Airtel's Wynk closure may prompt audio streamers to shift to paid model
Summary
Platforms must also differentiate themselves through user experiences and support for independent artists. Experts highlight the need for exclusive content to attract value-conscious consumers.With Bharti Airtel folding up its Wynk Music app, the audio industry in India is on the brink of major disruption with the market having reached a stage of maturity where it’s turning away from the free model, experts said.
Companies will have to push for paid subscriptions to monetise the business and depend less on advertising. And, as price hikes by YouTube Premium show, greater focus will be required on differentiating one app from another, whether it is product and user experience, payment mechanisms or supporting independent artists creating exclusive content.
“All existing platforms are focusing on subscriptions but what is important is to own your place and identity, otherwise all services shall look the same," said Mandar Thakur, chief executive officer of Times Music. “The need is to stand for something as a brand and demonstrate some differentiation, else why will the customer pay?"
This would mean helping more artists to break out with music that is independent of films, and investing in seamless user experiences and payment mechanisms, experts including Thakur said.
Also Read: Independent music, artistes drive audio streaming in 2023
Spotify has tried to innovate by launching premium features such as Your Sound Capsule, which presents each user with their listening statistics for the year, including the most listened-to artists and songs. It has tried to ease the process of payment by making UPI an option.
“When Spotify launched in India in 2019, our focus was on building our premium proposition such that local consumers would see the value in paying for music," said Amarjit Batra, managing director - India, and general manager - South Asia, Middle East, and Africa, Spotify. “Ever since, we have experimented with local premium plans (the Mini plan allows streaming on one mobile device) and launched seasonal offers so users could upgrade to a better listening experience at affordable prices, including annual offers and trials. Such plans and offers then became common in the local music industry, encouraging more users to pay for music."
Highly competitive
Bharti Airtel said last month it will shut down Wynk Music and transition its users to Apple Music, making the US-based service a larger rival to Spotify, JioSaavn, Amazon Music and others. In India, Sweden’s Spotify led with a 26% share of all streams, according to a report by RedSeer Strategy Consultants as of March 2023.
Also Read: Airtel users to get exclusive access to Apple TV+, Apple Music
Music streaming is a highly competitive business because a vast majority of the supply is controlled by a small group of companies and there is very high competition with limited or no differentiation, said Ranjeet Pratap Singh, co-founder and CEO of Pratilipi, an online self-publishing and audiobook portal.
“Other types of audio streaming services have much better odds because supply is more distributed. The main challenge for audio streaming services is to continue to get high quality content at scale, which can improve user retention. Acquiring customers and monetising them is relatively easy but retention is an extremely challenging problem to solve with high quality and differentiated content," Singh added.
Additionally, Indian customers are value conscious and are happy to pay for a subscription only if they get significantly more value from it than the price they pay, experts said. Music streaming has an audience of about 185 million in India, but only 7.5 million paid for a subscription, according to a Ficci-EY 2024 report.
“Audiences are less likely to pay for content unless it is exclusive to a platform. By ensuring exclusive content that connects deeply with our audience, we are confident that our listeners will continue to have the appetite to pay for the content they will love to consume," said Suyog Gothi, head - India at Pocket FM, an audio series platform.
Also Read: India to add 730 FM stations. So why is the music industry sulking?
However, Gothi added that the subscription model presents significant challenges in India, often hindering growth and limiting access for listeners who pay without enjoying the full library at any given point of time.
The platform experimented with micropayment for content monetisation, hiving off the conventional subscription model, and said both experiments paid off and today complement each other. The approach allows users to purchase coins on the Pocket FM platform to unlock one or multiple episodes of any audio series. The prices vary across markets and are more localised in nature.
“The success of the microtransaction model not only reflects the preference of the Indian audience, but the same has been replicated across global markets, including the US. This flexibility has contributed to the widespread adoption of the model which has become a preferred choice for users worldwide," Gothi said.