Long-term partners, or short-term fling? Operator and music-service partnerships
Published: August 2012
A complex landscape of music-service provider/operator partnerships has emerged in Europe. The next obvious question, therefore, is which models are most successful and which are providing the best returns, for both parties.
Giles Cottle, Principal Analyst, Informa Telecoms & Media
This report assesses the deals done between music-service providers and operators, examining the types of deals done, results, and how the market for such deals will evolve.
Incumbent Telia and music-streaming darling Spotify made waves in 2009 by striking a pioneering deal whereby the former offered a heavily subsidized version of the latter’s service to its subscribers. From small beginnings, a major market has sprouted. Informa now counts 26 deals globally between operators and service providers, the majority in Europe.
A couple of factors explain the increase in deals, notably the meteoric rise of Spotify in Europe and the halo effect that competing services have benefitted from. Another is the continuing rise in the take-up of the smartphone, the device on which music-streaming services really come into their own. Such partnerships also help meet key needs for both groups of companies: differentiation in a savage telecoms market for operators, and mainstream reach for music-service providers.
More relevant than the number of partnerships is the range and breadth of deals that have been done. Some operators are fully subsidizing music services; others offer only a small discount. Some offer services to only their top-tier customers in an attempt to upsell more expensive packages to lower-tier users; others are offering them to all customers as a way to reduce churn. The next question, therefore, is which models are most successful and which are providing the best returns, for both operators and music-service providers.
How will this research help you:
Assess the viability of doing a deal with a music-service provider or operator
Analyze the success of different types of deals (e.g., bundled, fully subsidized, white-label, etc)
Review the opportunity for deals in emerging markets
New report format:
New Report format - designed for sharing - This research is available from our online store either as a hardcopy report or electronic format, featuring a PDF file, each designed to provide you with business critical intelligence which is easy to share with your colleagues.
Giles Cottle, Principal Analyst, Broadband & Internet, Informa Telecoms & Media