Global online music streaming revenues in Q2 of this year declined two per cent quarter-over-quarter (QoQ) driven by sequential slump in both paid and ad-based revenues, according to a Counterpoint Research report on Tuesday.
However, compared to the same period last year, global online music streaming revenues grew 13 per cent in Q2 at $6.7 billion, said the report, adding that 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 per cent year-over-year compared to 35 per cent YoY in the previous quarter.
"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," Research Analyst Abhilash Kumar said in a statement detailing the reasons for the decline.
"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 with 26 per cent share, followed by Spotify and YouTube Music with 12 per cent and 10 per cent shares, respectively.
However, in terms of paid subscriptions, Spotify continued to lead with 34 per cent share, followed by Apple Music (21 per cent) and Amazon Music (15 per cent), said the report.
"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," Kumar said.
The findings showed that 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 quarter-over-quarter.
"On the other hand, India's largest platform, Gaana, grew 19 per cent 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," Kumar said.
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.
However, starting June-end, the growth is slowly coming back on track and the traffic has started to rebound, said the report, adding that growth is expected to be back to pre-Covid-19 levels by Q4 of this year.
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