What is the future of the streaming music industry in your opinion?

Clarification questions:

When you say music streaming, are you referring to recorded or live music or both? – Both

Are you referring to future of music streaming globally or any specific country? – You can take a specific country of choice.

About music streaming industry

Strengths:

High demand – people like to listen to music

On demand is the preferred method vs CDs/ USBs – Better CX

Provides high distribution for music labels

Reduces piracy

Weakness:

Music streaming business is not differentiated at core, no exclusivity

High competition, low margin, Loss making right now – high focus on user acquisition/ retention

Most consumers are used to free music

Goal: What is the future of streaming music?

           Country: India

Future possibilities:

• Ad based revenue model
• Exclusivity based
• Subscription model
• Music labels D2C
• Not alone, via tie ups

Criteria for evaluation: CX, Revenue, Complexity of setup, Retention

Ad based revenue model – Given high usage, this can be a major revenue driver, the model already exist, so not much complexity in refining it further. However, it does not offer a great CX.

Exclusivity based – This is in the direction currently taken by video streaming such as Netflix, Amazon Prime, etc. Artists will create content for specific platforms, which will create exclusivity and improve retention. Will draw higher revenue. Will however require high investment. Also, platforms will have to build relationships with Creators, production houses.

Subscription model – This is  also an existing  model, where for ad free experience users will buy a subscription. Challenge is to increase subscriptions with limited differentiation.  

Music labels move direct to consumer – Top music labels may themselves become online aggregators and distributors. As they own rights to lot of music, they can bring in exclusivity. However, music labels are not specialized themselves in online music streaming business/ technology. May have to partner with someone.  It may get complex for them.

Not alone, via tie ups – It may always remain difficult to setup of music streaming business as an individual entity. Hence the funding for such products may come from tie up e.g. as an added service with Amazon prime membership. Challenge is it will not have its own revenue, hence may not get the required focus/ investment.  

Conclusion:

Exclusivity based model with subscriptions – can provide higher retention, CX. Revenue. Caution is whether users will accept it and switch apps for different music. Focus for platforms will be creation, rather than just distribution.