Product Adoption Lifecycle for Music Streaming Services in India

shruti patki
5 min readMar 3, 2021

Until the last two decades India’s urban population was largely dependent on the downloadable media services to access music and videos. However, the past few years have seen a shift, where users are adopting to music streaming services in India. Low subscription offers with ease of access have appealed to the youth of India. With players like Spotify and YouTube entering the market, the industry has seen a stir and the revenue in the music streaming segment is projected to reach US$663m in 2021

Industry Insights:

Revenue is expected to show an annual growth rate (CAGR 2021–2025) of 14.18%, resulting in a projected market volume of US$1,127m by 2025

User penetration will be 4.3% in 2021 and is expected to hit 6.0% by 2025

The average revenue per user (ARPU) is expected to amount to US$11.16

In global comparison, most revenue will be generated in the United States (US$8,669m in 2021)

Top players of the industry include Gaana, JioSaavn, Wynk Music, Spotify, YouTube Premium, Google Play Music and others

  • Market share of top music streaming service providers in India:
Gaana was the most popular music streaming app among Indians surveyed between January and February 2020. JioSaavn followed with Wynk in third place. Of an average 65 minutes spent listening to music, however, Spotify held the top spot during the survey period.

Where does the music streaming service adoption stand today?

With the introduction of multiple players in the market, the adoption of music streaming services has reached the early majority adoption stage, where the user segment driven by the wide adoption of the products is further driven to use them. According to a report by IFPI, 96% of consumers in India listen to music on their smartphones, while 99% of music consumers are aged between 16–24 years.

Source: TechSci Research

User personas of music streaming services in India:

Innovators: Innovators comprise of urban youth between the age group of 18–30, who are familiar with the service of music streaming apps from the west and adopted to try the free and paid versions of the services

Early Adopter: Innovators comprise of urban youth between the age of 24–35 years. These users were informed about services, have financial source and were quick to adopt to try out the services and form opinions about pros and cons of music streaming apps. The early adopters propelled the trend of music streaming apps

Early Majority: This group comprises of age groups 16–40, who follow the trend of set by early adopters and user the services that are popular

Late Majority: This groups adopts the services when the market is established and when they feel the absolute necessity to the music streaming platforms from the traditional platforms

Laggards: This group does not adopt the service until offered a benefit. For example: Low subscription offers, bundled offers (Airtel providing free Wynk subscription through its monthly plans)

Factors and challenges which affected the rate of music streaming service adoption

Growth enablers:

  1. Growing internet penetration: India is in the midst of an internet revolution. With the increasing internet and smartphone penetration rates, access and adoption of music streaming apps has become convenient for the masses. Average wireless data prices have fallen 96% from INR 270 to INR 11 (2014–2020), resulting in a massive spike in data consumption. The average Indian internet user consumes 36x more data per month today compared to 2014. (source: Inc42)
  2. Strong liking of music: Based on the survey of IFPI, 80% of Indian’s consider themselves as music fanatics. The personalized music recommendations given on the music streaming apps appeal to the masses that prefer to listen to their choice of music.
  3. One place for all songs: The wide range of songs across many different regional, national and international languages has led any users switch to the music streaming apps.
source: Inc42

Challenges:

  1. Monetization: Majority of Indians prefer free subscription services. Only 1% of the total users pay for the music subscriptions. While in the early stages, with customer acquisition as focus, music streaming services provide subscriptions for free. However, monetizing the usage of the service in the long term for a large user base still remains a challenge.
  2. Piracy: Stemming from the preference for free content, piracy is still largely dominant in India. This hinders the growth of the music streaming apps, that requires users to at least sign up to use their services

Comparison of top music streaming services:

Indian music streaming market is fast paced and Indians are getting accustomed to these services. Users use one or more than one of these to stream music.

source: Inc42

Spotify growth hacks:

“Spotify is undoubtedly a leading player in the market today. With its late entry in the Indian market, the company faced its share of challenges. JioSaavn was the market leader in 2019, with Wynk, Gaana and Amazon music following the lead. However, due to its strong focus on localization, Spotify soon outgrew Apple & Amazon in terms of MAUs, and slowly chipped away at the dominance of the domestic players in the market. By September 2020, Spotify, with 42.1m MAU, had overtaken Gaana (41.1m MAU) and was trailing slightly behind Wynk (43.1m MAU) and JioSaavn (44.9m). In fact, as Spotify increased its market share, both JioSaavn and Gaana witnessed a decline in MAUs by 28% and 27% from their peaks, respectively, as revealed by App Annie.

Besides capturing a significant share of the market, Spotify has also been able to build a highly-engaged user base in India. Spotify users, on average, spend significantly more time on the app and use it more frequently, as compared to users of other music streaming platforms. In fact, users spend twice as much time on Spotify on average than they do on JioSaavn and use the Spotify app almost 3x more frequently, as compared to JioSaavn, as per App Annie.” (source: Inc42)

Free and low priced subscriptions are also a part of the company’s strategy to acquire users. Low priced plans like INR 7 per day and INR 25 per week are affordable for most of the target segment of Spotify.

With the market in its growing stage and growing customers space, the players of this industry can expect to see a higher shift of the Indian masses towards the music streaming services.

References:

https://www.valuechampion.in/credit-cards/music-streaming-apps-which-one-should-you-choose

https://www.statista.com/outlook/dmo/digital-media/digital-music/music-streaming/india

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