Online Music streaming in India

Introduction:

The previous decade saw a surge in the number of music app downloads owing to the massive internet penetration in India. The number of internet users in India is expected to cross 735 MN by 2021 with almost three quarter of them consuming content in Indian languages. Affordable smartphones and even cheaper data costs are the two major catalysts in this boom.

The surge in vernacular content consumption has benefited the popular music streaming giants to establish their pertinent presence in India. The online music streaming industry today has several players. there are primarily two Indian music streaming companies Jiosaavan and Gaana. The rest of the music streaming companies are the usual suspects in the music streaming industry, spotify, amazon music, youtube and Youtube music et al. By the end of 2019, homegrown music streaming app Gaana crossed 150 Mn users mark. Jiosaavn has more that 100 Million Users.

A pie chart of how Indians consume music.

As shown in the pie chart above only a small proportion of the current user base, ~13%, is actually paying for audio streaming. There is obviously tremendous potential for the growth of this industry, below is a graph that shows expected growth of online music streaming in India

Growth of Music streaming in India (In Million USD)

The Music streaming industry should be able to capture a large part of the Paid/ Purchased music consumption and by providing better quality of service. They would also be able to tap into a substantial share of YouTube music consumers and radio music consumers by providing better service.

Status of online music streaming in the curve.

Stages of adoption of products

Considering that between JioSaavn and Gaana alone, the number of people using the service is 250 Million Active users, it would be fair to say that the online music streaming is in the early Majority stage and has cleared the chasm. Assuming a population of 1.3 Bn, and assuming roughly 75% of indian population is above the age 15 ( an age after which I would assume people would like to listen to music via music streaming apps), there is an existing market of about 900 Million users and roughly 300 Million have already started using the service.

User Profiles of people using the online music streaming service

Innovators: The innovators in the music industry would have been college going or young, tech savvy men. A study of a similar product in the US showed that the initial adoption was largely from college going men. They are more willing to use new technology products

Early Adopters: These can be people in the age group of 22- 35 (men and women). People largely living in Urban middle and upper middle class, who are comfortable making online payments. They are reasonably tech savvy but would like to see the product in the market before deciding to start trying it

Early Majority: Early Majority is likely to be whole of urban population and people belonging to the higher strata of the society in the rural areas. this early Majority in the urban areas are expected to include people from all age groups.

Late Majority: As the penetration of internet improves and the internet speed improves in the rural areas. The music streaming apps will get popular with people of all the classes, genders and age groups in the rural areas as well. These apps would replace radio stations as a source of entertainment. these are also people who would require help from the younger tech savvy people to install an app, show them how to select songs .

Laggards: There is will be those set of people who are not willing to pay the money and are comfortable listening to the music on radio or TV music channels. Those are the laggards of this product

Factors and Challenges in expansion of music streaming in India

1. **Inexpensive smartphones**: One of the key reasons for the proliferation of apps in general and the music streaming industry is that the smart phone, once a privilege of the elite, is not ubiquitous. Once the masses start getting access to the hardware that enables the expansion of products, the path to mass adoption became a lot more easier
2. Increased internet penetration: As India invests more into its infrastructure, high speed internet accessibility also improves, allowing the masses to exploit the full potential of tech products, without feeling frustrated about long buffering time.
3. Cheap internet data plans: Thanks to the fragmented telecom market in India, telecom companies have been making data plans extremely cheap, making it easier for even people from lower middle class household to purchase internet plans.
4. Love of music: Listening to the radio and requesting the RJs for music has been one of the favorite pastimes of the masses in India. The general desire of people to listen to the song they want and not having to wait for it is a strong appeal that is further driving the expansion
5. Uninterrupted music: Radios and Television channels are notorious for inserting a lot of ads in between the content. Even YouTube inserts ads in the middle of their content. There is a set of user base that is willing to pay for not having ads disrupt listening to music.

Challenges

1. Tech knowledge gap: the middle aged and Older Rural population is still not very comfortable using the smartphones. This may lead to a significant portion of the rural population not quickly adopting the product.
2. Price Sensitivity: As there are other platforms like YouTube that offer to play songs for free, the price sensitive Indian consumer may not want to subscribe to the service. There may be a large segment of consumers who may be content listening to the radio or television or storing songs on their phone.
3. Dealing with diversity: India has myriad of languages and a large proportion of the population only speaks one language. Having to deal with several languages and having adequate content to cater to the needs of vernacular language user base can mean interacting with several different entities to get content on the platform. This may be challenging.
4. Account Sharing: If there is no cap on the number of devices that can stream from a single account, one account may be used by several users, cutting into the revenue of companies.
5. Piracy: ~9% of the users watch pirated music which is a cause of concern for the industry. It cuts into revenues of the industry.

Comparison between music streaming services

Below is a comparison of the major online music streaming services in India. ( courtesy- firstpost.com). Price wise , the indian services have been the most aggressive with pricing, in that the yearly subscription fee is only Rs 299. Most other platforms only have a monthly plan. Almost all the services provided offline download of a very large number of songs.

Growth Hacks

Local online music streaming companies like Saavn and Gaana took a number of steps to grow rapidly

1. Price: The annual subscription of Gaana was dropped from Rs. 1000+ to Less that Rs 200. This drove up adoption
2. Personalization: Companies like spotify boast of having over 3 billion playlists, providing the ability to personalize the experience users have, thereby improving adoption of the service
3. Localized content: These music streaming companies have invested heavily in localized content in vernacular languages. According to Hindubusinessline.com almost 80% of the content consumption is local content and therefore any company that wants to be a major player would have to invest significantly in getting local content onboard.
4. Toggle feature: YouTube provides a feature to toggle between audio and videos,

Sources

1. https://soundcharts.com/blog/india-music-market-overview#indian-music-industry-stats-indias-digital-revolution-by-the-numbers
2. https://thenextweb.com/in/2020/02/07/indias-streaming-music-market-is-now-200-million-strong-but-hardly-anyones-paying-for-it/
3. https://www.firstpost.com/tech/news-analysis/apple-music-vs-gaana-vs-jiosaavn-vs-youtube-music-the-indian-music-streaming-market-is-heating-up-6248861.html