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Deep dive into the Indian audio streaming industry – Part 1

The Indian audio streaming market grew exponentially in the last couple of years, fuelled by the increased smart phone penetration, cheap data plans, and the proliferation of audio streaming platforms, home-grown as well as international.

In 2021, almost 200 million people did stream music, as per the FICCI-EY report on the media and entertainment (M&E) industry.

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The market today is flush with players of various kinds. Customers are spoilt for choices with a slew of options to choose from – home-grown players such as Gaana, JioSaavn, Wynk, and Hungama to international apps such as Spotify, Amazon Prime Music, YouTube Music, Apple Music, and Resso. Today, India is home to almost 15 OTT audio apps.

It’s no longer about music alone. Streaming platforms are curating unique experiences for users with live events of musical performance, audio books, podcasts, etc. The industry is still nascent with a negligible percent of India’s total population paying for music, prompting streamers to rely on advertisements, brand associations, etc.

In this two-part in-depth series, Adgully delves into the world of the Indian audio streaming market to gauge its potential and growth, the regional factor, as well as some challenges and the road ahead.

Shubh Bansal, VP-Growth, Pocket FM, believes that the audio streaming space has begun its growth trajectory in terms of scale and revenue.

“The audio landscape, which was dominated by music content, has started moving beyond the conventional approach and focusing more on non-music categories, led by exclusive content and engaging storytelling. The future lies in exclusive and engaging content. This is why we believe the industry estimates on audio OTT will increase multi-fold, only to be dominated by audio storytelling against the present perception around the domination of music content. We see this trend shaping up across the globe, and not just to be restricted in India,” says Bansal.

“Mirroring the global growth in streaming, India has seen increasing traffic towards audio OTT platforms, driven by an increase in smartphone penetration and low data rates. The penetration of music services to tier II and tier III cities, along with an increasing subscriber base of internet users, suggests that the scope for growth for audio streaming consumption remains large also as emphasized by the increasing competition in the audio OTT industry with players like Spotify, Amazon music, Gaana, Jio Saavn, wynk, etc,” says Vishal Chinchankar, CEO, Madison Digital and Madison Media Alpha.

There has been consistent growth in consumption for the last five years, points out Divo Founder-Director Shahir Muneer. “The growth has been multi-fold, and streaming revenue is the primary revenue source for any label or artist today without a doubt. This will continue to be the key area for further growth too. However, there lie multiple challenges of mainly very low and slow subscription revenue/ growth, video OTT and short apps having a larger audience/market and higher growth,” he adds.

The regional surge

There is immense growth in the regional-language music space.

Audio/ music streaming has been on a steady rise in India, thanks to the rise in digital consumption, led by increased smartphone penetration and low-data tariffs, says Shailja Saraswati, Chief Content Officer, Omnicom Media Group – India

Citing a recent industry report, Shailja Saraswati noted that Indians actively listen to 22 hours of music weekly – that is, 3.5 hours more than the global average.

She further says, “Looking at the data up close, about 83% of that time is spent on consuming local content, whereas the global average is 49%. Regional music (Tamil, Bhojpuri, Punjabi, Bengali, Malayalam and Telugu) is massively popular in the growth areas and there is also growing customer interest in retro music and podcasts. In conclusion, India’s music industry is seeing an upward surge and is well poised for growth, expected to grow by 15% annually, up to Rs 2,800 crore by 2024.”

According to Sidharth Singh, Co-founder, CupShup, the Indian audio streaming market is just scratching the surface. It has huge potential and the early signs are highly encouraging. Standing tall on the troika of young generation, cheap data and smartphone revolution, India is set to take a giant leap which the developed world has already taken. The pie which was looking big for a nation obsessed with its movies and music is looking even bigger with entry and adoption of newer players in the genre of stories, podcasts and audio books.

Paid or not paid

Is Indians’ love for free content taking a toll on the audio streaming industry? Due to the plethora of free audio streamers, only three million people purchased music subscriptions in 2021. Which means the segment will remain advertising-driven. How can audio streamers sustain through innovation?

Shubh Bansal disagrees with the premise that Indians are averse to paying for audio. “This is a complete myth that Indians are reluctant to pay for audio streaming. Not only Indians, but any global consumers will have issues paying for content that’s available freely on other platforms. Hence, exclusivity to the content holds immense significance in convincing consumers to pay for any piece of content,” he affirms.

Besides exclusivity, Bansal believes the listening experience that any audio streaming platform offers adds to the pricing pitch and also understanding of the correct pricing for the content holds equal importance. “We have ourselves explored multiple models before we discovered our content monetisation model. We realised at an early stage that we needed to lower the entry barrier, considering we are creating a new category in the audio streaming landscape. Hence, we understood the subscription model as a possible roadblock due to its high ticket size and longer lock-in period. This is the reason we have pioneered a micropayment module, built in-house, with aggressive pricing that encourages our metro audiences and also our listeners from Tier 2 and 3 geographies, to pay for our audio library,” he adds.

Speaking about Pocket FM’s performance, Bansal says that its monthly revenue grew over 350% QoQ since it launched micropayment in February this year. He is bullish about the company’s content monetisation approach as its revenue has grown approximately 10X in the past six months.

“The consumption on our platform is facilitated through in-app coins that can be purchased from Rs 9 onwards. These coins are then used to consume one or more episodes of our fiction series and buy audiobooks from our library. In addition, we have recently rolled out our advertising solutions that are further expected to provide impetus to our revenue,” says Bansal.

(Tomorrow: The challenges faced by the Indian audio streaming industry, cost of content, in-stream audio ads & other growth areas, the podcast factor, and more.)

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