One digital decade has ended and another has begun. Throughout these chaotic times, cloud-based music services have remained at the front of music industry discussions.
Are fans willing to pay a monthly fee to access unlimited music or will ownership carry on?
It has been argued that the era of à la carte music downloads is over – that the iTunes business model has been exhausted. Fans no longer desire to pay for each song or own them. Instead, they want to have access to everything for nothing – or, at least, a small fee.
Tech-companies like Spotify are betting that if they allow enough users to build music collections – for free – eventually, they will take ownership of their libraries and pay to access them through mobile devices. Meanwhile, rival services like Thumbplay Music, Rdio, and MOG offer limited to free trial periods. This raises a few important questions.
The longest trial periods available right now are fourteen days. Is this enough time for a fan to collect music and form long-term attachment to it? Or do they need more time?
Moreover, do the features that cloud-based music services provide encourage fans to take ownership of their music or do they actually hinder this process? We know that fans take pride in their music collections in some cases and not others, but at what point and why?
How much effort must a fan exert before they perceive rented songs as their own?
In recent years, several thousand words have been expended by writers in an attempt to demystify the rent vs. own argument. Yet few have explored these challenging questions.
Luckily, scientific research has revealed several principles of the human endeavor that relate to these issues. Through the lens of behavioral economics and choice theory, we will get to the heart of these questions, discover the real challenges that cloud-based music services face, and learn why their attempts to appeal to the mass-consumer may have mixed results. Let’s start by exploring the spectrum of effort in today’s music services and try to determine if a secret balance exists between effortlessness and investment.
The Varying Degrees of Effort
A central component of many cloud-based music and internet radio services is their ability to generate personalized playlists and stations. The appeal of such features is rooted in the fact that in a music market dominated by traditional radio, many users have not been placed in control of the songs that get played on a station nor have they ever experienced a playlist that appeals solely to their taste. Using music services like Thumbplay Music or Pandora is empowering for users, because each enables them to create personalized playlists and stations with minimal effort – that only play songs that are relevant to them.
In each case, depending on the music service in question, varying degrees of effort are required of users. For example, in Thumbplay Music, the extent to which a user can modify a playlist once it is automatically generated is rather limited. Once a Frightened Rabbit playlist is created with their “Playlist Genie” feature, a set of similar songs is produced.
Beyond that, the only thing a user can do to change the playlist is to delete songs from it.
Now, contrast this with the extent to which a user’s effort can influence a Pandora station; they can give songs a “Thumbs Up” or “Thumbs Down” and instantly impact the nature of the songs that are played next on their station. As far as the effort they ask of their users goes, this places Thumbplay Music on the low-end and Pandora at the middle of the road.
On the higher end of this spectrum, Slacker Radio gives users far more opportunities to fine tune and add variety to their stations. Users can “Heart” their favorite songs and “Ban” others. They can also “Fine Tune” their stations across categories like the amount of favorite songs that will play; how many new artists they will be exposed to and how often they will appear; and the level of song popularity from fringe to hits. Like traditional radio, users can also request music and soon thereafter, a personally selected song will play on their station. They can also edit song and artist ratings in the event that a mistake was made or they had a change of heart about an artist. In other words, when compared to the other music services, Slacker Radio enables users to exert as much effort as they desire.
Thumbplay Music, and soon Slacker Radio too, face the challenge of getting users to take ownership of their cloud-based music collections and develop long-term attachments to them. Of course, music services like Rdio, MOG, Napster, and Rhapsody are also staring down that same challenge. Each company, in their own way, is trying to persuade users to take ownership of rented music, form a long-lasting connection to it, and pay to access it.
If these companies fail to accomplish this feat, users will ultimately unsubscribe from their music services and they will lose profits that are essential to their continued growth.
Many research studies conducted in recent years point to the notion that the exertion of effort among users is vital to them developing an enduring attachment to an object – especially those they have helped create – and it also causes them to overvalue it.
What IKEA Effect Can Teach Us
Given that each music service varies greatly in the amount of effort they require of their users, it is worth exploring in more depth the balancing act they must achieve between asking too little of their users – and not allowing them to gain the cognitive benefits of ownership – and demanding so much work of them that they are turned off and exit.
Wrongly, companies assume that the ideal music experience for a user requires as little effort of them as possible. As we will find out, this line of thinking works against the result that cloud-based music services are hoping to achieve and leaves their users unsatisfied.
In his latest book The Upside of Irrationality, behavioral economist and best-selling author Dan Ariely outlines his research into how effort impacts the way people value things.
Throughout several studies that entailed participants folding origami and assembling Legos, he found these four principles of the human endeavor were often demonstrated:
1) Effort Changes Us. In an experiment that involved origami, Ariely found the effort participants put into their creations changed the object, them, and how they evaluated it.
● When fans collect music, the amount of time and effort that they invest in building their music collections will correlate with how they value them. Physical music collectors likely place a higher worth on their collections than those who only have digital music libraries.
2) Labor Leads To Love. The harder the participants worked their origami, the more they valued it. They perceived them to be worth more than professionally folded creations.
● The harder that it is to acquire an album, be it rare or out-of-print, the greater a fan will value it. Similarly, if a fan waited outside of a record store for five hours in order to get a new album, they will value it more than a fan that effortlessly downloaded it off iTunes.
3) Our Views Are Biased. When creators bid on their origami in an auction, they wrongly assumed that others valued their origami as highly as they did. Others didn’t.
● Music collectors fail to appreciate that other fans will not value their libraries as highly as they do. If their music collections were placed up for sale, the price that they would ask as opposed to the amount another fan would be willing to pay for it would contrast greatly.
4) Completion Matters. In another trial, Ariely removed steps from the instructions; making it so many participants couldn’t finish their origami. They valued it much less.
● Many fans have music collections, but there is a certain threshold that must be passed before a pride in ownership is taken. Casual fans who collect albums, but have failed to reach this milestone, will value their incomplete set less than those who have reached it.
As we see, why fans value their music collections so highly can be partly attributed to the amount of time and effort that they invested in creating them. This overvaluation resulting from labor is a psychological bias what Ariely refers to as the IKEA Effect. Think about it.
A well-curated music collection isn’t that much different than a take it home and build it yourself bookshelf. Both take time and effort to put together, but after the fact, we tend to look more fondly at our creation. A bookshelf may certainly take less work to assemble, however, once it is finished – missing screws, semi-crooked shelves, and all – we will value it higher than one that we bought online and had delivered right to our doorstep.
It is ours. We built it.
As more cloud-based music services are marketed to the mass-consumer, i.e. people who have not previously accumulated large music collections, it is worth revisiting the IKEA Effect and trying to determine if these services are providing their users with the opportunities to form lasting bonds to their music collections or if they are failing to.
Appealing To Mass-Consumers
Pandora has been tremendously successful in mixing the amount of time and effort that they ask of their users. They have positioned themselves in the middle of the road. In turn, many users do view the stations they have created on the web radio service as their own.
However, a majority of Pandora users have not entirely taken ownership of their stations, as they are not willing to pay for them. Unlike Pandora, most cloud-based music services don’t have a free option. They rely on other tactics, like feature automation, to attract users.
Here are three features that are worth examining:
1) Library Builder. This feature doesn’t fully exist yet. As I imagine it, Library Builder is a feature in cloud-based music services that users see when they first sign up; it helps them quickly build their music collections by giving them “Artists You May Know” tools.
2) Playlist & Radio Generator. In almost every cloud-based music service today, there is the ability to either generate playlists or radio stations automatically. As I showed above, many of today’s services ask for varying degrees of time and effort from their users.
3) Pro-Am Playlists. In MOG, there are community and professionally curated playlists that users can tune into. They are a discovery feature that many music services utilize.
These features are designed specifically to ease the amount of time and effort that users spend on building their collections and selecting music; they enable them to “Lean Back” while listening. In order to “cross the chasm” as author Geoffrey Moore puts it, cloud-based music services will feel the need to place more emphasis on these features.
As a result, companies will dramatically decrease effort that users will exert in building their music collections. This is already happening. In a recent interview, we7 CEO Steve Purdham confessed that he thought “the ultimate music service was one where you get to choose.” Yet his users were telling him, “I can’t be bothered, just entertain me.” With this knowledge, we7 refocused their music strategy and enhanced their radio station features.
As more services try to attract mass-consumers, such strategy shifts will be common.
We assume that the mass-consumer will not enjoy having to slowly build their music collections, put playlists together, customize radio stations, and that they desire to have professionally made playlists to explore. They too assume that they would not enjoy such errands either. Therefore, in order to accommodate their needs, which are different from core music fans, services will attempt to implement features that ease the time and effort that users will need to invest in creating their music collections. In thinking that they do not have the time to mess around with building their own playlists and a collection artist by artist, these users will be more apt to engage in the “Lean Back” library building tactics and listening sessions. As a result, they will have fewer opportunities for customization, personalization, and attachment. Unlike core music fans, they will not grow to overvalue their music collection and form an enduring bond to it. Their labor will not lead to love.
The Cloud-Based Music Paradox
Naturally, users may prefer automated playlists and radio stations, because, to them, the feature isn’t that they are customizable. Instead, the fact that it saves them time and effort is what makes them so appealing. Yet by selecting this method of creating a musical experience they unknowingly diminish the cognitive benefits that the IKEA Effect offers us.
“Sadly, in surrendering our effort in these activities, we gain relaxation,” Ariely writes in his book The Upside of Irrationality, “but we may actually give up a lot of deep enjoyment because, in fact, it’s often effort that creates long-term satisfaction.” This is the great paradox of cloud-based music services. Because, in effect, the features that companies will likely employ to appeal to the needs of the mass-consumer have the potential to become the underlying reasons why they are turned away. And, it doesn’t stop there.
Research has revealed that casual fans, i.e. mass-consumers, are more susceptible to the effects of decision paralysis. They find it much harder to eliminate irrelevant options and are unable to zero in on the most valuable choices. Thus, they become overwhelmed.
However, it’s hard to say how vast the chasm is between core music fans – the “experts” – and casual fans. Because, let’s be honest now, aren’t we all novices most of the time?
As Sheena Iyengar, a leading analyst on the psychology of choice, argues, “Most of the time when we are confronted by more, rather than a few, choices we’re often novices and so we don’t really know how to differentiate these various options.” As fans, we also don’t always know what we want and, in these cases, it can actually make us worse off. Iyengar explains further, “It’s actually easier to figure out what you want and to figure out how the options differ if you have about a handful of them than if you have a hundred of them.”
In testing various cloud-based music services, I’ve found that not a single one of them does a good job at helping users differentiate between options. Each service has their own “New Music” section to scroll though, but once inside all users see are album covers and names. There are no descriptions or recommendations – nothing. This leaves users flying blind through an oasis of choice. The options presented to them have no meaning.
So what do they do?
In a previous essay, I found that – in culture – the effect of overwhelming choice has the potential to cause fans to opt for the same old songs as a way to avoid facing unlimited options online and off, to rely on filters rather than on themselves, and to become more passive participants in their cultural lives. And if what I’ve said in the past about how fans handle choice in record stores, the web, and iPods is true of cloud-based music services as well, fans will also get less satisfaction out of the cultural choices they make, and they will increasingly opt out all together. In cloud-based music services, there is a surplus of options. This suggests that when a casual fan uses them and is overloaded by choice, they will be more likely to grow reliant upon features such as Library Builder, Playlist & Radio Generator, and Pro-Am Playlists. If this happens, casual fans will surrender effort and lose opportunities that may have enabled them to form an enduring attachment to their cloud-based music collections; they will never take ownership of their music.
What People Want Vs. What’s Better
To reiterate, there is great discrepancy between what casual fans claim they want out of a music service and what’s better for them – i.e. what they will derive long-term satisfaction from. They tell companies that they would most enjoy a service that takes the effort out of music discovery and collecting. This way, they can listen to music without losing hours of their day sorting through options and settings. Likewise, companies presume that causal fans have no desire to perform these tedious tasks. Core music fans may take pleasure in tweaking and fine-tuning, but casual fans do not. So these features are downplayed.
In their place, more automated features are added. And it will seem as if casual fans are more satisfied and enjoying the musical experience – until the day comes that they leave.
“There is a delicate trade-off between effortlessness and investment,” Ariely makes clear. “Ask people to expend too much effort, and you can drive them away; ask them for too little effort, and you are not providing the opportunities for customization, personalization, and attachment. It all depends on the importance of the task and on the personal investment in the product category.” In other words, there is a balancing act that cloud-based music services must perform. They need to meet casual fans in the middle of the road, without tilting too far to either side of the spectrum. If they require too much effort of their users, they will quickly determine that cloud-based music services take more time than they save. Yet if they automate their features too extensively and remove the effort from the equation, users will be content in the short-run, but will gain less satisfaction overall.
Added to this, is the complication of choice. If casual fans feel overloaded, they will pursue musical experiences that won’t imbue in them the cognitive benefits of music ownership.
More Than The Quality of Sound
Right now, cloud-based music services are close to tipping into the mainstream market.
Most, if not all them, are dependent on appealing to the mass-consumer. In order to achieve profitably and long-term vitality, they will need to draw a substantial subscriber base. The paths that they take to achieve this will vary. Few will succeed and many will fail.
But if companies neglect the delicate trade-off between effortlessness and investment, they will have much more mixed and negative results. Both MOG and Rhapsody provide fourteen-day free trials of their service. Others offer even less. Ariely’s research into effort and overvaluation suggests this isn’t enough time. Users may get to try out the service and see if they like it, but they won’t develop a deep-seated attachment to the music.
These things take time.
As we have learned, the IKEA Effect is a psychological bias that causes a fan to overvalue their music collection and take pride in the owning it. Each fan has a different threshold that must be reached before they begin to view their music collections with loving eyes.
But if they never cross it – music in the cloud won’t make them proud. And while these music services allow fans to consume more music, they may enjoy it much, much less.
Take the effort out of music and you lose quality – not of sound – but of enjoyment. Even a 128k MP3, heard through crappy white earbuds, can instill us with satisfaction and pride.
But without labor, there is no love.