MIDiA has simply launched its annual ‘Music subscriber market shares’ report and dataset, with information for 23 DSPs throughout 33 totally different markets (shoppers can entry it right here). Here are among the key world developments:
Music subscriptions could also be recession-resilient, as China leads the best way
As the world edges in direction of a recession, the music streaming market continues to face robust. Despite indications of slowdown in some markets, the worldwide music subscriber market stays buoyant. Growth, although, is uneven, with quite a few main streaming providers outpacing the remainder, particularly the Chinese ones, which at the moment are setting the worldwide tempo.
Home leisure tends to carry out nicely throughout recessions, not least as a result of persons are inclined to chop down on leisure spend (consuming out, bars, golf equipment, and so forth.), and thus spend extra time at dwelling. In earlier recessions, lipstick gross sales boomed, reflecting their function as an inexpensive luxurious that buyers flip to once they can not afford the dearer luxuries. Music subscriptions have a very good likelihood of taking part in an analogous function within the coming recession.
The early indicators are constructive (subscriber development was stronger within the full 12 months of 2021 than 2020), and although the primary half (H1) of 2022 development was down from H1 2021, this displays the mature state of the streaming market in lots of markets, as a lot because it does world financial headwinds.
The evolution of the worldwide music subscriber market is starting to fork between the main Western digital service suppliers (DSPs) and people in Asia – China particularly so. Nearly all of the main DSPs proceed to expertise robust subscriber development, however none extra so than Chinese DSPs Tencent Music Entertainment (TME) and NetEase Cloud Music.
These had been the important thing developments in 2021 and the primary half of 2022:
- Subscribers: There had been 616.2 million subscribers by the mid-point of 2022, up by 7.1% from the top of 2021. Total internet subscriber additions for the primary six months of 2022 (42.1 million) had been down on the 53.8 million that had been added one 12 months earlier, hinting on the slowing world financial system. However, extra subscribers had been added in 2021 than 2020
- Revenue: The $12.9 billion of subscription label commerce income generated in 2021 was up by 23.1% on 2020, and it was the primary 12 months since 2017 that income development exceeded subscriber development, leading to a 1.0% enhance in world annual ARPU, reaching $22.42
- Spotify: With 187.8 million subscribers in Q2 2022, Spotify remained by far the most important DSP. However, its market share has steadily eroded since This fall 2020, and its Q2 2022 share of 30.5% was down from a excessive of 33.2% in Q2 2018
- Tencent Music Entertainment and NetEase Cloud Music: Spotify’s declining market share has a lot to do with the expansion of the Chinese market (the place Spotify doesn’t function). In This fall 2021, TME overtook Amazon Music to change into the third largest DSP globally, and in Q2 2022 it had 82.7 million subscribers (13.4% market share). China has lengthy been the world’s second largest subscriber market and is on monitor to quickly surpass the US because the world’s largest
- Apple, Amazon, and YouTube: Amazon Music was the fourth largest DSP, with 82.2 million subscribers, and YouTube Music was fifth, with 55.1 million. Both gained share between Q2 2021 and Q2 2022, rising sooner than the overall market. While YouTube and Amazon each gained share in 2022, albeit it at a declining price, second-placed Apple Music continued its long-term pattern of underperforming the market, with its 84.7 million subscribers recording a 13.8% market share, down 1.2% from Q2 2021.
The world music subscriber market is approaching a pivot level, with the slowdown in mature, Western markets contrasting with extra dynamic development in different areas. It is real looking to imagine that the worldwide recession and the natural maturation of the worldwide subscriber market will end in some slowdown of development in 2023, even when the sector stays in any other case resilient.
The slowing development ought to be the catalyst for what wants to come back subsequent, particularly in developed markets: unlocking development pockets by means of differentiation. Western DSPs have managed to develop with largely undifferentiated product propositions. Music rightsholders ought to discover inventive methods wherein they’ll empower their DSP companions with differentiated content material property, enabling them to super-serve particular shopper segments and thus unlock additional development inside them.
If you aren’t but a MIDiA shopper and want to learn how to get entry to this report and information then e-mail stephen@midiaresearch.com