COVID-19 pushes music streaming subs up 35% in first quarter
A new report from Counterpoint Research has found that COVID-19 accelerated the take-up of online music subscriptions around the world.
They spiked 35% YoY in Q1 2020 to reach 394 million subscriptions.
The rise was mostly attributed to people being in lockdown – not only listening to their favourite music but also discovering new tunes.
Services in emerging markets used the lockdown to offer free trials and reduced prices.
There were no break-off figures for Australia, but a June 2020 report by market research firm Roy Morgan found that 12.7 million Australians regularly use a music streaming service.
The interesting aspect of the Counterpoint figure is that growth in paid subscriptions was faster than monthly active users at 20% YoY.
“This indicates that people from the free MAU universe are upgrading to become premium subscribers for an improved experience,” research analyst Abhilash Kumar said.
“This also indicates that it is relatively difficult to bring users into the system, but once they come in, it is relatively easy to make them upgrade.”
Spotify was the dominant company in Q1 2020, with a market share of 30% in revenue terms and 33% in terms of paid subscriptions.
It performed well due to opening up in the Asia Pacific and Latin America regions and introducing initiatives like Spotify Kids, podcasts and playlists for pets.
Spotify was also savvy enough to spot that homebound musicians were hunting for new collaborators around the world and introduced data about similar artists.
Apple Music followed with 25% global revenue share and 21% subscription share after expanding to 52 new territories and six months free subscription in each market.
Amazon Music was up 104% to third place. Its fast growth is attributed to 90 days of free lossless music streaming on its HD arm.
Spotify is also the market leader in Australia, with 8 million users, double that since 2017.
Roy Morgan also put YouTube Music at #2 in Australia (5.5 million) with Apple Music and SoundCloud at #3 and #4 respectively.
In terms of MAUs, globally Tencent Music’s streaming services now have a total of 657 million.
According to Kumar, the lockdown has significantly affected listening habits.
“Radio, news channels and podcasts related to wellness and meditation have grown.
“On the devices side, streaming time on smart audio devices and television grew even as listening hours on Android Auto and Car Play declined amid less commute.”
While it’s not known how much Australian music preferences reflect that of their American cousins, country music has been the biggest winner of the pandemic.
It gained an impressive 13% since restrictions were introduced in March while R&B/hip-hop was down 5.8% and dance/electronic fell 5.9%.
But catalogue music – songs older than 18 months – was on an upswing.