Music streaming dominance under threat

Market saturation and household budget pressures threaten Spotify's dominance as big tech platforms exploit scale.

David Kennedy · Venture Insights9 May 2024Period: 2023-20244 min read

13.0M↑

Adult music streaming users (2023)

1.54→

Average music apps used per person (2023)

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Companies covered:

Abstract

This report analyses the Australian music streaming market, finding that 13.0 million adults used streaming apps in 2023. While takeup continues to rise, growth is decelerating as the market reaches maturity. The analysis highlights a stark contrast between music streaming and SVOD, noting that the average music user utilizes 1.54 apps, with Spotify and YouTube Music leading the market. Tighter household budgets are expected to drive users toward lower-cost alternatives like radio and podcasts.

Key Takeaways

The Australian music streaming market reached 13.0 million adult users in 2023, showing signs of maturity and slowing growth.
Spotify and YouTube Music dominate the landscape, while Amazon Music achieves the highest conversion rate through Prime bundling.
The average music streaming user utilizes 1.54 apps, but paying users average only 1.1 paid subscriptions.

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Frequently Asked Questions

The market is reaching maturity with 13.0 million adult users in 2023. Growth is decelerating as adoption becomes established, with the majority of users having joined their primary services more than two years ago.

While the average consumer utilizes 1.54 apps, paying users average only 1.1 paid subscriptions. This indicates a winner-takes-most environment where secondary paid services struggle to gain a foothold.

Amazon Music currently achieves the highest conversion rate by leveraging Prime bundling. In contrast, YouTube Music’s paid conversion rate remains below 50%, reflecting the challenge of monetizing a large free user base.

Spotify’s first-mover advantage is being eroded by hyperscalers like Apple, Amazon, and Google that exploit massive economies of scale. Additionally, tightening household budgets are expected to shift consumption toward lower-cost alternatives like radio and podcasts.

Music streaming dominance under threat

Abstract

Key Takeaways

Frequently Asked Questions

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