Product adoption life cycle for Music streaming services in India
The music industry has changed quite a bit over the last couple of decades, all thanks to new technology. With the rise of affordable mobile internet, audio streaming has rapidly gained popularity to become the easiest way to listen to music anywhere and everywhere.
In India, the idea of online music started gaining a foothold around 2006–07, when music companies such as Saregama HMV, T Series and Sony BMG started digitizing their tracks, the online music market also started growing.
Consumption of online music has seen consistent growth during the last 2–3 years and mobile presents itself as an even more exciting domain, which has grown incredibly well. The explosion of smartphones and high speed 2G and 3G connections in urban markets has largely contributed to this.
Revenue in the Music Streaming segment amounts to US$393m in 2020.Revenue is expected to show an annual growth rate (CAGR 2020–2024) of 7.8%, resulting in a market volume of US$530m by 2024.User penetration is 3.4% in 2020 and is expected to hit 4.2% by 2024.According to a report, India’s music streaming market to grow to 600 million users in the next 3 years.
Hottest Music Streaming Apps In India 2020 !
Spotify — After entering India in February 2019, the world’s largest music streaming service, Spotify had hit 1 Mn users in a week.
Gaana — Launched in 2010, homegrown music streaming app Gaana has been leading the market in India along with crossing a 150 Mn users mark in February 2020.
JioSaavn — Following the merger of Reliance Jio and Saavn in March 2018, audio streaming platform JioSaavn came into picture to compete with Gaana and Spotify, claiming a 100 Mn monthly active users (MAU) in October 2019.
You Tube Music — After entering India in March 2019, YouTube Music overtook spotify in terms of gaining quick popularity in the Indian market. The music streaming service recorded 3 Mn app downloads within 3 weeks of its launch exceeding Spotify’s 1 Mn users mark obtained in a week.
Amazon Prime Music — Amazon Prime Music entered India in February 2018 exclusively for Amazon Prime members as part of the yearly or monthly subscriptions.
Hungama Music — Backed by Chinese smartphone giant Xiaomi’s first investment in India, Hungama Music is part of one of the veterans in the Indian music streaming industry.
Apple Music — A music app launched initially to cater to Apple users, Apple Music was launched in India in 2015 and is currently available for both iOS and Android users. The company is going headstrong in India when it comes to revenue growth thanks to its iPhone 11 series and a series of new product launches.
Where does Music Streaming lie in the product adoption curve?
With its inception in 2007, Listening music online is the third most preferred activity of urban internet users in the country, followed by e-mails and social media, says a study conducted by market research firm JuxtSmartMandate.
As many as 97.4 million people in urban India listen to music online which is close to 63 per cent of the 168 million total urban internet users in the country and around 75 per cent of this traffic comes from mobile phones, it said.
According to statistics, music streaming services have crossed the initial stages of innovators and early adopters and falls in early majority bracket of Product Adoption Curve.
Profiles of product adopters
Innovators — Group of people who are early buyers comes under this category. These people read journals and magazines extensively, are more frequently exposed to innovative ideas, and are “techies”, being willing to experiment with anything new.
As per the statistics, 30 % of the online music users are in the age group of 18–24.Most innovators are young individuals like students, young professionals in the age group 18–24 who mostly live in urban and semi-urban localities. These people use music-streaming apps regularly in their daily life while travelling, for relaxing, and trying to keep them updated with the entertainment medias. These people adopt/switch to other products if they are better than the current one.
Early Adopters — Group of people who follow innovators in product adoption. They amount to 13.5% of the market. Most of them if not all, use smartphones. As per the statistics, 42% of the online music users are in the age group of 25–35.Young professionals in the urban, semi-urban areas belong here. They are influenced by early adopters, advertisements etc.
Early Majority — Group of people who typically wait for feedback from others like early adopters and innovators and read about the product before using.As per the statistics, 24% of the online music users are in the age group of 35–45. This comprises a significant chunk of 34% market. Most of them entry-level or budget smartphone users. Most of them begin using music-streaming apps because of promotions/offers by the service providers.
Late majority — Set of people who always hesitate to adopt new product/technology. Until they are convinced that the product adds value to their existing state, they would not adopt a new product. It’s more of “is it really a need” scenario as they are very little financial lucidity. 34% of the market belongs to this category.
Staggers — Group of people who would stay away from a product/tech even if it is successful and are typically focused on traditions. These are the set of people who are technologically challenged i.e., lowest financial fluidity rarely uses smartphones, 70% of people will lives in rural areas where there is inadequate internet facility, far to technology. So still, prefer offline services for their day-to-day needs. These are elderly, use feature phones. This group accounts generally about 16% of the market. They prefer alternative or traditional ways to listen to music like using cassette tapes, CD’s, etc than using the latest technological benefits.
Factors and challenges which affected the rate of music streaming service adoption
Factors -
Internet Service rate. (increase in data charges which the telcos have announced will impact the adoption and the use of the streaming services)
Internet quality . India was ranked 89th out of 149 countries/regions by average internet connection speed and 97th by average peak connection speed.
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,
Music Revenue Challenges: Streaming and Performance Royalties.
Competition from music video streaming industry.
Challenges -
Music streaming can now be seen as a booming market in India but consumers are still reliant on free services. Getting users on subscription plans is the biggest challenge for these companies, according to Counterpoint Research. Conversion from free users to paying users is still minuscule at about one per cent on these apps
The increased mobile tariffs could also be a challenge for music streaming market.
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.
The dearth of loyalty or stickiness factor is another worrisome factor in the Indian music streaming space.
Piracy is another concern.
Growth and product adoption comparison with other music streaming services
With a total app download of 28 million and 25.6 million, respectively, Gaana and Saavn lead this segment, a study said.
They are followed by Shazam, with a base of 12 million total downloads, and Hungama, with a total of 10.9 million downloads, respectively.
However, in terms of active user base, the study found that Gaana, with a user base of 15.2 million and Saavn, with a base of 14.1 million users, are market leaders while Apple iTunes, with 4 million users, is at the third spot in India.
Bollywood remains the top genre, followed by ghazals and other soft romantic music while devotional songs are the third top favorite.
Growth hacks used
The application of network effects in Spotify’s business design is observable in the value of increasing the company’s user base. For example, the benefit of Spotify’s value chain, resources, and capabilities is increased when more artists and consumers join the platform. The company applies the network orchestrator business model by administering its platform as a marketplace where artists and fans meet.
Spotify’s revenues are generated from its user base. The company’s streaming service is available in two tiers: the advertisement-supported free tier and the premium tier. For example, Spotify’s users can access songs for free, but with intermittent advertising integrated into their listening experience. In contrast, subscribers who pay for the company’s premium service can enjoy music without advertisements, along with other premium functions and features that are not available to free-tier users. This business model relates to Spotify’s generic competitive strategy by making the streaming music service available to practically every online person
Unlimited Subscription Business Model. This business model involves two main factors: subscription to Spotify’s premium service and unlimited access to the service. The business design emphasis of this model is on customers’ recurring payments to access value-added services. For example, such value is in the form of Spotify’s premium features, starting with the removal of advertising. The company’s cost leadership generic strategy supports this business model by ensuring attractive affordable subscription prices. Also, the intensive strategies of market penetration and market development support Spotify’s unlimited subscription business model by growing the number of artists and subscribers to keep the business model feasible and profitable.
Summary
Music streaming has been around in India for years now but it came in the limelight especially this year. The reason behind this is due to global services like Spotify and YouTube entering the Indian market and causing a stir among local players in India.
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.
Referance s—
statista.com.
https://en.wikipedia.org/wiki/Comparison_of_on-demand_music_streaming_services.