Audio streaming apps resort to partnerships for subscription

Audio streaming service providers have the arduous task of generating subscription revenue from an audience that has for long taken music to be a free commodity in India. To woo customers, streaming platforms like Spotify and Gaana have begun to go the video streaming platform way, with bundled offers and discounts through partnerships.

Spotify, for instance, has partnered with Citibank and Flipkart to offer discounts on subscription plans. Airtel subscribers can now avail YouTube Premium (including YouTube Music Premium) for three months for free. Meanwhile, Flipkart Axis Bank credit card customers can get access to 15 months of Gaana Plus at a discounted price.

The strategic bundling of video streaming subscriptions through telecom operators was an inflection point for the industry, with multiple offers in the offing. Telcos used this to increase data consumption, as video streaming is a data guzzler, and streaming services could reach the wide database of telecom customers.

As per a KPMG study on the media and entertainment industry, the Indian audio streaming market comprises 200 million monthly active listeners, of whom just 1% are paid subscribers. “The greatest challenge to growing subscriptions for streaming platforms is that users have a plethora of free streaming options to choose from. And piracy is rampant,” said Ajay Gupta, lead partner, communications, media and technology, AT Kearney.

In its quarterly report, Spotify announced that its marketing campaigns in India have helped add subscribers during the July-September quarter. “Through our partnerships, consumers can integrate Spotify into their other experiences,” says Akshat Habola, head of market strategy and operations – India, Spotify. The service plans to further localise its strategy for India through content, subscription plans and commercial partnerships.

Subscription plans for these platforms are diverse and specific to the needs of consumers. “We have identified that listeners have different priorities. Some may just want an ad-free experience while others may want high-quality audio and the facility to download music. So, we have decoupled these benefits,” says Prashan Agarwal, CEO, Gaana.

As a result, one can opt for an ad-free experience for a fee of just `10 per month or pay `99 per month for the Gaana Plus membership that allows unlimited downloads and HD quality music streaming. Spotify, on the other hand, has 15 different subscription plans, including ones for students, families, prepaid consumers, postpaid consumers, and Duo for two users. As per Spotify’s latest quarterly report, the rollout of Duo has given impetus to its subscriber growth globally.

Student plans, which are significantly cheaper than individual plans, are expected to build habits among the youth who could then move on to other subscription plans. However, Gupta says that giving the consumer too many options may lead to confusion, resulting in people not making a decision. The forecast is that as the market evolves, these options will reduce.

Finally, content, too, is playing a pivotal role in acquiring subscribers and higher revenue. “The quest for higher volume is one of the reasons music subscription services are buying podcasts. These can not only help increase user engagement, but also create new avenues to boost ad revenues,” observes Rajib Basu, partner and leader, entertainment and media, PwC India.