Spotify leads as music streaming market diversifies at rapid pace [report]

The number of music subscribers worldwide rose to 523.9 million at the end of June 2021.

This was 26.4% (or 109.5 million) from 12 months earlier and was a faster rate of growth.

The figures were released last week by UK research firm MIDiA.

Spotify dominates the global music subscriber market share with a clear lead – 31% compared to second-placed Apple Music at 15%.

Amazon Music and Tencent Music were both at 13% (Tencent grew 60% in Q1 2021) and YouTube Music at 8%. But Spotify is losing ground to new competitors.

Its share fell from 33% in Q2 2020 to 34% in Q2 2019.

While Spotify added more subscribers in the 12 months ending June 2021 than any other single DSP, Amazon saw greater growth at 25% compared to Sweden’s 20%.

“But the most notable achievement among Western DSPs was YouTube Music, for the second year in a row,” said Mark Mulligan, report author and managing director of MIDiA.

“Google was once the latecomer in the space, but the launch of YouTube Music transformed its fortunes, growing more than 50% in the 12 months to Q2 2021.

“YouTube Music was the only western DSP to increase its global market share during this period.

“YouTube Music is particularly resonating with Gen Z and young millennials, which should ring alarm bells for Spotify as their 2010s millennial subscriber base in the West is now starting to age.”

It is difficult to be precise on the latest figures because some services are reluctant to share them.

Spotify’s last update in October 2021 showed 381 million users and 172 million subscribers.

In October 2021, Apple claimed 745 million payers. But it combined Apple Music, Apple TV+, iCloud, Apple Arcade, Apple News+ and Apple Fitness+.

Apple’s last reading for its music service was 60 million in June 2019. It was 72 million 12 months later, according to music industry estimates.

YouTube Music and YouTube Premium jointly grew from 30 million in October 2020 to 50 million in September 2021 after seeing impressive growth in countries like South Korea, India, Japan, Russia and Brazil.

The strongest subscriber growth in Q2 2021 came from emerging music markets.

Tencent Music Entertainment and NetEase Cloud Music in China added 35.7 million, which represents 18% of the global share, although they are only available in their domestic market.

Yandex in Russia doubled its subscriber base to reach 2% global market share.

“Strong subscriber growth has added significance through 2022,” Mulligan said.

“The rise of non-DSP streaming in 2021 means that the streaming market is no longer reliant on revenue contribution from maturing Western subscriber markets (or even emerging markets that dilute ARPU).

“With non-DSP streaming revenue expected to have contributed between a quarter and a third of streaming revenue growth in 2021, streaming revenue is expected to see strong growth, even as subscriber growth declines.

“That’s what you call a diverse market.”

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