Recorded Music Global's growth is growing very rapidly every year. In 2019, the industry grew by around 9.7% in terms of revenue and 34% of total streaming, with nearly half coming from Latin America, then Asia, and followed by Australia. (IFPI, 2019). Global Music Report 2019 said total revenues for 2018 were US $ 19.1 billion.
Spotify is a streaming service that provides features to stream music, listen to podcasts, streaming video, and radio. Basic functions such as playing music are free, but we can also choose to upgrade to Spotify Premium and can choose what we want to listen to, get recommendations from personalized features, such as Discover Weekly, Release Radar, and Daily Mix (Spotify, 2021).
Apple Music is a music and video streaming service developed by Apple, users select music to stream to their device on-demand, or they can listen to existing playlists (Apple, 2021). Not like Spotify, they don't have the free features of their platform so anyone who wants to listen to their song has to subscribe to Apple Music first.
Amazon Music is a streaming service made by Amazon which is included in Amazon Prime. They can also connect with other amazon services such as Amazon Echo devices, along with FireTV, Fire Tablets and many other Alexa-enabled devices. Among its competitors, Amazon Music has the most expensive subscription price, which is IDR 89,000.
Spotify, Apple Music, and Amazon Music are the service providers with the most number of users in the world. This paper wants to know the consumer preferences of each service provider and the reasons. This is because the three service providers have the same subscription price, but the number of users is very different.
Because this paper aims to determine the consumption preferences of streaming music service options in the world, the writer only uses data on the number of users from each service provider. This paper does not calculate income from consumers because it does not have this data and its utility, and if the price of one of the goods goes down, the demand for that item will increase. In the case of a neutral good the consumer spends all of her money on the goods they like and doesn't purchase any of the neutral goods.
Consumer preferences are characterised axiomatically. In this method of modelling as few meaningful and distinct assumptions as possible are set forth to characterise the structure and properties of preferences, the rest of the theory then builds logically from these axioms, and predictions of behaviour are developed through the process of deduction (Jehle, 2011).
Axiom 1 formalises the notion that the consumer can make comparisons, that is, that they have the ability to discriminate and the necessary knowledge to evaluate alternatives. It says the consumer can examine any two distinct consumption plans x1 and x2 and decide whether x1 is at least as good as x2 or x2 is at least as good as x1 (Jehle, 2011).
Axiom 2 gives a very particular form to the requirement that the consumer's choices be consistent. Although the consumer is capable of comparing two alternatives at a time, the assumption of transitivity requires that those pairwise comparisons be linked together in a consistent way. Experiments have shown that in various situations, the choices of real human beings are not always transitive. These two axioms together imply that the consumer can completely rank any finite number of elements in the consumption set, X, from best to worst, possibly with some ties (Jehle, 2011).
With the assumption of the data above, the implications be captured is if the average music streaming consumer prefers Spotify to Apple Music, and Apple Music users prefer Apple Music over Amazon Music. With the above method, it can be concluded that Spotify users also prefer Spotify over Amazon Music.Â
This can be explained by the theory of Dorr, Benlian, Vetter, and Hess (2010) which they designated as Music as a Service (MaaS) , which says that consumer preferences in choosing a streaming service depend on price (20%), contract duration (16%), music quality (14%), offline access (12%), distribution channel (11%), personalization (10 %), mobile application (9%), and community features (7%) (Kim J, 2017). Spotify, in contrast to its competitors, has a free service for its users, which of course has different facilities. For example, in a Spotify premium subscription, users get no advertisements and can choose the songs they want to play. As for Apple Music and Amazon Music, they only have paid services for their platforms.
