Product & Growth · Monetization · Medium · 25-35 min

Music App — Converting Free Users to Paid

Last updated 2026-07-29

What is this case about?

A freemium music-streaming app has 200M free users and 40M paid. Free-to-paid conversion has plateaued at 20%, content (royalty) costs scale with listening regardless of whether a user pays, and the ad-supported tier barely breaks even. Leadership wants higher conversion and better free-tier economics. You advise.

Where strong candidates start

  • Understand the economics — royalty cost scales with plays, so unmonetized free listening can lose money
  • Diagnose why conversion plateaued — the free tier may be too good, or paid value unclear

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