Apple Music Archives - Counterpoint

Apple Unleashes MacBook Pros with New M1 Pro, M1 Max SoCs, Promises a Notch Higher Performance

Apple’s new M1 Pro and M1 Max SoCs offer up to 10-core CPU, 32-core GPU and 64GB unified memory.
Apple also announced new 14-inch and 16-inch MacBook Pros.

Apple’s October 2021 fall event saw a bunch of new hardware announcements. These include redesigned MacBook Pros, new colors for the HomePod mini smart speaker and the much-awaited TWS, AirPods 3. Apple also announced two new chipsets – M1 Pro and M1 Max – to power the new MacBook Pro notebooks. We a deep dive to talk about the Apple announcement and what it means for both, Apple and its consumers.

M1 Pro, M1 Max SoCs: Supercharged with up to 32 GPU Cores, 64GB Unified Memory

Apple’s ARM-based M1 chip that debuted last year has already proved to be powerful and efficient. Now, building on the M1 architecture, Apple has announced the new M1 Pro and M1 Max SoCs. Made on TSMC’s 5nm process, the new SoCs bring up to 70% faster CPU performance over the M1 chip. These SoCs will power the new MacBook Pro 14 and MacBook Pro 16 models. Let us dive in a little deeper to look at what these new chipsets have to offer.

Source – Apple

Starting with the Apple M1 Pro, it comes with up to 10-core CPU, a 16-core GPU and up to 32GB unified memory with memory bandwidth up to 200GB/s. Higher bandwidth will allow in quickly moving data to and from memory, thus also leading to overall faster performance. The SoC also features 33.7 billion transistors. Now, in the 10-core CPU, there are eight high-performance and two high-efficiency cores.

Source – Apple

Along with the 16-core GPU, there is also a media engine that accelerates video processing while consuming less power. The acceleration is also available for the ProRes codec that Apple announced with the new iPhone 13 models. The new chipsets designed for MacBook Pros are aimed at pro users from fields ranging from content, music and movies to app creation.

“Our marketing manager, who also creates graphics and banners, is impressed with the fast and efficient M1-based MacBooks. The new M1 MacBooks show noticeable performance gains, whether you are a normal or power user. Photoshop load times are lightning quick when compared to a PC with similar specifications. It doesn’t even break a sweat when handling heavy image files and offers a stellar battery life.”

Alex Mathew – Graphic Designer & Digital Marketer

Source – Apple

The Apple M1 Max SoC builds on the M1 Pro, taking its amazing capabilities even further. While it still comes with the same 10-core CPU, the number of GPU cores is doubled to 32, offering even faster-rendering speeds for videos and other graphics-related tasks. It has four times faster GPU performance compared to the M1 SoC. The M1 Max comes with massive 57 billion transistors and also supports up to 64GB of unified memory, offering up to 400GB/s memory bandwidth. While the M1 Pro supports up to two external displays, the M1 Max chip lets you connect up to four external displays.

“Our software developer who uses an Intel-based MacBook Air says, it gets exhausted when performing CPU-intensive tasks like crunching large numbers or running multiple servers/processes together. A small CPU-heavy script test took 84 seconds to complete on Intel machine. In comparison, the M1 MacBook Air took just 45 seconds, making it better by being faster with such computations. Considering the M1 as a benchmark, the new M1 Pro and M1 Max SoCs with higher GPU cores are likely to offer even faster performance for such tasks.”

Adarsh Punj – Data Analytics & Software Developer

Redesigned MacBook Pros: 120Hz Refresh Rate Display, more Physical ports

We had been hearing about redesigned MacBook Pros for a while now, and Apple has finally refreshed the line-up. There are a bunch of new things that the new MacBook Pros bring, making them pro-grade notebooks for content creators. There are two models – a smaller MacBook Pro with a 14.2-inch screen and a bigger one with a 16.2-inch screen. Both are miniLED screens, like what we have seen in the iPad Pro line-up that Apple released earlier this year. These are Liquid Retina XDR displays with an adaptive refresh rate of up to 120Hz. The ProMotion technology can adjust the refresh rate between 24Hz and 120Hz depending on the screen content, while also saving energy. The screen also supports a peak brightness of 1600 nits.

Source – Apple

The new MacBook Pro screens have thin bezels along the top and sides and also come with a notch, just like the iPhones. The notch adds more screen real estate, while also housing a 1080p web camera with a larger image sensor that can offer better low-light performance as well. This is a good addition against the backdrop of working and learning from home, where a lot of video calls need to be taken regularly.

Source – Apple

Apple has also added three mics that offer up to 60% lower floor noise. This should greatly help in recording audio or attending to voice/video calls. It doesn’t stop there as the MacBook Pros also come with two tweeters and four force-canceling woofers to offer a great multimedia experience.

Moving on, another big change in the new MacBook Pro line-up is the addition of more ports. The SD card slot is back, and it is a welcome change that photographers and videographers will appreciate. Next, Apple has also added the HDMI port back. So, now you get a total of three USB Type-C ports. The 3.5mm audio jack is still present and it now brings support for high-impedance headphones.

Source – Apple

But that’s not all, Apple has brought back the MagSafe connector which now supports faster charging. The base model of the 14-inch MacBook Pro comes with a 67W charging adapter, whereas the higher models come with a 96W adapter. The 16-inch MacBook Pro models, on the other hand, come with a 140W power adapter, which is also Apple’s first GaN charger.

Source – Apple

The new MacBooks have also done away with the Touch Bar and come with mechanical function keys. They also include shortcuts for Spotlight, Siri, Dictation and Do Not Disturb. For secure login using biometric authentication, the MacBook Pros come with a Touch ID sensor embedded in the power button.

Coming to the pricing, the new MacBook Pro models start at $1,999 for the 14-inch model. This is a watered-down variant that comes with an M1 Pro chip featuring an 8-core CPU and a 14-core GPU. But the base RAM is 16GB along with 512GB SSD. At $2,499, you can get the one with a 10-core CPU, 16-core GPU and 1TB SSD. If you want a 14-inch MacBook Pro with the M1 Max SoC, you will have to shell out $2,899 for the 24-core GPU model and $3,099 for the 32-core GPU model.

The 16-inch MacBook Pro starts at $2,499 for the base model with an M1 Pro 10-core CPU and 16-core GPU. The one with the M1 Max SoC featuring a 32-core GPU costs $3,499. The top-end model with 64GB unified memory and 8TB storage will set you back by $6,099.

No doubt, the new MacBook Pros are expensive as they bring key improvements, from faster processors to better displays and higher resolution cameras among others. These notebooks are designed to attract the pro users looking to ease their workflows and, in turn, bring a better ROI in the long run.

Even for a content creator like me, who uses different programs and apps for tasks like editing podcasts and videos, a powerful notebook that can handle my workflow swiftly is important. This is especially true when editing videos shot in 4K (60fps), where trimming each clip on the timeline and adding music and voice-over along with text should be a smooth experience. Once the editing is done, rendering the video takes a considerable amount of time, and it gets a little frustrating if you want to make the smallest changes to the video and render it again.

During my brief usage, rendering a one-minute 8K video on a Windows-based laptop with the Intel Core i7 processor, 16GB RAM and GeForce MX250 graphics card took over four minutes. The same took less than 40 seconds on a MacBook Air M1 (8K to 4K 60fps). I am looking forward to the new MacBook Pros to see how faster they get at these tasks while improving efficiency.

Key Takeaways:

The MacBook Pros come with “pro pricing” but promise faster performance while lowering power consumption. How well these machines help in making the workflow easier remains to be seen.
The M1 Pro and Max SoCs may be good for content creators and graphic designers but they don’t seem to be designed for hardcore gaming.

Podcast: High-res, Lossless Audio Crucial in Delivery of Music in its Purest Form

Personal and home audio technology has greatly evolved over the years. We have moved from wired to mono Bluetooth and stereo wireless headphones to True Wireless Stereo (TWS) earbuds. In the home audio segment, soundbars are becoming popular as they can deliver a great home theatre experience. But it is not just about the changing form factors, there have been improvements in audio delivery systems as well. Support for higher quality audio, such as lossless audio, is important in delivering music in its purest form.

The TWS earbuds, in particular, include a lot of hardware and software features that enable Active Noise Cancellation (ANC), ambient awareness, and multiple mics to offer crisp call clarity. These features are quite helpful in the current work-from-home and learn-from-home scenarios. Also, 5G is here, enabling higher throughput and thus higher quality audio from streaming services like Tidal, Spotify, Amazon Music HD and Apple Music, which was not possible in the 3G and 4G era. So, why are these new technologies important in enhancing the audio listening experience?

In the latest episode of ‘The Counterpoint Podcast’, host Peter Richardson is joined by Gyanendra Singh, Head of Audio Marketing for Sony India, to talk about trends in the audio space. Singh, with his 17 years of experience in Sony’s audio department, shares his thoughts on high-res and other audio formats, how the COVID-19 pandemic has seen a surge in demand for audio products, and more. He also touches upon the home audio segment and how it is growing due to the pandemic-triggered restrictions on visiting cinema halls.

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Read the podcast transcript here.

Podcast Chapter Markers

2:19 – How is the audio technology evolving on the hardware side with changing form factors?

4:25 – How do you see the demand changing among consumers for wireless audio in general?

7:33 – ANC is offered at different price points, so how does Sony stand apart from its competitors?

9:44 – What is the role of different audio standards within the high-resolution space?

13:45 – What are your thoughts on Alexa and Google Assistant being offered across personal audio, TV, and portable speakers?

15:35 – Has COVID-19 changed consumer spending habits when it comes to home audio products?

18:22 – Any final comments on coming audio technology changes?

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Apple's Record-Setting Q4 Will Spill Over Into a Great 2021

Apple registered a record-setting growth in the final quarter of 2020. All business units saw 17%-41% growth and total revenue was a whopping $111 billion. This phase of strong growth is expected to continue in 2021 and beyond. Here are a few insights which support this projection:

Source: Apple

The delayed and staggered launch of the iPhone 12 series saw a record number of sales (and connections) in the final week of 2020. In North America, with supply trying to keep pace with demand, some Pro and Pro Max sales spilled over into January. Many other countries, like China, Taiwan and South Korea, are seeing a more significant spillover into January for the Pro and Pro Max. In addition, if a Fall launch goes back to a September launch, there will also be favorable Q3 comparisons. Finally, channel inventory is lower than last year exiting the quarter, which gives an opening tailwind to the March quarter.
While the iPhone 12 may be the volume driver in the long run, the Pro and Pro Max have performed above expectations, driving ASPs.
The increased installed base continues to be a flywheel for service revenues. OS-switching remains low. However, the trend in most regions has been towards iOS. Active iOS devices crossed 1.65 billion during the December quarter. Active installed base has also accelerated. iOS gained 100 million users in 2018 and 2019, and 150 million users in 2020. All Apple product lines saw accelerated growth in installed base.
There are now over 620 million paid subscriptions across services on the iOS platform. Apple added 140 million paid subscribers during 2020. Service revenues were at an all-time high of $15.8 billion. Gross margin on services improved due to a more favorable mix. Counterpoint estimates Apple Music, Apple Pay, cloud services, and Apple Fitness+ particularly helped the growth. Apple TV+ remains a large opportunity but also the service platform with the largest challenges.
Counterpoint estimates Apple has grown its iPhone sell-through market share in China from 8% in Q3 to 16% in Q4. Some iPhone sales will spill over to January. In addition, the March quarter is particularly a strong quarter for services because of the Chinese New Year festive season. Service revenues will be helped by the iPhone growth in China.
In the US, Apple has grown its market share from 45% in Q3 to a record high of 60% in Q4.
The installed base of iPhones has grown to one billion active users. The spring SE 2020 launch stimulated higher OS-switching than normal. The new low price point helped. In addition, the device was built with latest chip so it could run for at least four years before reaching end-of-life. The refurbished market continues to increase the installed base in even lower price points than the SE 2020. Apple remains the #1 brand in the secondary market by a long mark. The iPhone 12 also drove higher OS-switching YoY.
It was a record iPhone upgrade quarter. This is partly due to an aged base, but it is also that there was a pent-up demand for 5G iPhones, particularly in China and the US. Regions with significant 5G rollouts planned for 2021 and 2022 will feel this tailwind later. 5G drove stronger volumes and better ASPs during the quarter.
Hearables and wearables grew about 30% during the quarter. Hearables continue to evolve and will remain on a growth trajectory. Same for Apple Watch. 75% of Apple Watch buyers were first-time buyers. The integrated heart rate function has opened up an enormous number of insights into general health and sleep analysis. The ECG is a work in progress but also will be very valuable. New sensor technologies and health dashboards will continue to drive this space. Apple over-indexes the market on cellular connected watches too, which delights global mobile operators.
iPad saw its best quarter to date with a whopping 41% YoY growth. Many purchases were for school-from-home and work-from-home. Apple is closely aligned with the education segment and could see further gains in future quarters with iPads purchased as laptop replacements. And this is not just happening in North America. Record-setting iPad deployments within education were also seen in Germany and Japan. A significant refresh is expected in Q2 and Q4, which could also boost sales.
Mac revenues grew 21% even as Apple launched its first Mac with its own M1 chip.
Of course, Apple never discusses future products. However, CEO Tim Cook did comment that Apple is at its best when it brings hardware, software and services together. A foldable smartphone or AR/VR headset would be able to draft off of this early integration of software and hardware, which is not yet done by an OEM.

Global Online Music Streaming Growth Slowed Down in Q2 2020

While the market continues to grow annually, the growth rate dipped on a quarterly basis.
Average Revenue Per Paying User (ARPPU) dropped 12% YoY.
Spotify’s revenue remained flat QoQ but grew 14% YoY.

Seoul, Hong Kong, New Delhi, Beijing, London, Buenos Aires, San Diego – October 6, 2020

Global online music streaming revenues declined 2% QoQ but grew 13% YoY in Q2 2020 at $6.7 billion, according to the latest findings from Counterpoint Research. 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% YoY compared to 35% YoY in the previous quarter.

Research Analyst Abhilash Kumar said, “The growth slowed down in the second quarter and, for the first time, the revenues declined sequentially. There are a couple of reasons for the same. 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. 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 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%).

Talking about the top performers, Kumar added, “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. Also, its family plan continues to attract users. Apple Music’s free six-month subscription offering in 52 countries helped maintain its market share. 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 QoQ. On the other hand, India’s largest platform, Gaana, grew 19% 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.”

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, driven by sequential decline in both paid revenues (people switching from a paid plan to free plan) and ad-based revenues (decline in traffic and companies withdrawing ads). Starting June-end, the growth is slowly coming back on track and the traffic has started to rebound. We believe the growth will be back to pre-COVID-19 levels by Q4 2020.

Our comprehensive and in-depth ‘Global Online Music Streaming Market Tracker, Q2 2020’ is available for download here.

Please feel free to reach out to us at press(at)counterpointresearch.com for further questions regarding our latest research and insights, or for press enquiries.

Background

Counterpoint Technology Market Research is a global research firm specializing in technology products in the TMT industry. It services major technology and financial firms with a mix of monthly reports, customized projects and detailed analysis of the mobile and technology markets. Its key analysts are experts in the industry with an average tenure of 13 years in the high-tech industry.

Analyst Contacts:

Abhilash Kumar

Hanish Bhatia

Podcast: Global Pandemic Makes The Right Pitch for Podcasts

Online music streaming entered a golden era in 2019, with paid subscriptions crossing 350 million users. Moving to 2020, the year started with a global pandemic where the COVID-19 virus outbreak was seen in several countries. As a result, lockdowns were imposed in most countries, and that turned out to be a silver lining to accelerate the growth of the music streaming market. Global subscriptions hit 394 million in Q1 2020, with podcasts continuing to drive growth.

Podcasts have seen big growth as even individual content creators are trying to cater to this segment of the audience. In the current challenging environment due to the coronavirus, health-, wellness- and meditation-related podcasts have grown. Other genres include personal finance and entertainment. The lockdowns have even caused a shift in listening patterns. Earlier, people would listen to podcasts when commuting. Now, as people are spending more time at home, listening has increased on devices like smart TVs, smart speakers, and more.

To attract more customers, music streaming platforms like Spotify have been bringing promotional offers in key markets like India. The company is offering a yearly subscription plan for just INR 699 (around $9). Apple Music, on the other hand, has expanded to 52 new countries, offering free subscriptions for six months. In terms of revenue share, Spotify leads the pack, followed by Apple Music and Amazon Music.

In the latest episode of ‘The Counterpoint Podcast’, host Maurice Klaehne and research analyst Abhilash Kumar discuss the growth of the music streaming market in Q1 2020. We also deep-dive to understand factors that are driving the growth of podcasts and touch upon the revenue share of the music streaming platform.

Our detailed report on the Global Online Music Streaming Market in Q1 2020 can be found here.

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COVID-19 Accelerates Music Streaming Market Growth, Global Subscriptions Hit 394 Million in Q1 2020

Spotify continued its good run, growing 30% YoY in terms of music streaming subscriptions
Music streaming platforms are focusing on increasing reach by making their services available on different platforms through initiatives like device partnerships and browser availability.
Podcasts continue to drive growth.

Seoul, Hong Kong, New Delhi, Beijing, London, Buenos Aires, San Diego – 8th July 2020

Global online music streaming subscriptions spiked 35% YoY in Q1 2020 to reach 394 million subscriptions, according to the latest findings from Counterpoint Research. This was driven by increased usage of the OTT platforms as people stayed at home amid the COVID-19 outbreak. Promotional offers like free trials and subscription price cuts in emerging markets added to the growth. Increase in podcast genres on the music streaming platforms was another big factor for people to tune in.

Research Analyst Abhilash Kumar said, “The growth in paid subscriptions (35% YoY) was once again more than the 20% YoY growth in monthly active users (MAUs). This indicates that people from the free MAU universe are upgrading to become premium subscribers for an improved experience. This also indicates that it is relatively difficult to bring users into the system, but once they come in, it is relatively easy to make them upgrade.”

Spotify continued to lead the charts for Q1 2020 with a market share of 30% in revenue terms and 33% in terms of paid subscriptions. Apple Music followed with 25% revenue share and 21% subscription share. Amazon Music subscriptions grew a strong 104% YoY to capture the third spot. However, in terms of total MAUs, Tencent Music (with the help of QQ Music, Kugou and Kuwo) emerged the winner with a strong hold in China, accounting for 657 million MAUs.

Talking about the top performers, Kumar said, “Spotify growth was driven by strong performances in Asia Pacific and Latin America. It has come up with attractive promotional offers in the emerging markets. To talk about its key market India, which it entered recently, it has made a big price cut on its yearly plan – from INR 1,189 (around US$16) to INR 699 (around US$9). Also, it kept its research game strong to tap different segments. It came up with a new service Spotify Kids, targeting parents with small children, besides podcasts and playlists for pets. Apple Music expanded to 52 new countries and offered 6 months of free subscriptions there. Also, it is adding new features continuously on its platform, like with the iOS 13.4.5 release, users can now share their music on Instagram and Facebook stories, thus increasing social media engagements. The reason for Amazon Music’s 104% YoY growth is that its HD arm Amazon Music HD offered 90 days of free lossless music streaming in Q1 2020.”

Discussing the Q1 impact of the COVID-19 pandemic on the OTT industry, Kumar said, “Like we said in our Q4 2019 release, the OTT industry experienced an uptick as people stayed at home. However, the listening patterns have changed from listening while commuting to listening at home. Radio, news channels and podcasts related to wellness and meditation have grown. On the devices side, streaming time on smart audio devices and television grew even as listening hours on Android Auto and Car Play declined amid less commute.”

The race for subscriptions is heating up with every passing quarter. While the COVID-19 outbreak proved to be negative for most of the industries, it improved the overall scenario for the music streaming segment. Consumers getting some extra time to explore these platforms accelerated the user growth rate.

The comprehensive and in-depth “Global Online Music Streaming Market Tracker Q1 2020” is available to help track the market. Please contact press(at)counterpointresearch.com for further questions on our research or other press inquiries.

Background

Analyst Contacts:

Abhilash Kumar

Hanish Bhatia

Latin America and Asia Drives Growth for Spotify in Q1 2020

Spotify met its business expectation on all major parameters despite the COVID-19 outbreak. Both the MAUs and premium subscribers grew 31% YoY to reach 286 million and 130 million respectively. This is driven by strong regional performances in Latin America and Asia Pacific. MAUs grew 36% YoY in Latin America while it grew 65% YoY in the Rest of the World (the Asia Pacific and Middle East Africa ) due to the good performance of Mexico, Brazil, and India.

Impact of COVID-19

The only metric which did not perform in line with the guidance is ad-supported revenues. This is because the pandemic has curtailed many advertisers budgets and have withdrawn ads from the platform. However, this revenue accounts for only 10% of Spotify’s overall revenue so this is not making a big dent in Spotify’s revenues. On the other hand, premium revenue grew 23% YoY and 4% sequentially in Q1 2019. Interestingly, this indicates that the growth in premium subscribers is not just because of free trials given by the company, but that people are willingly paying to subscribe to the service.

Amid the COVID-19 outbreak, on the global level, there is hardly any impact on paid subscribers and MAUs. In fact, both new and reactivated MAUs grew during lockdown periods in markets including North America, Latin America, and Asia Pacific, etc. Notably, for the quarterly average, the ratio of daily active users (DAUs) to monthly active users (MAUs) was higher than Q1 2019.

Beginning late February, Spotify saw the negative effects of the outbreak as there was a notable decline in DAUs and consumption in highly affected Spain and Italy. However, the market has started to rebound in these markets over the last week of March.

As people continue to stay at home, the usage in cars, wearables, and web platforms has dropped, however this gap is filled with increased traction on smart TVs and gaming consoles which is up by over 50%.

There is a shift in pattern from listening while commuting to listening at home. Podcasts related to wellness and meditation have seen an uptick. The freemium model of Spotify has turned out to be successful in the pandemic time compared to the premium model of Apple Music and Amazon Music. Apple is well aware of this fact and this is one of the reasons it has given 6 months free trials to people in 52 new markets that it recently entered.

Podcast in focus

Spotify is moving from a music first to an audio first company, as podcasts have been gaining user engagement for over a year now. The company has clear plans to keep investing in podcasts with an aim to ace the exclusive content category. It acquired The Ringer in Q1 2020 giving it a total of four studio operations.

Outlook

Entering India has been a good move for Spotify. There is still a lot of scope for it to shine in the Indian market due to cheap 4G data and around half a billion smartphones capable of installing the app. Also in 2020, Spotify will focus on increasing its share in other countries. In the webcast, Spotify made it clear that it sees Russia and South Korea as having good potential. There it will be competing with regional giants like Yandex Music in Russia and Melon in South Korea.

BONUS PODCAST: Music Streaming Services Entering a Golden Era

Podcast: What Drove Paid Music Subscription Growth to 350 Million Users in 2019?

The demand for online music streaming services has grown rapidly with data becoming faster and affordable. The services can be accessed from multiple platforms such as smartphones, PCs, and even smart speakers. But what is interesting is that the number of paid subscriptions is also growing. According to the latest findings from Counterpoint Research, global online music streaming grew 32% YoY, with paid subscriptions crossing 350 million in 2019.

Spotify leads the paid subscription market with a share of 35%, followed by Apple Music with a share of 19%. Amazon Music takes the third spot with a market share of 15%, followed by Tencent Music, YouTube Music, and others. Some factors driving global online music streaming services include exclusive content like originals and podcasts.

In the latest episode of “The Counterpoint Podcast” host Maurice Klaehne and research analyst, Abhilash Kumar discuss the factors that are driving the growth of music streaming services. The discussion also covers strategies that are helping music streaming providers gain more subscribers in the emerging markets. We have also touched upon topics like COVID-19 and how it is impacting the music streaming platforms. Lastly, Abhilash also shares his thoughts on Apple Music expansion in 52 new countries, and our growth expectations in 2020.

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Global Online Music Streaming Grew 32% YoY to Cross 350 Million Subscriptions in 2019

Spotify continues to be the market leader and recorded a 23% YoY growth in total revenue during CY 2019.
Music streamers are focusing on creating exclusive content with podcasts continuing to feature strongly in 2020.

Seoul, Hong Kong, New Delhi, Beijing, London, Buenos Aires, San Diego – 3rd April 2020

Global online music streaming subscriptions grew 32% year-on-year (YoY) reaching 358 million subscriptions in CY 2019, according to the latest findings from Counterpoint Research. This is driven by the availability of exclusive content like podcasts, originals which attracted people towards the platform and eventually turned them as subscribers. Also, promotional activities like price cuts in subscriptions in emerging markets, bundled offers from telcos added to the growth. We expect that online music streaming subscriptions to grow more than 25% YoY to exceed 450 million subscriptions by the end of 2020.

Commenting on the overall market, Research Analyst, Abhilash Kumar, said, “Paid subscriptions grew 32% YoY compared to 23% YoY growth of total MAUs. This suggests people are ready to pay for music streaming for a hassle-free experience. However, this is not completely user-driven. Music streaming platforms are following a two-step approach to gain subscribers, first registering them to their platform as free users by means of excellent advertising campaigns and secondly pitching them with attractive offers to transfer them to become paying subscribers.”

Spotify topped CY 2019 grabbing a 31% share of the total revenue and a 35% share of the total paid subscriptions. The runner up, Apple Music, follows with a 24% share of total revenues in the industry and a 19% share of the total paid subscriptions. Due to Apple’s high focus on its services segment which includes Apple Music, its subscription base grew 36% YoY in CY 2019. Amazon Music subscriptions reached a 15% share in 2019 compared to 10% in 2018.

Talking about the top performers, Kumar added, “Spotify maintained its top spot with the help of promotional activities like free Spotify Premium for three months, price cuts, customized campaigns like Spotify and a focus on exclusive content. Tech giants like Amazon, Apple, Google have started focusing on music streaming and have sufficient cash at their disposal to give stiff competition to Spotify. Apple Music is making improvements in its app like the introduction of night mode, curated playlists to target a group, etc. Similarly, Amazon Music has been trying lossless music and is creating its own niche where it competes with Tidal.”

Despite global players strongly pushing their music streaming platforms, regional players stand strong in their respective regions, primarily because of regional exposure and high focus on local content. Gaana continues to be the no.1 player in the Indian market, Yandex Music is leading in Russia. Similarly, Anghami leads the Arab world. Tencent Music Group leads the China market with the help of its apps QQ Music, Kugou and Kuwo.

Discussing the impact of the COVID-19 pandemic on the OTT industry, Kumar added, “We expect the OTT sector will experience an uptick as people stay at home actively tracking the latest updates. During this outbreak, audio OTT consumption has switched from music streaming to the radio. People in highly affected areas are worried about the outbreak and are therefore continuously tuned to news on TV/radio for updates. The traction of news channels and podcasts saw an upswing while that for music streaming dropped.”

What’s common is that both the regional and global players are focusing a lot on building exclusive content. Acquiring podcast companies and creating their own channels are all being undertaken. It’s often exclusive content that drives paid subscription growth.

More than 80% of music streaming revenue came from paid subscriptions. The rest came from advertisements and partnerships with brands and telcos. Therefore, increasing paid subscriptions is of prime importance for music streaming platforms.

The comprehensive and in-depth chain of reports on Global Online Music Streaming Market for Q4 2019 is available to help track the market in terms of MAUs by region, paid subscriptions by region, revenues, and ARPU. To view the global report in terms of users, revenues and ARPU, click here. For regional analysis on MAUs and paid subscriptions, click here. Please contact press(at)counterpointresearch.com for further questions regarding our in-depth research, insights or other press inquiries.

Background:

Counterpoint Technology Market Research is a global research firm specializing in Technology products in the TMT industry. It services major technology firms and financial firms with a mix of monthly reports, customized projects and detailed analysis of the mobile and technology markets. Its key analysts are experts in the industry with an average tenure of 13 years in the high-tech industry.

Analyst Contacts:

Abhilash Kumar

Hanish Bhatia

Spotify Q4 2019: Podcasts Continue to Drive Growth

Spotify’s Q4 2019 results show podcast streaming jumped by 200%YoY, helping the company register healthy growth in monthly MAUs and premium subscribers. Notable points from its results:

Growth in MAUs and premium subscribers

MAUs grew a healthy 31% YoY and 9% QoQ, reaching 271 million.
Premium subscriptions too grew 29% YoY and 10% QoQ exceeding 124 million subscribers.
Growth re-accelerated in North America, Europe, and Latin America, while the rest of the world which includes APAC, MEA (where Spotify entered recently) continued to be the fastest-growing in terms of MAUs. This growth was driven by promotional activities like free Spotify premium for the first 3 months, price cuts, customized campaigns, etc. One such successful customized campaign is Spotify Wrapped which gives a personalized playlist of songs to its users based on what they have listened the most throughout the year. Spotify claimed that it engaged more than 60 million total users which equate to around 22% of the total Spotify user base.
Spotify offering 3 months free premium subscription was expanded to the family plan compared to individual and student plan last quarter.
Partnerships with other industry players and the lower subscription price in emerging markets also bolstered growth.

The podcast continues to grow

Podcasts are enjoying good uptake across all platforms – especially Apple Podcast. Spotify had been a laggard but is now catching up and saw strong growth in Q4 2019. 16% of MAUs engage in podcast consumption on the platform. Spotify has more than 0.7 million podcast episodes available. To capitalize on global consumption trends, 26 global podcast shows were launched in Q4 2019. As claimed by the streaming giant, podcasts have helped the company lower the churn rate by 80 bps annually and 50 bps sequentially and therefore Spotify is continuously acquiring popular podcast brands.

2020 is again an investment year

2020 will continue to be an investment year for Spotify. The management has decided to invest in podcasts, and technologies to make the product even better. We expect Spotify will continue spending on promotional offers to attract more users. These investments have helped Spotify grow revenue 24% YoY but at the same time, there is a little compromise on the profit margins.

In terms of user acquisition, Q4 2019 has been a good quarter for Spotify. It exceeded its high level of guidance in MAUs, subscribers, and revenue.

The one parameter where it continues to struggle is net profit. Despite double-digit growth in revenue, it made a loss of € 77 million (approx. USD 85 million). The major expense for the Swedish giant comes in the form of royalties to music labels, investment in the product and podcasts, and the unavoidable social costs which the company had to pay in the form of payroll taxes associated with stock-based compensation. Spotify can improve on this parameter by improving consistently on the gross profit margin with every passing quarter.

Music streaming has come a long way now. We believe this era to be the golden period for the music streaming industry the competition will likely drive innovations in the music streaming space in the years to come.

US music streaming accounts for 80% of the total US music industry, compared to just 5% ten years ago. Consequently, the competition is also getting fiercer. Tech giants like Amazon, Apple, Google have entered and having sufficient cash in hand, are experimenting and innovating to create USPs for themselves. Amazon is trying lossless music. Apple Music is making technological improvements in the app like the introduction of night mode, curated playlists to target a group, etc. Similarly, YouTube Music has the advantage of its video service plus a huge Android installed base it can leverage. Regional players like Gaana in India, Anghami in MEA have a strong grip in their respective regions.

The important point to note here is that both the global and regional players are focusing on creating exclusive content by either launching their own channels or by acquiring podcast companies. Seeing the growing exclusive content opportunity, music streaming platforms are in the process to become the audio streaming platforms and podcasts will continue to feature strongly in 2020.

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