Audio platforms bet on freemium models, new plans to grow user base

  • For a sustainable music economy, streaming platforms must turn paid, experts said

Lata Jha
Updated15 Apr 2024
One of the biggest challenges for audio streaming platforms is the widespread availability of free music on platforms like YouTube. (Image: Pixabay)
One of the biggest challenges for audio streaming platforms is the widespread availability of free music on platforms like YouTube. (Image: Pixabay)

New Delhi: Audio streaming platforms in India are witnessing a significant increase in paid subscriptions as they implement restrictions on their free services and introduce new pricing strategies.

With an active user base of approximately 185 million, audio streaming platforms saw their paid subscriber base grow to 7.5 million in 2023 from 4-5 million in 2022, according to Ficci-EY media and entertainment report. 

While platforms such as Spotify have implemented listening restrictions, like not allowing listeners to repeat tracks or go back to previous songs, other companies have introduced family and duo pricing packages. 

One of the biggest challenges for audio streaming platforms is the widespread availability of free music on platforms like YouTube. However, for a sustainable music economy, streaming platforms must turn paid, said industry experts.

When a customer pays, the streaming platforms make money, which is shared with music labels and Indian Performing Right Society or IPRS, a body that works to legitimize the use of copyrighted music by music users by issuing them licences and collecting royalties from music users, for and on behalf of IPRS members, which include authors, composers and publishers of music).

“When music labels make money, they spend more on new content: resulting in film producers (for film music) and artistes (non-film music) making more money. When IPRS makes money, they share with artistes and publishers,” Vikram Mehra, managing director, Saregama said. “To encourage streaming platforms to turn paid, we have agreed to waive off minimum guarantees for those who go fully behind a paywall,” Mehra added.

“There are three ways that we intend to grow our subscribers in the market," a Spotify spokesperson said. "First, ensuring that our new users have trial opportunities so they understand the value proposition of premium. Second, focusing on the right partnerships in the market. In the past, we’ve seen growth based on our partnerships with OEMs (original equipment manufacturers), e-commerce platforms, and even banking brands. Third, ensuring more access to premium through payment gateways and other means,” the spokesperson said. 

The platform that has run premium-centric marketing campaigns, also has several plans, including individual, student, duo, and family, that users can choose from. It is also trying to build premium offline fan experiences and in-app fan engagement with artists and their music, as an incentive for more users to subscribe to Spotify in the future.

An Airtel spokesperson said it is experimenting with restrictions of features (across downloads, ads frequency, hello tunes and others) to drive up paid subscriptions for its streaming service Wynk. 

“We are also bringing artists closer to their top fans by building exclusive experiences for our paid users that give them an opportunity to meet their favourite artists one-on-one, participate in masterclasses and so on,” the person added. 

Wynk has recently organized meet-ups with international artists like Ed Sheeran and Martin Garrix, as well as popular Indian artists such as Jubin Nautiyal, King, Darshan and Nani.

According to a JioSaavn spokesperson, the free tier of audio OTT platforms in India will increasingly resemble Western models with limited user interaction. This includes restrictions on song skips, forward or backward, shuffling, playlist creation, and access to exclusive content.

“Apart from direct subscription and JioSaavn bundled recharges, we are going big on partnerships across automobiles, e-commerce, QSR chains and so on. We have integrated JioSaavn with the vehicles of MG Motor and Hyundai for their customers to enjoy integrated in-car music consumption,” the spokesperson added.

“We have partnered with Times Prime, FlipKart and McDonalds to offer a free trial of JioSaavn paid plans, for the customers to experience our service for free before deciding to pay for it. Further, we have recently launched our family and duo plans, wherein customers can add their family members to experience our premium service."

Meanwhile, several services continue to see value in the freemium model where at least some content can be sampled for free. 

Suyog Gothi, vice-president and country head - India, Pocket FM, an audio series platform said the platform had cracked the monetisation model with its microtransaction approach. “With our freemium model allowing our users to listen to a certain number of episodes daily for free, they can continue consuming more episodes by buying coin packs and redeeming them against additional episodes, thus lowering the barrier to entry." 

"Our microtransaction approach allows listeners to enjoy better flexibility and freedom of choice to decide on the content that they want to consume and pay for, unlike subscriptions,” Gothi added.

The Indian music segment grew 10% to reach Rs. 24 billion in 2023, slower than previous years as certain music OTT platforms went pay and stopped or reduced their free services, according to the Ficci EY report. 

While film music comprised 64% of total music consumption, artist-driven music continued to grow and reached 27% of the total music consumed in 2023. Digital revenues grew 9% in 2023 and accounted for 87% of total music segment revenues

 

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