From Spotify to YouTube Music, audio OTT brands look to perfect the pitch

Small sachets, daily subscriptions and bundled offers, Spotify, Amazon Prime, YouTube, Gaana are going all out to woo mass audiences

Long trapped in a vicious circle of piracy and big Bollywood studios, the music business is breaking free of its shackles under sustained push from the growing band of audio over-the-top (OTT) brands. Keen to muscle their way into the multi-lingual listening routines of audiences with varying tastes, Amazon Music, Spotify, YouTube and local players Gaana, Jio Music and Hungama are using data and technological innovations to package their music for audiences across age and income groups. But as they do that, the big challenge will be differentiating the listening experience even as they spin their music from a common spool.

“In India, we've customised our pricing for two reasons. First, the consumer is value conscious, and second, India is yet to transition from a largely piracy-based market to one that streams music legally,” says Amarjit Batra, managing director India, Spotify.

The Indian music market holds out huge potential. A recent report by Deloitte (Economic impact of music) estimates the valuation of the audio OTT industry in India at Rs 2,700 crore and its annual revenues at Rs 270 crore. Experts say that audio OTT brands expect the market to grow from 150 million users now to 400 million users over the next two years. While there is ample room for growth, the brands are also conscious of the need to keep an unrelenting eye on affordability.

The market has shifted significantly from earlier years  as says Siddharth Roy, CEO, Hungama that was one of the early investors in the business, “The Indian consumer today is comfortable with streaming music. Increasingly, this consumer is opening up to the idea of paying as well.”

However, the other challenge is classifying the Indian customer. Music is accessed in many languages. Also listeners are fickle, switching between brands while seeking a cheap entry into the ecosystem. The apps therefore have to offer a wide variety of packages; on Spotify there is a free (ad driven) or a subscription (ad free) model that is further sliced into daily, weekly, monthly, and annual plans, starting from as low as Rs 13, Batra said.

At Gaana, where CEO Prashan Agarwal says, subscriptions have boomed under increased adoption of digital payments, there is significant experimentation with innovative monetisation models. “I feel the Indian consumer is not price-conscious, but value-conscious. If we’re able to deliver significant value for their money, they will be more than happy to sign up,” he says.

 All OTT brands are using data to profile their listeners. Agarwal says, “Data goes a long way in evaluating our business decisions. For example, we know that more than 80 per cent of our listeners listen to music in two languages. We curate language packs and target those segments,” he adds.

That Hindi is not the only language spinning the music tracks for Indian listeners is well known. However the data sets gathered by the audio companies helps them classify audiences more finely. For instance, Bhojpuri audiences tend to be single-language users while the rest are largely two-language listeners. The South Indian languages make an easy combination for most too.

Regional music also helps build up content at a fraction of the cost of building the Hindi music library. Many are also looking at launching new artists in different languages. Agarwal says that this is a good way to offset costs of acquiring Hindi film music, which still has the largest share in the consumption pie.

Apart from advertising, the platforms are also looking at monetising their libraries and product assets through brand partnerships and sponsorships. Hungama for example has branded playlists where a product or service is integrated into the playlist. Others use podcasts for the same.

“We do see immense potential in the podcast domain. According to a global research  in 2018, half of the podcast listeners said that podcast ads are more relevant, seamless, or entertaining. In India, maybe it's a bit early, but yes, we've had brands and advertisers show interest,” Batra says.