Global online music streaming subscriptions grew by 32% year-on-year touching 358 million in actual terms in 2019, driven by the availability of exclusive content such as podcasts and originals that is attracting people towards the platform and eventually turned them into subscribers, a report by Counterpoint Research says.
Research Analyst Abhilash Kumar says paid subscriptions grew 32% compared to 23% year on year suggesting that “people are ready to pay for music streaming for a hassle-free experience. However, this is not completely user-driven. Music streaming platforms are following a two-step approach to gain subscribers, first registering them to their platform as free users by means of excellent advertising campaigns and secondly pitching them with attractive offers to transfer them to become paying subscribers.”
Also, promotional activities like price cuts in subscriptions in emerging markets, bundled offers from telcos added to the growth. We expect that online music streaming subscriptions to grow more than 25% YoY to exceed 450 million subscriptions by the end of 2020, says the report by Counterpoint Research.
Spotify topped grabbed a 31% share of the total revenue and a 35% share of the total paid subscriptions. The runner up, Apple Music stood at 24% share of total revenues in the industry and a 19% share of the total paid subscriptions. Due to Apple’s high focus on its services segment which includes Apple Music, its subscription base grew 36% YoY in CY 2019.
Amazon Music subscriptions reached a 15% share in 2019 compared to 10% in 2018. Tencent (11 percent) and YouTube Music (6 percent) were close behind with the remaining 14 percent split between regional giants like India’s Gaana and Russia’s Yandex Music.
Counterpoint predicted that streaming music would grow another 25 percent in 2020, but it also warned that the COVID-19 pandemic might hurt. Habits are unsurprisingly skewing more toward radio and TV news, and that leaves fewer people willing to subscribe to services meant chiefly for entertainment.
What’s common is that both the regional and global players are focusing a lot on building exclusive content. Acquiring podcast companies and creating their own channels are all being undertaken. It’s often exclusive content that drives paid subscription growth.
More than 80% of music streaming revenue came from paid subscriptions. The rest came from advertisements and partnerships with brands and telcos. Therefore, increasing paid subscriptions is of prime importance for music streaming platforms.