Headphones are seen in front of a logo of online music streaming service Spotif
IN PHOTO: Headphones are seen in front of a logo of online music streaming service Spotify in this illustration picture taken in Strasbourg, February 18, 2014. Spotify is recruiting a U.S. financial reporting specialist, adding to speculation that the Swedish start-up is preparing for a share listing, which one banker said could value the firm at as much as $8 billion. REUTERS/Christian Hartmann

It seems like more people would rather stream content than download it somewhere. Yet the more surprising news is that they are also willing to pay for it. Thanks to the growing competition in the streaming segment, brands have nothing in mind but to please the customers with wider and better options.

According to a survey conducted by global pricing consultations firm Atenga, a large percentage of American listeners are willing to pay for audio content as long as it is ad-free. Almost 80 percent of 857 respondents expressed their strong dislike for ad-supported audio streaming.

“The key takeaway from this research is that Americans love their advertising-free audio streaming services, and are willing to pay much more for them,” Atenga CEO Per Sjofors says.

However, 50 percent of the respondents say audio quality is less important than music choice. The segment that cares less about quality also prefers sites or apps that offer wider options in terms of the availability of songs on their platform of choice. Demand for audio streaming has increased at US$10 [$13] per month, while revenue peaks between US$15 and US$20 per month.

Premium services Spotify and iTunes Radio enjoy a higher demand curve than lower-grade competitors Pandora and YouTube. The study also says that lower-grade competitors must double its subscription price to get closer to Spotify, which is the biggest music streaming provider today. Yet this will be a rather risky move for the likes of Pandora as this could stash a large number of users accessing the app for free.

Non-Music Segment

The spoken-word audio segment, nonetheless, remains an exclusive Audioboom (LSE: BOOM) territory. Since its inception, the London-based talk content pioneer has remained the only provider of on-demand non-music audio service on the web. It is also the sole spoken-word audio distributor for leading global broadcasting networks such as CNN, BBC and Al Jazeera.

Netflix, the on-demand video content leader, maintains its dominant position in the niche. It is also predicted to spend an additional US$1.5 billion on content this year due to the increasing competition in the segment. The company also aims to produce more shows to narrow down the lead of paid networks Showtime and HBO in terms of self-produced programs.

Outside US

Music streaming is also on the rise in the United Kingdom. In the first three quarters of this year, 5.32 billion streams are recorded by the British Phonographic Industry, an 81.4 percent increase from last year. This is the highest since the inception of music streaming in the country. On the other hand, digital album sales significantly decreased by 8.6 percent from 7.91 million to 7.23 million.

In the interim, runner-up brands in the U.S.-European region like Rdio has found a large market in India, a country that is considered by experts as a "huge internet market" that remains untapped and unutilised. Apparently, Rdio’s cheaper service is in keeping with the country’s limited data packages and varying Internet quality. Experts are yet to see if streaming could help alleviate the worsening piracy in the country.

Contact the writer: a.lu@ibtimes.com.au

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