[ad_1]
A red bus is idling down a street in Nairobi, and people are piling it up to find a red music-themed set filled with TVs that play music videos. The local broadcast giant, Boomplay Music, takes some of its most loyal fans to Kenya to Paintball Fury, where they will compete with the Boomplay staff. This release is one of the ways the company uses the users who have made it the most popular streaming music platform in Africa.
You would not know this by looking at a graph of the streaming music industry's overall revenue, where Spotify (a Swedish supplier) and Apple together account for more than half of the market, at 32 and 19%, respectively. But that's because they have captured the US market, which remains by far the largest international market for paid streaming music, recording $ 4.3 billion, against 820 million in China, the second largest market. Now, as Spotify and Apple seek to replicate their success in emerging markets, they come up against a group of local market leaders who use everything from protectionism at dramatically lower prices to try to thwart the wrath of the world. If other sectors, such as online carpool, are indicators, Spotify and Apple may have to copy those of their new competitors to defeat them.
In India, where Spotify was launched in February, it faces JioSaavn and Gaana, local music streaming platforms with 100 and 80 million subscribers respectively. The Swedish firm has registered 1 million subscribers during its first week – but maintaining that momentum will be a challenge, experts say. Whether for electronics, clothing or music, India is a price-sensitive market. To capture the $ 150 million streaming music market in India, Spotify is offering an ad-free monthly subscription of $ 1.67, well below the US $ 9.99 price tag. But that's still six times more expensive than JioSaavn's $ 0.30 a month subscription plan.
Russia, where Spotify plans to launch later this year, will not be easier. UMA Music, founded in 2014, provides music licenses for two major social networks, VKontakte and Odnoklbadniki, and for UMA's own mobile application, called BOOM. These are the largest streaming music streaming platforms in Russia and the former Soviet republics. Millions of people are listening on social networks and about 2.2 million paying subscribers. JOOX, owned by the Chinese company Tencent, controls a lion's share of the music market continuously in the major economies of Southeast Asia such as Thailand (56%), Malaysia (46%) and Japan. Indonesia (34%). In China, of course, Tencent's multiple services control the market.
We are convinced that we can keep our land
Phil Choi, Transsnet Music, owner of Boomplay
And in Africa, Boomplay is the rival that Spotify will have to beat to dominate the continent. The company has the largest library of African music in the world. Launched in 2015 and bought by Chinese company Transsnet Music in 2017, Boomplay now has 46 million users and earns 2 million more every month. Spotify, already in Algeria, Egypt, Morocco and Tunisia, has recently entered South Africa as well – for the time being away from Boomplay, whose main markets are Nigeria, Kenya and Ghana. The two companies know that they will soon have to go to the respective markets, but the leaders of Boomplay say they are ready.
"Competition can be good sometimes," says Phil Choi, head of international acquisitions and partnerships for Transsnet Music. "We are convinced that we can keep our ground."
This confidence does not come only from a beginner's advantage. In Malaysia, Spotify was launched for the first time in 2013, two years before JOOX, but ahead of China's service. In Indonesia, where he entered in 2016, he is not among the top three streaming services. Apple Music was launched in India in 2015, with 99 other countries, at $ 2 per month. This year, the rate was reduced to $ 1.50 for individuals and $ 0.65 for students after struggling to gain ground.
Instead, these local businesses succeed by using strategies tailored to their key markets. In India, besides its low-cost model, JioSaavn – which has offices in Mumbai, Gurugram and Bangalore, as well as in New York and Silicon Valley – produces music content in 17 languages through 1,000 music labels . It has a search function "that includes phonetics with a wide variety of spellings and spelling errors," says Clint Balcom, director of the company's products. As literacy levels vary widely in India and in 22 official languages, these badets serve JioSaavn well.
In Russia, UMA relies on a rare level of social media integration on streaming music platforms. By scrolling through VKontakte or Odnoklbadniki, "you search for news, chat with your friends and the music is always there," says Vera Gorbulenko, director of marketing at UMA. Unlike broadcast services such as Spotify, UMA also allows user-generated content to allow everyone to put their music on the platform. Of course, this creates a lot of noise in the space, but it is also an opportunity for the artists to make themselves known. UMA has seen many musicians become popular in this way – like rapper Allj and artists Rauf & Faik – just as Justin Bieber first gained popularity in the United States via YouTube.
By helping to regularize the music industry, Boomplay has helped fight music piracy in Africa. "There are copyright laws, but regulation is lax," says Choi. "Boomplay has come to the market to solve an industry problem: getting a fair share of artists." Boomplay also runs in-person workshops where artists are taught how to market and monetize their music. "It's added value because we help them grow," says Choi. Like Spotify, Boomplay offers a premium subscription option that costs between $ 2 and $ 4 per month and gives users access to more content and downloads. But unlike Spotify, their free version has no advertising with audio interruption. "Ads use data, and we do not want to share it with our African customers," Choi said. The company also has another plus: Transsnet owns Tecno Mobile, a leader in the mobile handset market in parts of Africa. In Nigeria, for example, Boomplay is downloaded to all Tecno Mobile phones. This represents 50% of the country's market share. Similarly, Apple Music is automatically delivered with iPhones, but these are much more expensive than Tecno Mobile handsets.)
The extension of Spotify could, in some ways, contribute to the professionalisation of the sector in emerging markets. "Five years ago, nobody was interested in Africa, but we think [Spotify] could help the market to ripen, "says Choi. And to be sure, their deep pockets mean that Spotify and Apple can afford to first sketch these issues in new markets. "Spotify holds a large amount of capital that is readily available [for] advertising in new territories, "said James Dyble, general manager of the Global Sound Group in London.
But the opponents they face do not lack resources either. JioSaavn is the result of a merger in 2018 between Saavn, a streaming application, and Jio, the largest telecommunications network in India. In April, Boomplay raised $ 20 million in funding. These companies are now targeting the West as well. JioSaavn has a subscription option for $ 22.45 for six months or $ 38.99 for one year, if you are in the United States. The platform is available worldwide with the exception of their content in English, available only in India, the Middle East and North Africa.
And back in their home markets, local networks are important, says Dyble. "In some countries, streaming platforms have signed licensing agreements with many major labels and publishers, giving them access to more content," said Dyble. "Spotify could have trouble getting similar licenses." Indeed, this fight for licenses has delayed the entry of Spotify in India and the road ahead will not be easy. "There is no doubt [India] is a very difficult market, with a steep learning curve and many peculiarities that are evident only in the trenches, "says Balcom de JioSaavn.
Without licenses for local artists, Western broadcast platforms will struggle – Choi and Balcom confirm that local content is their main driver. "Under the hood, it's an authentic, localized experience," says Balcom.
For once, Spotify and Apple will have to catch up.
***
Thread, OZY's weekly podcast, is back. In season 5, we explore the 1999 American women's football team that created the story, as well as all the athletes, decision-makers and non-advertisers who made their trip possible. Subscribe now to follow Thread sure OZY.com, Spotify, Apple, Himalaya or wherever you prefer to stream your audio.
[ad_2]
Source link
