India’s Music-Streaming Services : Insights on Product Adoption
India has over 600Mn internet users, with over 200Mn active users of music streaming services. With rising smartphone penetration and falling data rates, the customer base for streaming services is rapidly growing. However, less than 5% of streaming music consumers pay for a standalone subscription, and only 14% for a bundled subscription (e.g. through Amazon Prime). While few users are paid subscribers, estimates suggest that total streaming revenues even today exceed $100Mn, being primarily ad-based.
The top music streaming services in India include the decade old Times-internet backed Gaana.com with 150 Mn MAUs and its closest rival Saavn (Jio-Saavn post the 2018 merger) with 100Mn MAUs. Global players such as Spotify, YouTube music and Amazon Prime music have recently entered the market in 2018–19, while Google Play music and Apple music entered earlier in 2017 and 2015 respectively. With less than 1Mn paid subscribers each in India, they are still finding a foothold in the market.
Using the product adoption curve, we can evaluate the market maturity of paid subscription for music streaming altogether as well as the relative penetration of different music streaming services in India. In the Indian demographic, young 15–35 year olds who are technologically savvy tier 1 and tier 2 city residents typically constitute the innovators, early adopters and early majority. The older demographic of over 35 year olds and vernacular content consumers typically constitute late majority and laggards. Given that <15% of streaming users pay for subscription, the Indian paid music subscription industry has not, strictly speaking, crossed the chasm beyond early adopters onto the early majority. However, in terms of overall active music streaming, local players such as Gaana and Saavn enjoy a late majority level of penetration while global players including Spotify and Apple Music are currently reaching early adopters.
All players operate in a freemium model with monthly subscription priced between Rs. 83.25 to Rs.119, with most players operating at Rs.99/month. While free streaming is supported by an ad-based revenue model, the subscription based content is typically ad-free, and available for offline viewing. Most global players have priced at their global lowest in order to stay competitive in this market. In order to acquire customers, new entrants have often deployed growth hacks including free trials for 1–3 months and competitively priced monthly and annual subscriptions.
Besides, content localisation and offering of vernacular content in multiple regional languages (For example: Spotify signing a deal with T-Series), has also been another growth hack to acquire customers. Moreover, other growth hacks deployed by different players include feature and interface simplification, and introduction of better matching algorithms for user recommendations. Building customer loyalties and driving paid subscription has not been without challenges however. High data costs, low credit card and debit card penetration, and widespread availability of cheap pirated content have all posed challenges in the growth of the local music streaming industry.
To summarise, the large market potential of India’s music streaming industry has attracted many global players over the last five years. In order to compete with the two leading incumbents, Gaana and Jio-Saavn, these new entrants have priced competitively, localised and enlarged content catalogues, and offered free trials. With increasing smartphone penetration, changing user preferences and disposable incomes, we expect the overall paid subscription market to grow further in times to come, de-accelerated slightly by low levels of financial inclusion and widespread piracy.
References:
https://www.cashify.in/top-music-streaming-apps-for-ios-and-android