Global Online Music Streaming Growth Slowed Down in Q2 2020: Counterpoint Research Report

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%).

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.