Global Takeover: Making Babies Means More Paying Music Fans
Music Tectonics has identified several seismic shifts that have created the music landscape of today and tomorrow. These are climate changes, tectonic shifts beneath the surface, unexpected flash floods, or meteor collisions. Today we dive deeper into the demographic shifts that are making music more global than ever.
Globalization has been powering seismic shifts on planet Earth for hundreds of years. Now the world is shrinking faster than ever as national boundaries continue to erode from wireless information flow. Music has floated over walls and ocean barriers for many decades, but shipping vinyl and compact discs around the world, or even cutting licensing deals using fax machines or email scans, always slowed the potential of the global music marketplace. As the whole planet comes online and new models of licensing and streaming become viable, digital streaming providers are racing to grab market share in what are still early days for music streaming in many parts of the world.
Babies and Immigrants = More Music Listeners and Subscribers!
Look into the global demographic crystal ball and see why streaming is going global quickly. Though America is the third most populated country in the world, by 2050 it will be the fourth! According to the UN Population Division, though China’s population will shrink slightly, it will stay three times larger than the U.S. by population “shrinking” to 1.36 billion people. India will become the world leader by head count, reaching 1.66 billion. Nigeria will outpace America totaling 410 million people by 2050, with America growing to 389 million people. (Other countries with significant population growth by 2050 include Indonesia, Pakistan, Brazil, Bangladesh, DR Congo, and Ethiopia. It’s misleading for the current topic that Europe, with its current 743 million people, doesn’t get a spot on this 2050 chart. Though Europe’s not a country, it is certainly a hotspot for streaming services.)
All the recent news about music streaming in India, and also in India, and don’t forget Indian streaming services in India, and in the Middle East and in Africa is happening for a reason. Meanwhile, Chinese music streaming apps KuGou (“Cool Dog,” in English) and QQ Music are reported to each have 250 million monthly active users (MAUs), compared to Spotify’s global MAUs of 217 million. On top of that Chartmetric reports that “trigger cities” in Latin America and South and Southeast Asia are quick to engage with emerging artists and see that spread globally outward.
As user and subscriber growth is showing signs of plateauing for Spotify, entry into additional parts of the world—places where the populations are huge and growing—is logical. Last month the Wall Street Journal reported that Apple Music now has more paying U.S. subscribers (28 million) than Spotify (26 million). Will Apple, with its 101 million active iPhones worldwide, be able to catch up with Spotify in other territories? Or maybe services based in China and India will make that too tough a race for both Spotify and Apple.
Differentiator: Serving Different Cultural Audiences
Now that the music marketplace is truly becoming global, a differentiator for the market leader will be how to serve the cultural expectations of each region. Some of this is related to having the right combination of worldwide pop catalogs and regionally relevant catalogs. But it will be interesting to see how a single user experience and interface can serve people in very different regions of the world. In some parts of the world, it will be mobile only, whereas others will combine mobile with smartspeakers and desktop use. In some parts of the world, music streaming is already inherently social, whereas elsewhere it is a solitary experience (and where early social music attempts failed). Will some regions require bundling with a mobile carrier service? This could also impact the user experience. How well will global streaming services be able to staff up curation and editorial teams for a larger variety of different listening audiences? How fast will they be able to fall in line with local legal frameworks--and will they pay a price on other regions for these efforts?
The Race is On
The race to planet Earth is underway. The pursuit to the lowest musical common denominator of commercial radio was never an ideal solution for music listeners; it was an efficient path for building listenership (and selling ads). But if the leading DSPs cannot capture the regionalization and personalization of music taste, something else will fill the need.
What effects do you predict global population shifts will have on the music industry? Which seismic shifts have caused the most upheavals in the music industry so far, and what rumblings do you hear on the horizon? Keep the conversation going at the Music Tectonics Conference, October 28-29 in Los Angeles, CA. Music Tectonics is about the big picture: how the minor tremors that ripple through the daily news add up to seismic shifts that shape the business of music now and in the future. See you at the epicenter!
Photo by NASA on Unsplash