Analysis on the product adoption lifecycle for music streaming services in India

Adoption of streaming is by far the most significant shift in the music industry in the last ten years — and that’s still ongoing.

Previously when music lovers used to have collection of cassettes and cds .Streaming has already changed the way the music listening operates and the way in which we consume, share and experience music and that might be just the beginning.

Currently majority of music listeners are in the free subscribers bucket as very less people are interested to pay to get ad free subscription. Apart from the free subscribers , there are lot of people who are still very comfortable listening music on radio or you tube. Looking at the current trend of adoption in this industry mostly the users fall in the Early Majority category

Music Streaming adoption Lifecycle

Product Adoption Curve

Innovators : Adopt product in its launch or even pre launch phase.They are the tech enthusiasts who like to explore new technology. Major innovators constitute of :

1. Tech savvy people who loves to take risk and explore new trends in technology. Be it the new apps or gadgets , these people will be the first one to try.
2. Considering the music streaming , these people mostly would be the college goers , music enthusiasts etc.
3. Innovators mostly belong to rich/upper middle class staying in tier 1 cities.

Early Adopters : These type of users usually follow footsteps of innovators.They also tend to use the product in pretty early stages. They would not look for 100 % completed products rather will focus only on the major features. They are mostly :

1. People who are young studying or working individuals.
2. Majorly belongs to tier 1 and some from tier 2 cities.
3. Provides valuable feedback towards product improvements.

Early Majority : These type of people look for lot of reviews and confirmation from fellow friends or family before using it. These form majority of customers around 34%.

1. They mostly look for completed product and positive reviews before going ahead.
2. For music streaming industry , people from tier 2 cities and in age group of late 30's.

Late Majority : Users in this category are very skeptical about any product .Unless they are satisfied or doesn’t seek the necessity of adopting any product , they wont use it.They also constitute 34% of total consumer base.

1. In music streaming industry , these will be people who are not very technology friendly or who don’t like listening to music online.
2. Users in this category mostly belongs to Tier 3 cities and belong to age group of 35-40.

Laggards :These are the people who buy your product after all the hype has died down. Sometimes, laggards purchase a product years after it’s been released.Whatever the reason, these people don’t buy until much later in the product lifecycle. Surprisingly they form 16 % of total consumer base.

1. These are highly skeptical and mostly belong to old age category.
2. Tier 3 city residents with minimal internet access.

Factors and challenges affecting the rate of music streaming service adoption

1. Resistance to opt for paid subscription : Although the penetration for music streaming apps is high among tier 1 and 2 city user base , but majority of them are still using the free subscription . It’s a challenge to convince them to go for paid plans despite the visible benefits.
2. Internet penetration : Is still at 60% in urban masses , hence this is a major factor in deciding the adoption of music streaming services in India.
3. Increase in Data Charges: Recent announcement by telecom companies around increase in data charges will be a challenge to tackle for music streaming companies.
4. Ease of Usage :Many Indian users prefers listening to music over radio or through you tube in their mobiles. They are not comfortable in downloading the apps and operate .
5. Content availability through Piracy : Pirated content is easily available for download and that prevents lot of users to go for these services.
6. Excessive Competition : Over time, consumers get comfortable with apps and the user experience and familiarity is a great advantage for the early entrants.Its difficult to shift this user base for other competitors.

Gaana and Spotify tops charts among music streaming apps

Gaana is the most favored on-demand music streaming app among Indians who generally love to listen to music without paying a fee for it.

According to the latest survey in April 2019 , Gaana emerged as the most favored app (25%), followed by Apple Music (20%), YouTube (20%) and Airtel-owned Wynk (14%).

Recently, Gaana also topped the list of most preferred on-demand music streaming apps in India as per a survey by CyberMedia Research (CMR), which was on changing customer preferences around music.

As per Deloitte report of Dec 2018, there were around 150 million music streaming users in India. With Gaana being used by over 100 million customers every month, Gaana has consolidated its leadership position, the company said in a statement.

Gaana has also grown over 78% outside of India, with its fastest growth coming from the US, Australia, Canada, UK, and the UAE.

Spotify has recently entered in Indian market in Feb 2019. It made headlines by hitting 1 million users in its very first week and later reached to 2 million in a month. .

With only 1% of Indian user base opting for paid subscription, Spotify launched its free tier offering (first of its kind in India) has really hit the Bul’s eye.This has given access to over 50 million songs and more then 3 billion playlists. This has been the most ultimate offering , first for Spotify in any country at launch.

Growth Hacks for Market Leaders in Music Streaming Industry

There are several innovative features launched by Gaana and spotify which made them market leaders.

1. Gaana’s new app provides easy discovery features for the users.They can easily select music of their choice using Personalized music feed.
2. Recent launch of Spotify lite app made it easier for people with low end android device and slow network speed .
3. Providing regional content like Indian , Tamil, Telgu and Punjabi music choices has wooed users preferring regional music.
4. Gaana and Saavn free subscription models give access to whole music library , which has boosted number of users who are ok to listen music with ads but look for more listening content.
5. Features like customizing and sharing playlist with friends or enabling voice search of songs made it really exciting for users to adopt these streaming services.
6. Songs recommendation engine, which works using the machine learning techniques has made it quite easy for users to listen music ,almost 15% consumption on the Gaana platform is being delivered through their recommendation engine.

Summary

The trend of Indians listening to music using music apps is on the rise. “Music consumption in India is undergoing a slow but gradual evolution. In the ‘streaming era’, the way people listen to music is shaping the music industry. Third-party tie-ups and localization are also key areas where these companies can increase their presence in India.

It’s still in its infancy, still being adopted by large parts of the country.

2020 will be a year for an increase in adoption.