Subscriptions take off for audio streaming platforms

In the audio streaming industry, subscriptions play a vital role, a JioSaavn spokesperson said. “Globally, a significant portion of revenue is generated from subscription services. In India, we’ve observed a similar trend, with subscriptions contributing about 70% of our revenue, and we anticipate and aim for consistent growth. While video OTTs are increasingly offering free access, audio platforms are exploring strategies to encourage users to subscribe, the spokesperson added.

According to the latest edition of the Digital Music Study brought out by the Indian Music Industry (IMI), the apex body that represents the interest of music companies, revenues of subscription audio streaming platforms grew 25.5% to reach ₹438.7 crore in 2021 from ₹350.1 crore in 2020 and ad-supported audio streaming income—the free tier of services— rose by 17.9% to reach ₹684.6 crore in 2021 from ₹581.6 crore in 2020. The Ficci EY media and entertainment industry report 2023 said that in 2022, music streaming in India had an audience of approximately 208 million of which the paid subscriber base was just around 4 to 5 million.

Factors such as robustness of the content library, exclusivity and originality of content are critical in driving listeners’ willingness to pay, according to Nishanth K.S., co-founder and chief operating officer of Pocket FM, an audio series platform. Over 90% of the company’s revenue comes from monetizing audio series, while about 10% comes from brand solutions and ads, he said.

As Abhinav Jaiswal, a Hindi film music lover, puts it, audio streaming is the only legal option now to listen to old and new catalogues online without sacrificing modern technologies such as Bluetooth. “Since music in physical form isn’t available anymore, this is the next best option," said Jaiswal, who enjoys how algorithms customize recommendations to suit his tastes. Jaiswal acknowledges that good quality subscriptions are the only way in an age where music economy has moved from one based on ownership of cassettes and CDs to one of access.

“The music industry has made a conscious effort to break out of the shadow of the film industry where soundtrack acquisition costs have anyway spiked. Services are now seeing value in working with independent artistes that the current generation can follow (and like to pay for) and we have to find the sweet spot between that becoming cool and the ease of online payments," Mandar Thakur, chief operating officer, Times Music said. Thakur, however, said overall revenues of music companies may remain low in the short term, but this is the best footing by the industry in a long time. Music has just gained recognition as an asset and while audio subscriptions bundled with other services will play a key role in driving business, cash flows could take a beating for a while with only single digital percentage growth to be seen in revenues.

To be sure, consistent effort needs to be made to educate customers about the benefits of paid audio. “The aim is to free people from piracy and ultimately convert them to go for paid, which is one of the fundamental tenets of the freemium business," a Spotify spokesperson said.

“India is an important market for us to develop new models. We offer personalised subscription plans crafted to suit various life stages, including Premium Student, Individual, Duo that is designed for two individuals in the same household, and Family, enabling up to six accounts within a single household," a Spotify spokesperson said. Spotify observed a 16% year-over-year growth in Premium subscribers.

The pandemic contributed to the growth of audio entertainment in India by aiding awareness among customers, agreed Shailesh Sawlani, country manager, India – Audible, the online audiobook service owned by Amazon. However, as people started returning to offices in the last two years, commute listening picked up again and fueled the consumption of audio streaming services. Audible currently has two offerings for customers - Premium Plus which is the paid membership that includes one credit a month to access global audiobooks and unlimited listening to Indian and global titles for a price of Rs. 199 per month and a free offering that includes podcasts, audiobooks and Audible Originals.

“We witnessed a 39% increase in paid member listening hours on our service in 2022, which showcases the rising demand and popularity of paid audio content in the country. In our experience so far, very often when a customer starts to explore the world of audio, they go on to try a paid membership which in turn encourages us to keep pushing our boundaries to deliver more high-quality, local and global content that will appeal to a wide audience," Sawlani said.