Analysis of Product Adoption Lifecycle for Music Streaming Services in India

Introduction

It is a well-known fact that music streaming services have emerged like never before. All thanks to the network operators who ensured the 24/7 availability of affordable Internet and cloud technologies and the adaptability to the environment by the consumers.

India, a country where people have traditionally relied on radio and television to listen to music, now has over 200 million listeners using music streaming services. According to the Indian Music Industry (IMI), a body that represents record labels in the country, there are 200 million unique subscribers of music streaming service apps. That figure will be closer to 250 million if you count overlapping users’ accounts separately.

Initially, the music streaming services provided by Spotify, Jiomusic, Saavn, Gaana, Winky, Amazon music, google play music, and YouTube music in India wooed users by allowing them to listen to songs for free.

Streaming music service's share of total music revenues is bigger than ever. According to the report from the RIAA, revenue in the Music Streaming segment is projected to reach US$393m in 2020. Revenue is expected to show an annual growth rate (CAGR 2020–2025) of 7.1%, resulting in a projected market volume of US$555m by 2025.

What is Product Adoption LifeCycle?

The product adoption curve is a standard model that reflects who buys your products and when. Think of it as the big picture view of your product adoption. It takes the product lifecycle and considers what happens at different points. Like mentioned, this curve shows you who buys your products and when.

Let’s understand by visualizing it -

It is a picturesque view of your product adoption life cycle stages. It takes the product lifecycle and considers what happens at different points.

Let us now understand, what do Innovators, Early Adoptors, Early Majority, Late Majority, and Laggards mean:-

Innovators

This is a unique group. People who buy super early are usually obsessed. They make up to 2.5%. They are the ones willing to take risks, are super tech geeks, have high social status, and great financial lucidity. They are often the ones
to stand in the queue on product launch and pre-order stuff.

Early Adoptors

They follow the innovators and makeup to 13.5% of the customers. Early adopters are a bit more hesitant. They still want to try something new, but they want a few reviews to consult. They are younger in age and are the ones to give feedback to help the vendor refine its future product releases.

Early Majority

The next set of individuals who come in or who would actually access your product would be the early majority, which is nearly one-third of the total population or 34%. So, these users or these individuals would adopt a product after a varying degree of time. And which would be much more certainly more than innovators and early adopters, but lesser than the laggards.
And then they will be influenced by the early adopters more.

Late Majority

Next comes the late majority who is again the balance, the one-third of the population, about 34% again who adopt an innovation after, well most of the average society has already adopted it, they are actually the next ones to go with it. Typically, this audience is usually skeptical rate about purchasing a product.

Laggards

And last but not least, is the laggards, who would be the balance one-sixth of the market. They are typically the last ones to adopt any innovation and generally avoid changing. They may be typically also older than some of the other adopters even from an age group standpoint. 16% of your product adoption will come from laggards. They are extremely traditional and conservatives.

Chasm

The chasm refers to the technology adoption lifecycle or the transition from the early market into the mainstream eye. A chasm is a limbo between early adopters and the early majority Crossing the chasm means the opportunity for hyper-growth and market success. It is the leap from being a new, little-known and exploratory product, to mass adoption and well-known status.

Factors and Challenges Which Affected the Rate of Music Streaming Adoption

1. The speed and consistency of the internet could be one very strong deciding factor. Buffering is a serious turn-off.
2. Unwillingness to pay: Of the more than 350 million smartphone users in India, less than 1% are willing to pay for music. People choose free listening but are unwilling to pay.
3. Pricing of the app could be a factor i.e. whether it is paid or free of charge or integrated with the network provider.
4. It would also depend on the number of existing competitors and how are people responding to them. If there is a highly liked product which is already widely adopted, in which case, it might be more challenging to pull the loyal customer base.
5. The target market base would determine the success of product adoption. If the urban young affluent population, which forms a major proportion of our innovators, early adopters, and the early majority is good in number, then the possibility of product adoption is higher.
6. Pirate Services — When it comes to off-screen consumption, the biggest streaming alternative is pirate services. Currently, India is the first country in the world in terms of piracy rates. According to the latest surveys, 76% of internet users admit to using pirate services in the last three months — and by far the most popular unlicensed channel are the stream-ripping websites, allowing their users to turn the YouTube links into mp3 files. Then, the mp3 files can be easily “sideloaded” onto the Android-operated devices (which account for over 90% of all smartphones in India) through external SD-cards.
7. Variety of languages: As there are many regional languages in India, it brings a major challenge for these service providers to integrate songs of preferred languages.

Growth and Product Adoption Comparison Between Various Music Streaming Services

Growth Hacks that are Commonly Used For Customer Retention

Freemium models are introduced by almost everyone these days. Spotify runs on advertisements but there is a specific feature to provide a user with 30 minutes of ad-free uninterrupted listening by watching 30 seconds of advertisement. These hacks entice customers to end up purchasing premium subscriptions which also come with few months of the free trial period.

Additional functions like easy share options, advanced searches of things related to the song or its artist can also benefit the existing music streaming apps.

Spotify’s Unique Value Proposition was to give users complete control and access to any song, on-demand, for just $10/month, along with a free option that offered more than simple radio-style streaming — not to mention the fact that it was totally legal.

Personalization can also be a growth hack to attract users by curating a playlist of the users’ choice. Spotify uses machine learning algorithms to know the taste of the user and create playlists based on those to suggest it on daily basis. Also additional content like podcasts, tutorials, and stories could be a good initiative to retain users.

The Sound chart blog further reads that the live market has not yet reached the stage where shows can make a profit from ticket sales alone. Based on this analysis, only 30% of the live revenues are generated by direct ticket sales. This has opened the doors for all these music streaming services where they organize these shows on their platform and also live for the audience to increase traction on their platforms as well as generate some additional revenue.

Summary

The product adoption curve is one of those concepts that’s tricky to master but incredibly rewarding when you do. It requires a lot of attention to your customers — a lot of listening and changing. But creating an awesome product and having a successful launch isn’t exactly a walk in the park, either. You can plan for each stage of the curve, and you’ll be better equipped to adapt to any unforeseen changes. Like I mentioned at the beginning of this article, understanding the product adoption curve is ultimately about knowing your customers and catering to them.

Music streaming apps are doing quite well in the Indian market seeing a huge jump in the growth rate. With all the value-added services and better user experience, we can expect a decent increase in the growth rate over the next few years. The growth in audio streaming is expected to grow by 75% by 2021. The digital revenues can propel the Indian music market towards INR 20 billion and beyond.

Thanks a ton for making it till the end…!! :)