Analyze Product Adoption Life Cycle for Music Streaming services in India
Introduction:
Most streaming platforms offer up an astonishing library of songs, albums and playlists. All of these songs can theoretically be played by every user at one time over the internet, no matter where they are, and no matter what device they are using. From a technical standpoint, streaming works by sending (or, well, streaming) information from a server to an individual player. The actual song exists on the server as a raw file. Raw files are huge and detailed, so they have to be compressed in order to travel over the internet instantaneously. When the stream reaches your device, it will decode the compressed information using an app or plugin.
Until ’90s India relied on radio and televisions and now has over 250 million listeners availing music streaming services. There are around 200 million subscribers of music streaming service apps.
The success of music streaming has proven that listeners do not necessarily prize quality over quantity and convenience. The sheer number of songs available, and the ease of finding and listening to them is the real appeal. And it’s become so popular, that the whole industry has had to reorganize around it: in 2019, streaming numbers topped a trillion for the first time in history, and in March, it was estimated that 80% of revenue from recorded music was generated by streaming.
The major players in audio streaming industry in India are as follows:
The market in India is filled with both home-grown music streaming services such as Gaana, JioSaavn, and Wynk as well as foreign music streaming services such as Spotify, Amazon Music, Google Play Music, Apple Music, etc. Apart from these, there are some indirect music streaming apps as well, like YouTube Music, SoundCloud and more. Market distribution of the music streaming industry is an interesting aspect of assessing the music streaming services market in India. According to a report in musically.com, Gaana captured 30% of the market, which makes it ahead of JioSaavn (24% market share), while Wynk and Spotify are on 15% each, Google Play Music on 10%, and other streaming services combine up to 7% share. It is interesting to see the market share of all these apps is going over 100%, precisely to 101%. This increase in the overall market is because of the overlaps of users among all these platforms.
Where does it lie in the Product Adoption Curve?
According to statistics, music streaming services have crossed the initial stages of innovators and early adopters and falls in early majority bracket of Product Adoption Curve.
Each stage of the Product Life Cycle is typified with a unique set of characteristics. Likewise, different strategies are best suited for the different stages. They are as follows:
Introduction
The introduction phase is the period where a new product is first introduced into the market. This typically requires a lot of resources and finances. The introduction phase is usually associated with slower growth as the public is not familiar with the product, the sellers may not be adequately trained to sell, and clear and definite distribution channels are yet to be established. “Urge to buy” for the product is also immature at this stage.
Growth
The growth phase is when our product starts to sell faster. The public is becoming increasingly aware of your product and word of mouth is starting to spread. The product’s capabilities are now recognised and product development has matured (the rate at which we’re changing our offering slows).
Maturity
The maturity phase is when our product’s sales begin to peak. Demand is strong and the service is now booking out. Very soon, the product will begin to compete with new alternatives being introduced into the market.
Decline
The decline phase refers to the period when the product reaches its saturation point. In this case, the price can start increasing, though the number of sales will decline. In this phase, a decision is needed: whether to continue with the product with significant changes or to move onto another product altogether.
By knowing what phase of the lifecycle we are in, we have identified the general corporate strategy. We can now also identify the prevailing customer group, as defined by the Consumer Adoption Curve. There are five distinct customer groups, each characterized by a set of beliefs, motivations, and behaviours:
- Innovators: They form 2.5% of the total user base of the product. These folks are of age group range 18–25. These users are tech-savvy and they hunt for new product or ideas in the market. They are extremely willing to experimentation with any new product. They write blogs or articles for any new products in the market. A good impression of the product for these users can save lots of marketing money. But on the other hand they are the ones who gets bored easily.
2. Early Adopters: These users form 13.5% of the user base. These users fall mostly in the age group of 20–35. They are visionary and are often called “lighthouse customers” because they serve as a beacon of light for the rest of the population to follow, which will ultimately help the product to succeed. They are prosperous, educated and well respected in society.
3. Early Majority: Group of people who typically wait for feedback from others like early adopters and innovators and read about the product before using. They belong to 26–42 age group and live mostly in Metros, Tier 1&2 cities. This comprises a significant chunk of 34% market. Most of them entry-level or budget smartphone users. Most of them begin using music-streaming apps because of promotions/offers by the service providers.
4. Late Majority: Set of people who always hesitate to adopt new product/technology. Until they are convinced that the product adds value to their existing state, they would not adopt a new product. It’s more of “is it really a need” scenario as they are very little financial lucidity. 34% of the market belongs to this category.
5. Laggards: Group of people who would stay away from a product/tech even if it is successful and are typically focused on traditions. These are the set of people who are technologically challenged i.e., lowest financial fluidity rarely uses smartphones, 70% of people will lives in rural areas where there is inadequate internet facility, far to technology. So still, prefer offline services for their day-to-day needs. These are elderly, use feature phones. This group accounts generally about 16% of the market. They prefer alternative or traditional ways to listen to music like using cassette tapes, CD’s, etc than using the latest technological benefits.
Factors and challenges which affected the rate of music streaming service adoption
The below are the factors affecting the rate of music streaming service adoption,
1. Excessive Marketing and Advertising: Music-streaming companies are conducting campaigns, advertising on radio, TV and online platforms, signing up celebrities as brand ambassadors, sponsoring sports events, sponsoring online web-series etc.
2. Freemium Conversion: Music-streaming companies provide a large variety of free collections which enables most of the customers to access the apps easily and provide better services.
3. Lack of library Collections: Few apps contain very less music collections and able not to support the user with their needs. For Instance, many music-streaming apps provide less collections to the free users, and certain collections will be allowed only for the paid premium users.
4. Rise in Competitions: The rise in the music-streaming industry will enable more opportunities in the industry with more benefits and better subscription plans. This creates a definite competition among the same channel which may affect the growth and sales of the companies.
Growth and product adoption comparison with other music streaming methods
Comparison of various major music-streaming services are shown below,
Growth Hacks
Spotify is the world’s biggest music streaming platform by number of subscribers. Users of the service simply need to register to have access to one of the biggest-ever collections of music in history, plus podcasts, and other audio content.
It operates on a freemium model. Free Spotify access comes with lower sound quality, and advertisements, and requires an internet connection. Those who pay for Spotify Premium can listen uninterrupted to high-quality recordings, and are able to download songs to any device on which they have the Spotify app. Here are some examples:
- Free 1 month subscription (Spotify, YouTube music etc. offer these 1 month free for their paid service)
- Free music streaming with ads (Spotify, YouTube music, Gaana, Hungama etc.)
- Telecom platform play (JioSaavn and Airtel Wynk)
- Package offering (Amazon Prime music)
- Family Offering (Spotify, YouTube music etc.)
Summary
Indian online music space is still in its early adoption phase with users mostly using free streaming options rather than the paid option. This is space which will see growth and acquisitions/mergers and new subscription options being launched. Competition will have to watch for new players coming into this space.
