Global music streaming revenue growth declined in Q2: Counterpoint Research
The decline in Q2 was mainly due to users opting out from subscription plans, and ad revenue also took a hit as companies withdrew ads.
Global online music streaming its first-ever QoQ decline in terms of revenue this Q2, according to the latest data from Counterpoint Research. There was a 2% QoQ decline but a 13% YoY at $6.7 billion in Q2 this year.
The report highlighted how music streaming remained unaffected by Covid-19 in Q1. streaming hours had also increased as people stayed home. There was however a decline in Q2 as users opted out from subscription plans, and ad revenue also took a hit as companies withdrew ads.
“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 Covi-19 pandemic. However, podcasts related to different genres were able to keep people glued, offsetting some of the decline,” research analyst Abhilash Kumar said.
The music streaming market is recovering though and it's expected to return to pre-Covid levels by Q4 this year. According to the report, paid subscriptions also grew 29% YoY compared to 35% YoY in the previous quarter. Spotify continued to lead with 34% market share in paid subscriptions, followed by Apple Music which occupied 21%. Amazon Music comes third with a 15% market followed by Tencent Music, and YouTube Music.
“Strong brand presence, attractive offerings, presence in more than 90 countries, continuous product improvisation and focus on podcasts have helped Spotify,” Kumar said. Spotify announced some major deals with podcasts with companies such as Warner Bros, DC Comics, and Archie Comics. Spotify also expanded to 13 new markets including Russia.
In terms of subscriber growth, Tencent Music led along with its subsidiaries QQ Music, Kuwo and Kugou grabbing a 24% share overall. Tencent Music had a strong lead boosted by social media and its free service, according to Kumar. Spotify took a 12% share while YouTube Music had a 10% share in MAUs.