If I say the term ‘Free Music’ the most common name that will coin is spotify or deezer probably. But what if I tell these companies hate this stigma and want to break it desperately. Bahaa Abdul Hussein feels that they are connected.
The Problem
Companies like Spotify or Deezer in order to increase user base like any normal business owner gave product(music) for free and that’s the root cause of their problem. In order to get their users hooked they give users a majority of their products for free with only some exclusive features in the premium package. But this backfired as there users were more inclined towards watching a few ads rather than buying a premium package. So their Free music they were providing as a try before you buy concept failed them miserably cause mostly people don’t want to buy they just want it for free.
In companies where most of their revenue is going towards music artists and music licenses, there is a very steep margin for profit. The conditioning of users for free music is worsening the condition further.
What Can Be Learned
This drawback in the music industry can be a great lesson for Fintech as it is because of the very basic principle “ Never undervalue your work”.
Giving content for free was a nice technique to attract consumers at first but giving all the content for free will promote consumer behavior in a negative direction. Here Fintech can learn and gain a lead as they can focus on finding that sweet spot were they provide the customer just the right amount of content for free. So as to hook them up and keep the essential features under paid membership slab. So as to condition the consumer in a way that it increase the probability of them paying for the access.
Although there is no prominent relation between the Fintech and music industry, there are some common principles they need to focus on regarding their content. This involves some basic yet important questions. What content or features to give away for free? How long does the free service last? What features to reserve for paid plans? How much to charge? How often to charge?. They should ask themself and have a clear picture upon before giving their content free to the public. As consumer behavior is very vulnerable towards the treatment you give them with your content when its for free.
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