experience as it fades into the background. The “job it’s hired to do” changes.

I don’t see how this doesn’t contradict what Dediu claims earlier in the article. Even if music is being played in the background, it’s still being played. People still want new music, even if it’s to be listened to in the background. As he points out, music is playable concurrently with just about anything else (aside from, say, a movie), so this paragraph seems to directly contradict his premise that people are listening to less music.

In fact, I’d wager that more music was played in 2013, if anything. The rise of streaming services means that it’s possible to discover more music for the same price, and it can all be done in the background. Services like Spotify Radio and Pandora ensure users are hearing a constant steam of music.

Dediu’s analysis makes little sense to me. I’d be very surprised if people were listening to less music; I’m not surprised that people are buying fewer songs when streaming services make it easy for many people to never purchase another song again.