Music streaming revenues slow down in Q2 2020: Report

Our Bureau Mumbai | Updated on October 07, 2020

Music streaming platforms have witnessed a global slowdown in Q2 2020, according to a report by Counterpoint Research.

Music streaming revenues across the globe declined 2 per cent Quarter on Quarter (QoQ) in Q2 2020, according to the report.

“This is the first-ever QoQ decline in terms of revenues as music streaming has been gaining strength with every passing quarter,” the report said.

However, considering the Year on Year growth (YoY), revenues actually grew 13 per cent. Paid subscriptions grew 29 per cent YoY.

Research Analyst Abhilash Kumar said, “The growth slowed down in the second quarter and, for the first time, the revenues declined sequentially.”

“There are a couple of reasons for the same. The music streaming platforms came up with some discount offers (like free subscription for some months) and also lowered the prices for paid subscriptions to dissuade consumers from leaving the platform or shifting to a free plan.”

“Also, the advertisement revenues saw a dip since many companies opted to cut expenditure in view of the Covid-19 pandemic. However, podcasts related to different genres were able to keep people glued, offsetting some of the decline,” he explained.

Tencent Music, Spotify in the lead

In terms of monthly active users (MAUs), Tencent Music topped the charts in the second quarter with a 26 per cent market share across its subsidiaries QQ Music, Kuwo and Kugou. It was followed by Spotify and YouTube Music with 12 per cent and 10 per cent market shares, respectively.

Spotify also led the market in terms of paid subscriptions with a 34 per cent share, followed by Apple Music at 21 per cent. Amazon Music had a 15 per cent market share in paid subscriptions.

“The social media platform and free availability of music help Tencent Music maintain the No. 1 spot in terms of total MAUs,” Kumar added.

“For similar reasons, YouTube Music is also one among the top three. Strong brand presence, attractive offerings, presence in more than 90 countries, continuous product improvisation and focus on podcasts have helped Spotify,” he explained.

“In Q3, Spotify entered Russia, which gives it an opportunity to tap more than 250 million music fans there. Also, its family plan continues to attract users. Apple Music’s free six-month subscription offering in 52 countries helped maintain its market share,” he added.

Regional brands

According to Kumar, regional players in select countries reported a flat growth. However, in India, the largest home-grown music streaming platform, Gaana, grew 19 per cent QoQ to reach more than 180 million monthly listeners.

“Interestingly, while the listening hours plunged for global platforms, they grew for regional brands due to the presence of local content,” he said.

The music streaming industry has however started to rebound. The report further estimated the growth in the industry to go back to pre-Covid levels by Q4 2020.

Published on October 07, 2020

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