How Carrier Billing Can Amplify Music Streaming
Music Streaming Market Overview
According to a new report by Grand View Research, the global music streaming market is set to reach USD 76.9 billion in revenue by 2027, at a CAGR of 17.8% from 2020 to 2027.
- User penetration – 8.3% in 2021 and is expected to hit 11.6% by 2025.
- Average revenue per user (ARPU) – expected to reach US $36.81 million in 2021.
- In 2021, most revenue will be generated in the United States – $8,669 million.
- MENA region – CAGR of 21% predicted from 2020 to 2027.
Music Streaming Market Drivers
The growing adoption of digital music services, flexibility and ease of use offered by music applications, as well as the increase of digitalisation are all impacting music streaming growth. Major market drivers include:
- Shift from “traditional viewership to online content consumption” and the availability of large databases of audio and video songs across streaming platforms.
- Growing audience preference for on-demand music services with platforms including Spotify, Apple Music, Tidal, SoundCloud, and Bandcamp.
- Consumer preference – advancements in smartphones and easily-accessed, user-friendly music apps are creating a seamless customer experience.
- COVID-19 – increased usage of OTT platforms during lockdowns. Promotional offers e.g. free trials and subscription price cuts in emerging markets added to this growth, as did an increase in podcast genres on music streaming platforms.
- Music platforms in today’s digital world are not necessarily focused on consumption of audio on its own. Instead, they are often enhanced with “some auxiliary element, whether it be social, visual, discovery, or commercial”.
- The line between social and music platforms is fading. However, for now social media remains a “key digital marketing and audience engagement driver for music consumption on other platforms and not necessarily a medium for consumption in itself”.
The Music Platforms Amplifying Digital Content
Globally, Swedish digital music service Spotify dominates the way in which music is consumed today, listing over 50 million songs and 700,000 podcast titles and uploading 40,000 new songs daily.
- Q1 2020 – 286 million monthly active users (130 million were Spotify Premium subscribers). 2019 YOY – 32% increase in users and 30% increase in subscribers, with a consistent growth rate over recent years.
- Available in 79 markets – Europe is the biggest market followed by North America
- Fastest growth – recently occurred in the ‘rest of world’ segment, which includes Asia. Spotify launched in India in Feb 2019, gaining two million users within its first two months.
- Spotify’s top competitors include Deezer, Pandora and Apple Music.
In the MENA region, Anghami is a leading music streaming service with over 6 million songs in their catalogue.
- Anghami’s target market includes 19 countries.
- The service offers both a free version, and a premium version ‘Anghami Plus’, which has additional features and offline access for a monthly subscription.
- A compelling subscription product has been built through “in-app promotion, localised pricing, and introductory pricing offers to drive acquisition”.
- Anghami have partnered with mobile operators in the MENA region to introduce carrier billing, resulting in increased conversions.
Chinese owned company Boomplay has also shown a rapid increase in worldwide users, “with 75 million users as of June 2020, marking a huge spike in usage in the last two years”. The media streaming download service has “its largest market in Africa, with the majority of its users living in Sub-Saharan Africa”.
2020 – 2021 Music Streaming Trends
Digital subscription services overall value is set to grow by $63 billion from 2020 to 2025. It’s no surprise that the access model (paying for unlimited access at a monthly rate) will continue to be the dominant form of consumption.
- Music artists are driving their own audiences to multiple platforms pre-new-music release – artists telling their own stories, while proactively helping others tell theirs, is the real opportunity for growth.
- Artificial intelligence will continue to shape music discovery, as well as user experiences.
- Voice queries will “allow listeners to effortlessly listen to music that suits their immediate mood or preference without having to interact with text interfaces and toggle through albums or playlists”.
- Video consumption – streaming VOD services like Amazon, Netflix, Disney+ etc. have had a “knock-on effect on what people are listening to on music-streaming services”.
- Consumer listening patterns have changed – less commutes to work, more listening at home, mindfulness, calming songs etc.
- Bundling – carrier billing is being propelled by bundled content providers, for example Spotify has collaborated with numerous operators in Europe, resulting in increased conversions to paid subscriptions.
Why add Direct Carrier Billing as a Method of Payment?
- DCB is a useful alternative for unbanked consumers or those that have access to bank accounts, but not credit cards.
- Juniper Research estimates that 28% of the adult population were unbanked in 2020.
- Carrier Billing ensures the transaction is quick, easy, and secure – “Payments are made in familiar currencies, transactions are simple, and payment is completed using a bill the customer is already paying.”
- Shift to subscription-based models – games, video streaming and music, will be key to the DCB market, with an incredible growth rate of 172% by 2025.
- Put simply; “The more ways there are to pay, the more people will end up paying”.
Music streaming services must tune in to consumer preferences. Trialling features such as in-app promotion, localised pricing, subscription services and keeping in mind consumption trends is key.
With consumer habits changing in 2020 and those habits continuing into 2021, now is the perfect time to increase your revenue streams by adding carrier billing as a simple and secure payment option.
Get in touch with SLA Digital today and enjoy access to new customers, as well as single integration to our catalogue of mobile operators.
You might also like: