A million streams every 3 minutes, but only 5% of OTT audio users pay for it

• The audio OTT industry has 8 million active subscribers, but only around 5% of them are paid subscribers.
  
• Vernacular music now accounts for 34% of all streams with Punjabi songs heading the pack.
  
• Spotify is the OTTA market leader capturing over a quarter of all streams in FY23.
  

Indians have streamed a million songs or audio files every three minutes on OTT (over-the-top) platforms in FY23. Not only did the OTT audio market grow by 1.6 times from FY20, the pandemic years also added new users, as per a report by Redseer.

“The Covid pandemic witnessed during FY21 and FY22, accelerated the growth of OTTA, adding more than 50 million music listeners, not only from the young age group but also among the people with more than 40 years of age,” said Ujjwal Chaudhry, partner at Redseer Strategy Consultants.

The audio OTT industry has around 8 million active subscribers. However, only around 5% of the monthly active users are paid subscribers. The rest rely on ad supported versions to stream their audio files online.

“Most of the subscriptions purchased by users have been for three-month packs, followed by one month. As the diversity of packs grew with one-day, one-month and student packs, subscribers have continued to grow,” Redseer report said.

The average revenue per user has been around ₹60-70 a month. However, the share of subscription revenue has grown from 37% in FY20 to 48% in FY23, Redseer says. Also, most of the new paid subscribers are coming from top 10-12 cities.

Natu, natu plus Punjabi pop

Thanks to digital maturity growth in smaller cities and more regional label partnerships, vernacular streams have shown the fastest growth in three years. Vernacular music now accounts for 34% of all streams.

“Within vernacular, the South Indian market has witnessed a surge in both user base and engagement in the last 2 years attributed to the growing number of blockbuster movie releases and high growth in players like Spotify,” the report said.

Punjabi however remains the lead contributor in the vernacular with a 39% share. It is also the largest contributor to OTT audio in terms of non-film genre music or pop songs.

In the last four years, songs of artists like AP Dhillon, and Diljit Dosanjh, have been played not just in the north, but across all states.

Spotify, the market leader

The Indian market is flush with audio OTT apps like Gaana, Jio Saavn, Resso, Wynk, YouTube Music, Apple Music, and Amazon Music. But Spotify occupies the top spot, capturing 26% of all streams in FY23.

The report also says that the Swedish Spotify played a crucial role in bringing first-time OTTA users between the ages of 15-30 years.

“One of the key strategies that have enabled Spotify to expand its user base is its focus on penetration in Hindi and vernacular languages, beyond just international music. In fact, the platform boasts one of the largest music libraries of Hindi and vernacular content,” Redseer says.

It also concentrated on its brand positioning by associating with celebrities like Anil Kapoor and Deepika Padukone. It was the first to introduce a dark interface, and has an ease of app navigation, which ensured highest retention rates – and an edge over the competition.

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