Mapping The Market: India’s Online Music Streaming Landscape

Mapping The Market: India’s Online Music Streaming Landscape


India's recorded music industry combined with TV, radio and films is currently estimated to be worth INR 8,660 Cr

Latest figures show that over 200 Mn consumers in India listen to music on online streaming services

The biggest challenge remains monetisation as Indian audiences are habituated to having ads with music

Just like video consumption, the Indian music industry has changed drastically over the past few years, and it’s hard to recall the time when FM radio was the only avenue for millions of Indians. These days the Indian market is chock-full of music streaming platforms and more are being launched with each passing quarter.

Over the years, digital music formats have taken over the Indian market, which was once heavily reliant on physical media such as cassettes and compact discs. The key change came in the form of MP3 players, soon after the iPod was launched, and then smartphones became more powerful and allowed consumers to take entire catalogues with them. As the music recording industry extended partnership with television, radio, live events, films and digital platforms, the market size burgeoned to INR 8,660 Cr in 2019.

Availability of low-cost smartphones, cheap data packs, deeper internet penetration and millennial generation craving entertainment on the go, has pushed boundaries far open for the digital music industry in particular. Latest figures show that there are now 200 Mn people in India listening to music on streaming services.

Between 2018 and 2019, key international players such as Spotify, Amazon, and Apple have marked their entry into the Indian music streaming OTT industry. The most recent entrant is Resso from TikTok owner ByteDance, which is experimenting with social interactions within the streaming app. The feature called ‘vibes’ allows users to add their own GIFs, images and videos to songs, which will then be seen by others.

However, Indian music streaming players have an upper hand on their international counterparts. With 550 Mn+ subscribers together, local music streaming giants Gaana, JioSaavn, Hungama, Airtel Wynk Music and others have undoubtedly taken the lead over popular global players like Spotify, YouTube Music and Apple Music.

India’s Music Streaming Landscape

India currently has roughly 15 music streaming players comprised of Indian and international companies. The ratio of local to international players is almost equal. Of late, video streaming OTT platforms such as Zee5, Hoichoi, Gemplex, Addatimes, JioCinema, and Tata Sky Binge+ has also joined the bandwagon. But music is not the core offering for these platforms.

Regional Languages Are The Key Focus

The focus is primarily on tapping the vernacular or regional language listener base for most. A few like MusicIndiaOnline and TimesMusic are also eyeing segments such as folklore but that’s not in the core music category. Many of the Indian apps are tapping the rural talent base of the country. Most local players now offer all key regional languages with Hindi, English, Tamil, Telugu, Punjabi and Malayalam the top ones. Among the international players, Apple Music offers music in the least number of regional languages.

Creating Visibility Is Tough

One of the key challenges for streaming platforms is the limited reach. While many of the top players have great brand visibility, the same cannot be said for roughly 50% of the market. A striking contrast is seen between Gaana and Raaga. Both launched around the same time, yet Gaana has scaled to over 150 Mn monthly users, while the latest numbers show just 7 Mn+ monthly active users for Raaga.

While YouTube Music is an exception here, other international players are finding it hard to surpass popularity of Indian players. Spotify said 2 Mn users signed up in India in the first quarter and has a global user base of 271 MnYouTube Music said it gained 3 Mn subscribers in the first week of its India launch.

Mapping The Market: India's Online Music Streaming Landscape

Monetisation Is Still Tough

Both local and international players are in the same boat when it comes to monetisation through users. The availability of unlimited free content (with ads) has dominated the Indian market and the price-sensitive audience is not ready to pay just for ad-free music. This can be traced back to India’s love for FM radio, which is essentially a free service supported by ads. Indians are more than used to having ads run alongside music, and this hurts the monetisation prospects of subscription-driven platforms.

A key factor in converting users is the ability to download songs or take music offline, which is what YouTube Music and Spotify have capitalised on. As of December 2019, YouTube claimed 800K subscribers, while Gaana has 1 Mn paid subscribers.

While a few of the players are determined to monetise on the basis of subscriptions, in essence, all platforms are primarily running on deep pockets and advertising revenue.

Mapping The Market: India's Online Music Streaming Landscape

Bundling Is The New Strategy

Apart from music, a major impetus is also seen on offering internet radio, live radio, podcasts and broadcast radio channels on the platforms along with other added features such as lyrics with live syncing for karaoke, exclusive content and artist originals. Just like originals are becoming a major selling point in the video streaming industry, internet radio and live radio segments are getting wide traction in the music streaming market.

Music streaming giants are also partnering with other technology products and services for content distribution partnerships. For instance, Gaana has partnered with Uber and Zee Music, while Jiosaavn has a tie-up with Snapchat. Similarly, Spotify is integrated into the likes of Tinder.

Mapping The Market: India's Online Music Streaming Landscape

The Future Of Music Streaming

Considering that the Indian film industry is valued at $ 183.2 Bn, it is the key driver and producer of content for music streaming platforms in India. Moreover, India’s film industry is vast in terms of regional languages, so there is no dearth of quality content for listeners. Yet, one of the biggest roadblocks for music streaming companies in India is monetisation. With respect to other global markets, the revenue for the music streaming industry in India is far on the lower side.

According to research firm Statista, with a market volume of $4.5 Bn in 2019-20, most of the music streaming revenue is generated in the United States. In comparison, India generated $244 Mn in revenue, which is roughly 5.39% of US.

Players such as Gaana, JioSaavn, YouTube Music, Hungama, Amazon Prime Music and Spotify are continuing to scale through deep pockets and millions in funding. While others such as Eksur, Grooveshark, RediffMusic among others had to wrap up their operations after years of struggle.

New-age millennials are not hesitant about spending money on conveniences and have a varied taste in music genres. This audience remains the biggest hope for monetisation for most of the music streaming platforms.

Internet radio, podcasts and live radio are becoming rising trends which will bring another phase of revolution in the Indian music streaming industry. In particular, podcasts in regional languages could be the big differentiator going forward.

Adoption can be driven through feature and technology integration such as AI-based recommendations and personalisation along with regional language content strategy, but building a sustainable revenue stream with paid subscribers will be a hard nut to crack for music streaming in the Indian market as long as free options exist.

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