According to a report by Counterpoint Research, online music streaming subscriptions spiked 35% year-on-year globally in the first quarter of 2020.
The number of subscriptions reached a total of 394 million driven by increased usage as people around the world stayed at home due to the COVID-19 outbreak. Additionally, streaming time on smart audio devices and television grew even as listening hours on Android Auto and Car Play declined amid less commute.
Spotify continued to lead the charts for Q1 2020 with a market share of 30% in revenue terms and 33% in terms of paid subscriptions - that's almost one in every three paid subscribers. Apple Music (25% revenue share and 21% subscription share) is trailing at number two while Amazon Music is at the third spot.
The report indicates that people from the free MAU (monthly active users) universe are upgrading to become premium subscribers. While the acquisition of new users is difficult, it is apparently easy to make them upgrade to paid subscriptions considering the findings that the growth in paid subscriptions (35% YoY) is more than the growth in monthly active users (20% YoY).
Global online music streaming crossed 350 million subscriptions in 2019, and the platforms have been focusing on creating exclusive content with podcasts for a stronger and differentiated play in 2020. A couple of reasons for the growth include promotional offers like free trials and subscription price cuts in emerging markets as well as the growing interest in podcasts.
Spotify’s growth is driven by strong performances in Asia Pacific and Latin America. In a key market like India, for example, Spotify made a big price cut on its yearly plan. It has also come up with a new service – Spotify Kids. Apple Music too expanded to 52 new countries and offered 6 months of free subscriptions there and has been adding new features continuously on its platform.
Source: Counterpoint Research