"Social" Becomes Key Battleground for Streaming Music Providers

J.D. Power Finds Customer Satisfaction Highest When Listeners Share Playlists, Follow Other Users

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Sep 28, 2016, 08:05 ET

NEW YORK, Sept. 28, 2016 /PRNewswire/ -- Overall satisfaction with paid streaming music service is highest among fully engaged customers—listeners who consume others' content (i.e., they follow other users and/or listen to their playlists) and who say they "always" or "sometimes" share their own playlists—according to the J.D. Power 2016 Streaming Music Satisfaction Study,^SM released today.

The inaugural study measures overall satisfaction among customers who have used a subscription-based streaming music service within the past six months. Customer satisfaction is examined across six key measures (listed in order of importance): performance and reliability; ease of use; cost of service; content; communication; and customer service. Scores for each measure are reflected in an index based on a 1,000-point scale.

The study finds that satisfaction with paid streaming music service is impacted by the level of engagement with listening to and sharing playlists and content with others. There are four distinct listener profiles. The largest segment is passive listeners (customers who neither share their own content/playlists nor consume other users' content), representing 44% of the total music streaming universe; 29% are fully engaged listeners; 22% are followers (customers who consume other users' content/playlists but do not share their own); and 5% are sharers (customers who say they "always" or "sometimes" share their own playlists but do not consume other users' content).

"The streaming music customer experience appears to be affected by a number of dimensions, including paid vs. free streaming, device choice and content selection," said Kirk Parsons, senior director and technology, media & telecom practice leader at J.D. Power. "The key to success, however, is increasingly becoming how well streaming music brands create a viable music ecosystem that can not only support multiple types of devices, but also facilitate listeners' social sharing and following of playlists with others."

Following are some of the study's key findings:

Paid Music Services Generate Higher Satisfaction than Free Streaming: Satisfaction is higher across all measures among customers who pay for their music service, with an overall satisfaction gap advantage of 19 points, compared with those who use free-based music services. The largest satisfaction gaps are in the customer service (68-point gap) and communication (45-point gap) measures.

Satisfaction Lowest among Passive Listeners: As levels of engagement and contribution to a streaming community rise, so does satisfaction. Overall satisfaction is lowest among passive listeners (801), followed closely by the followers (812), while satisfaction is highest among fully engaged listeners (860) and sharers (833). Satisfaction in all measures is lower among customers who are not engaged than among those who are, with an especially wide gap between the two segments in the communication (79-point gap) and cost of service (72-point gap) measures.

Exclusive Content Improves Customer Advocacy: Among customers who listen to content released exclusively on their streaming service, overall satisfaction is 52 points higher than among those who do not, and content satisfaction is 59 points higher. Nearly three-fourths (74%) of customers who listen to exclusive content say they "definitely will" recommend their provider vs. 54% of those who do not who say the same.

Peripheral Devices Enhance the Listening Experience: Overall satisfaction is higher among customers who use a peripheral device to stream music than among those who do not. Several devices that are not yet widely adopted have particularly high impacts on satisfaction: smartwatches (+57 points); home automation controllers (+50); and virtual reality viewers (+48). Bluetooth speakers, which are more widely used, also have a considerable effect (+23).

Study Rankings
Apple Music ranks highest among the streaming music brands included in the study, with an overall score of 834. Apple leads with the highest score in three of the six measures, performing particularly well in performance and reliability, content and ease of use. Rhapsody ranks second with an overall score of 826 and performs particularly well in the cost of service and communication measures.

About the Study
The 2016 Streaming Music Satisfaction Study is based on responses from 4,482 customers. The study was fielded in June and July 2016.

Study Rankings
J.D. Power 2016 Streaming Music Satisfaction Study
(Based on a 1,000-point scale)
Overall Index Scores		JDPower.com Power Circle ratings
Apple Music	834	5
Rhapsody	826	4
Pandora	825	4
Spotify	824	4
Industry Average	822	3
TuneIn	820	3
Amazon Prime Music	818	2
Google Play Music	818	2

Power Circle Ratings Legend
5 – Among the best
4 – Better than most
3 – About average
2 – The rest

Award-Eligible Streaming Music Companies Included in the Study
Company Name	CEO Name	Company Location
Amazon Prime Music	Jeffrey Bezos	Seattle, Wash.
Apple Music	Timothy Cook	Cupertino, Calif.
Google Play Music	Sundar Pichai	Mountain View, Calif.
Pandora	Tim Westergren	Oakland, Calif.
Rhapsody	Mike Davis	Seattle, Wash.
Spotify	Daniel Ek	Stockholm, Sweden
TuneIn	John Donham	San Francisco, Calif.