(Photo credit: freepik.es)
Looking back, the launch of affordable 4G plans was one of the biggest turning points for music streaming in India. The market has exploded to more than 7X its size in the last three years.
Each streaming service/app today gives away exposure to a library full of 50 Million+ songs at an affordable Rs.400 for a year. A considerably cheaper option than owning the music tapes/CDs.
On an average Indian listeners spends 21 hours of music a week, which is 30% higher than the Global number. This lucrative number complemented by an expected 500–600 Million online music listeners makes India a hottest market to invest in to.
Putting together the revenue from Indian market by all the online music providers amounts to a $300 Million from 150 Million+ registered users as of today.
On an average consumers spend 21 hours a week to listen to online music through various sources:
(Credit:Nielsen)
The rapidly growing online music industry has several successful online music providers. Take a look at the table below to understand the market share and other factors in the ever competitive online music market.
So far we have gotten the overview of the music streaming industry and for the next section we’ll analyse product adoption lifecycle with one business ”Gaana”.
Since 2010 operational in the Indian music streaming industry, Gaana has a strong foothold banking on the pragmatic approach for Indian music lovers. Backed with $115 Million funding by Tencent China, Gaana has been continuously applying the lessons to stay ahead of the competitors.
As more affordable mobile data plans are driving smartphone penetration in India, we believe growth in the music streaming market will accelerate. By investing in and collaborating with Gaana, we look forward to bringing more innovation and better experiences to all Indian music lovers,” added Tencent President Martin Lau.
A vast and diverse user base in India comfortably accommodating bunch of music streaming apps. While the newer entrants coming in with an understanding of international music, Gaana carves out a niche across regional and Indie music that is at the heart of the Indian music-loving audience. Gaana a 300 people company has plans to keep up the momentum of its success story.
- Leverage the experience of Tencent China’s monetisation model.
- A pragmatic approach to understand the Indian taste.
“Most of our lessons came from China’s music monetisation model.” added Prashan Agarwal CEO Gaana
Being a $60 Million revenue company with a 100% growth in YOY revenue Gaana has hit the correct nerve of the Indian market. Music changes as the states in India, Gaana brought all the varieties of primarily Indian and Global music to one platform. To understand Gaana’s pragmatic approach the regional music contributes to 35% of the total streaming for Gaana.com. Seen a 25% growth in the regional music in past 2 years, the provider has a content mix by Hindi, regional, and international. The content consumption is distributed at 50 percent, 35 percent and 15 percent respectively.
Growth Hacks by Gaana
Let’s understand what gaana has been busy with in order to fetch new users and engage the existing.
- The app remembers recently played track.
- Voice assistant to ease upon the typing efforts and searching music.
- Sing-along lyrics for music lovers to read what exactly they are listening to.
- Freemium/Advertisements and premium models for the new and ongoing users.
- A huge library of regional and devotional tracks to attract the diversity.
- Conducting Gaana exclusive events, this makes existing users feel that their choice to choose Gaana was an appropriate one.
- Buying exclusive rights to tracks, so that users don’t find such tracks elsewhere.
- Very affordable monthly and annual including the student and family plans.
- Curated playlists by top 10/20/50 Bollywood/ English/ All-time and more. This helps users straightaway jump in to latest.
- Using Machine Learning/AI to improve the app experience with frictionless discovery and personalised content and engagement experiences.
- Smart downloads for premium users to favourite track automatically based upon listening history.
- Web version availability brings experience similar to iTunes on desktop.
- Adding more international tracks as the market is growing in India.
- Secure payment gateway integration
- 12 languages support to attract the regional market.
- Vertical video format support for new and popular tracks.
The product adoption analysis
75% of Gaana users are from top 20 metros and remaining from tier III and IV cities. The current Indian music streaming market sizes to 150 Million Active users(AU) and Gaana accounts for 100 Million AUs.
According to Statista the number of mobile phone users in India is possibly around 800 Million and in order for the streaming industry to reach maturity the count should reach to 500–600Million active users. Assuming 500 Million users as Total Available Market(TAM) for this industry and by now we know the total active Gaana users are 100 Million. Gaana’s active users accounts to 20% of the TAM that lets Gaana sit right on the Early Majority stage of the product adoption lifecycle.
Let’s understand product adoption lifecycle curve in detail as to who all are part of it and how it has been laid out.
1. Innovators: Group of Tech enthusiasts, 2.5% of the TAM considered as high risk taker. They keep themselves up to date with the latest trends, technologies are motivated with buying experiments. Most innovators are in the age group 18–25 who mostly live in urban and semi-urban localities. This group uses music-streaming apps regularly and switch to other products if it adds more value.
2. Early Adopters: Group of visionaries that follows innovators. They are 13.5% of the market. Most of them if not all, use smartphones. They belong to 18–30 age group. Young professionals in the urban, semi-urban areas belong here. They are influenced by early adopters, advertisements, campaigns etc.
3. Early Majority: Pragmatists who wait for feedback from early adopters and innovators and rely on product reviews. They belong to 26–42 age group and live mostly in Metros, Tier 1&2 cities. The group is 34% of the total market. Most of them entry-level or budget smartphone users. Most of them begin using music-streaming apps after watching promotions/ offers by the service provider.
4. Late Majority: The conservatives who hesitate to adopt new product/technology. Until they are convinced that the product adds value to their lifestyle. They use the product only if it’s really needed. 34% of the market belongs to this category.
5. Laggards: The skeptics and mostly technologically challenged group of people, prefer to stay away from a product/tech even if it is a successful one. They follow culture and at lowest financial fluidity, rarely use smartphones, people living in rural areas with inadequate internet facility, far beyond to consume the technology. The group has elderly people and use feature phones primarily. This group accounts for about 16% of the market. They prefer alternative or traditional ways to listen to music like using cassette tapes, CD’s, etc.
Conclusion
Gaana is sailing in the market with a steady pace and backed by funds, innovations and future plans to bring more users to adopt their product. Some competitors of Gaana have gone the mergers and acquisitions route as their strategies to overcome Chasm and also the future growth plans. A lot has to be covered in the coming years with a tough competition from the direct (Spotify, JioSaavn, Amazon etc) and indirect competitors (Radio and Video streaming providers) along with spreading the digital piracy awareness to the late majority.
Most global providers are still en-route to understand the Indian listener’s taste and waiting to collect enough data so that their learning from international market can be applied carefully
Lastly to mention that advertisers now know which music streaming provider has better reach and play-time. The streaming providers are enjoying paid/free models for revenue and continuously exploring other growth opportunities like exclusive events, the listeners no doubt are benefitted with access to the gigantic music library and ready to explore the competitors. Music streaming industry in India has 150 million+ unique listeners and one user has registered with more than one provider, which means that they too are exploring the offerings from the providers and not yet loyal to one.
