• While the market continues to grow annually, the growth rate dipped on a quarterly basis.
• Average Revenue Per Paying User (ARPPU) dropped 12% YoY.
• Spotify’s revenue remained flat QoQ but grew 14% YoY.

Seoul, Hong Kong, New Delhi, Beijing, London, Buenos Aires, San Diego – October 6, 2020

Global online music streaming revenues declined 2% QoQ but grew 13% YoY in Q2 2020 at $6.7 billion, according to the latest findings from Counterpoint Research. This is the first-ever QoQ decline in terms of revenues as music streaming has been gaining strength with every passing quarter. Paid subscriptions grew 29% YoY compared to 35% YoY in the previous quarter.

Research Analyst Abhilash Kumar said, “The growth slowed down in the second quarter and, for the first time, the revenues declined sequentially. There are a couple of reasons for the same. The music streaming platforms came up with some discount offers (like free subscription for some months) and also lowered the prices for paid subscriptions to dissuade consumers from leaving the platform or shifting to a free plan. Also, the advertisement revenues saw a dip since many companies opted to cut expenditure in view of the COVID-19 pandemic. However, podcasts related to different genres were able to keep people glued, offsetting some of the decline.”

In terms of monthly active users (MAUs), Tencent Music (with its subsidiaries QQ Music, Kuwo and Kugou) led the chart in Q2 2020 with 26% share, followed by Spotify and YouTube Music with 12% and 10% shares, respectively. However, in terms of paid subscriptions, Spotify continued to lead with 34% share, followed by Apple Music (21%) and Amazon Music (15%).

Talking about the top performers, Kumar added, “The social media platform and free availability of music help Tencent Music maintain the No. 1 spot in terms of total MAUs. For similar reasons, YouTube Music is also one among the top three. Strong brand presence, attractive offerings, presence in more than 90 countries, continuous product improvisation and focus on podcasts have helped Spotify. In Q3, Spotify entered Russia, which gives it an opportunity to tap more than 250 million music fans there. Also, its family plan continues to attract users. Apple Music’s free six-month subscription offering in 52 countries helped maintain its market share. Regional players like Anghami in MENA (Middle East and North Africa), Melon Music in South Korea and Yandex Music in Russia reported almost flat growth QoQ. On the other hand, India’s largest platform, Gaana, grew 19% QoQ to reach more than 180 million monthly listeners. Interestingly, while the listening hours plunged for global platforms, they grew for regional brands due to the presence of local content.”

The music streaming industry was almost immune to the ill-effects of COVID-19 in Q1. In fact, the streaming hours increased as people stayed at home. Starting Q2, the market witnessed a slowdown in growth, driven by sequential decline in both paid revenues (people switching from a paid plan to free plan) and ad-based revenues (decline in traffic and companies withdrawing ads). Starting June-end, the growth is slowly coming back on track and the traffic has started to rebound. We believe the growth will be back to pre-COVID-19 levels by Q4 2020.

Our comprehensive and in-depth ‘Global Online Music Streaming Market Tracker, Q2 2020’ is available for download here.

Please feel free to reach out to us at press(at)counterpointresearch.com for further questions regarding our latest research and insights, or for press enquiries.

Background

Counterpoint Technology Market Research is a global research firm specializing in technology products in the TMT industry. It services major technology and financial firms with a mix of monthly reports, customized projects and detailed analysis of the mobile and technology markets. Its key analysts are experts in the industry with an average tenure of 13 years in the high-tech industry.

Analyst Contacts:

Abhilash Kumar

Hanish Bhatia