India’s music streaming market gets louder

Nandana James Mumbai | Updated on May 06, 2019 Published on May 03, 2019

The music streaming market is transitioning from its infancy stage and is poised to grow further.   -  Getty Images/iStockphoto

Entry of Spotify and YouTube Music to accelerate growth

The transition from feature phones to smartphones, the data rates being the cheapest in the world, coupled with the fact that Indian consumers spend 21.58 hours per week listening to music (surpassing the global average of 17.89 hours a week), there are a myriad factors bolstering the growth of the Indian music streaming market.

With the recent advent of global players like Spotify and YouTube Music in the fray, the music streaming market is transitioning from its infancy stage and is poised to grow further, according to industry players and experts. Personalisation and localisation seem to be the growth drivers now.

“The entry of Spotify and YouTube Music will further accelerate the growth of music streaming. Last year’s merger of Jio-Saavn was valued at Rs 7,000 crore. With intense competition in the music streaming space, with more than seven active players- Gaana, JioSaavn, Apple Music, Amazon Prime, Google Play, Hungama, Sound Cloud- and the recent entry of Spotify, there will be significant consumer offers leading to increased offtake,” Lloyd Mathias, senior technology executive and former Asia-Pacific Marketing Head of HP, told BusinessLine.

Related news: RIL integrates JioMusic, Saavn to form JioSaavn

Personalisation and localisation

Calling India an important strategic market for Spotify, Amarjit Batra, MD, India, Spotify, identified its personalisation, with its three billion playlists, as one of its biggest differentiators, saying how one of the oft-received comments from its users is about how “Spotify understands them”. Being a market leader in podcasts globally is another that Spotify is banking on to differentiate itself, said Batra.

YouTube Music relies on the YouTube recommendation engine, along with its machine learning capabilities, which enables it to become “more personalised than ever”, said Pawan Agarwal, Head of Music Content Partnerships (India & South Asia), YouTube, about YouTube Music.

The entry of Spotify and YouTube Music will serve to enhance the overall music streaming market, said Jehil Thakker, Partner, Deloitte India. “More people will become aware, engagement and usage will increase, and it will only help alter consumer behaviour towards using streaming more,” he said, adding that he doesn’t see the entry of both these players negatively impacting the existing ones. The extensive local library of the homegrown apps is a reason, he said, as brand names like Spotify is not yet widely known in mass India. Users being on multiple platforms, with the new apps becoming an alternative rather than a replacement, along with the fact that the market is growing significantly, are the other reasons he cited.

However, localisation is already a core focus area for Spotify. “Broadly, 80 per cent of the (music) consumption is happening on local film content, that's why anyone who wants to succeed in this market will have to look at local film content seriously,” said Batra. Keeping this in mind, Spotify has come up with an ‘actor playlist’, which he termed a small way to show how we localised. “I think in the future, you can expect Spotify to break out Indian music around the world,” said Batra.

India is where the multi-lingual music scene thrives, affirmed Agarwal, pointing out how YouTube Music offers music and playlists in 10 regional languages. “Our audio-video toggle feature allows users to look up the actors and watch music videos from the film, while enjoying their favorite Bollywood soundtrack,” he added. “If the ambition is to become a broad, pan- India player, then local content is a necessary strategy in India," said Thakker.

Rapid growth

“The global music streaming market is about US$ 8.9 billion, about double the size of the physical music market. In India too, streaming is growing rapidly and is today the largest chunk of the Rs 850 crore domestic market, accounting for about two-thirds of the market and growing rapidly,” said Mathias. According to a Deloitte report, of the five digital music revenue streams in India- subscription audio streams, ad-supported streams, video streams, downloads, mobile personalisation and other digital- 60 per cent of the revenue comes from streaming.

Meanwhile, closer home, Hungama Music, owned by Hungama Digital Media, sees the advent of these global players as an opportunity. Citing reports, Siddhartha Roy, COO, Hungama Digital Media, stated there are around 150-180 million music streaming users now, and over the next 2-3 years, it will reach roughly 500 million users. “To me, that’s quite an opportunity. It’s not about the clutter today. In mature markets, there are multiple services out there, and in the same way, India is not very different,” he said, pointing out how India has various global services and local services available in the larger Indian context, citing the example of the broadcast medium.

This also makes penetrating deeper into the regional market an important focus point for the company, he added. Being an Indian company, he stated that its focus on regional content has been present for a few years now, with it providing services in over 11 regional languages. Its previous experience in providing ring-back tones and other services to telecom networks enables Hungama Music to provide better curated consumption experiences to regional audiences, he said. Its audio- video format, its reward system based on ‘listen, share and loop’ and its partnership with Xiaomi are some other factors it's banking on.

On which apps in India have adopted the right kind of strategy, Mathias said,“I think Spotify, Apple Music and Amazon Prime Music will leverage their global learnings, library and sophisticated curation algorithms to advantage. However, local players like JioSaavn and Gaana have a great understanding of the dynamics of the Indian music industry, both Bollywood and regional - as well as Indian’s music consuming habits and may have an edge on this score.”


However, the conversion from free users to paying users is still minuscule at about one per cent on these apps, said Mathias. Piracy is another concern flagged by both Mathias and Spotify's Batra. The data cost being high in India until a few years ago was another factor that dissuaded people from making the shift to music streaming, said Batra. The dearth of loyalty or stickiness factor is another worrisome factor in the Indian music streaming space, he said.

Also read: Spotify hits 100-million paid subscribers mark

What are some of the strategies and differentiating factors that music streaming apps can adopt in the changing circumstances? “Over time, consumers get comfortable with apps and the user experience and familiarity is a great advantage for the early entrants. Also, the apps over time with the smart use of AI are able to curate playlists basis consumers choice. Consumers will get sticky with apps who are able to serve them customized music. Apps that do this well and help sharing lists seamlessly with friends will build loyalty and long term advantage,” said Mathias.

Consolidation in the market also has already begun, as affirmed by both Mathias and Thakker, citing the example of Reliance Jio's acquisition of Saavn last year.

Published on May 03, 2019
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