The idea is that the sharing of playlists, and thus participation in subscription services, will increase just as use of mobile phones adoption increased once customers were able to call and text people on other networks. Spotify to deezer portable#The solution - it would be an market-wide solution, so don’t hold your breath - would be to make the playlists portable and universal so they can be played on any service. Mulligan believes subscription services can reduce their level of inactivity and manage churn by making music more social. All over the Internet, relatively small groups of people are accounting for large groups of activity. This rule says that only 1% of people on the Internet will create content, 9% will edit content and the other 90% will view the content without contributing. It’s called the 1% rule or the 90-9-1 rule. The Pareto principle also applies in the amount of time people will put into creating, editing and viewing Internet content. That is to say, just 4 out of 100 active users listen to Pandora more than 40 hours per month. Pandora says only 4% of its users are likely to be affected by the mobile listening caps it recently installed. We see something resembling the Pareto principle in Internet radio. People in the music business may recognize the name “Pareto” from the book “The Long Tail,” whose familiar graph is that of a Pareto distribution. The 80/20 rule is also known as the Pareto principle. Others could be infrequent customers who buy once every year or two. Some are first-time customers who will never return. For example, 20% of computer bugs cause 80% of crashes.) The other 80% of customers spend less and buy less often than the super-active 20%. Various estimates put the average email list’s inactive addresses at 65% to 70% of the entire email list in a given year.Īll this inactivity by a large number of users brings to mind the 80/20 rule that says 20% of customers account for 80% of a company’s sales. Email lists have a similar problem with inactivity. A recent study by Flurry shows a third of apps were able to retain 37% or more users over a subsequent 30-day period. Last year Semiocast found that 73% of Twitter accounts are inactive. For instance, a 2012 study found 70% of Facebook pages are inactive. Inactive accounts are a part of doing business for many online services. Spotify to deezer update#As Mulligan later noted in an update to the blog post - after an exchange on Twitter with Spotify CEO Daniel Ek - “this is a problem that affects all businesses that have a free tier that requires registration.” Not everyone will become a frequent visitor or paying customer. Getting people to register is just the first step. Inactive users are just a part of doing business online. Churn is expensive to companies because it is always more expensive to gain a new customer than to keep an existing customer.īut worrying about an unconverted, inactive group of registered users breaks with the logic of the Internet. The important point here, writes Mulligan, is that “streaming services as a whole have a problem with churn.” The term churn means loss of customers. Inactive accounts represented 70% of Spotify’s registered accounts at the end of 2011 and 73% of Deezer’s registered accounts this year. Spotify to deezer how to#Whether or not it’s a problem - and how to fix the problem - is open for discussion. That’s what Spotify and Deezer have found, notes music industry analyst Mark Mulligan. When you hand out free accounts to a digital service - especially in the age of Facebook Connect - you’re likely to find most people just aren’t that into you.
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