Global online music streaming revenues declined 2% quarter-over-quarter but grew 13% year-over-year in quarter two of 2020 at US$6.7 billion, according to the latest Counterpoint Research findings. Apple Music saw its paid subscriptions grow 21%.
The second quarter saw the first-ever quarter-over-quarter decline in terms of revenues as music streaming has been gaining strength with every passing quarter. Paid subscriptions grew 29% year-over-year compared to 35% year-over-year in quarter one.
“The growth slowed down in quarter two, and, for the first time, the revenues declined sequentially,” says Research Analyst Abhilash Kuma. “ There are a couple of reasons for the same. The music streaming platforms offered discounts and lowered prices for paid subscriptions to retain consumers or to prevent them shifting to a free plan. Also, advertisement revenues saw a dip since many companies cut expenditure in view of COVID-19. 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 2020 with 26% share, followed by Spotify and YouTube Music with 12% and 10% shares, respectively. However, in terms of paid subscriptions, Spotify continued to lead with 34% share, followed by Apple Music (21%) and Amazon Music (15%).
“The social media platform and free availability of music help Tencent Music maintain the No. 1 spot in terms of MAUs,” says Kumar. “For similar reasons, YouTube Music is also among the top three. Strong brand presence, attractive offerings, continuous product improvisation and focus on podcasts have helped Spotify. Apple Music’s free six-month subscription offering in 52 countries helped maintain its share.”
The music streaming industry was almost immune to the ill-effects of COVID-19 in quarter one. In fact, the streaming hours increased as people stayed at home. Starting in the second quarter, the market witnessed a slowdown in growth, driven by sequential decline in both paid and ad-based revenues. Starting June-end, the growth is slowly coming back on track.
Counterpoint Research believes the growth will be back to pre-COVID-19 levels by the fourth quarter of 2020. The research group’s in-depth “Global Online Music Streaming Market Tracker, Q2 2020” can be downloaded here.
