What is the future of music streaming? Exploring geographic expansion could be key, as streaming platforms rethink their strategies to stay on top. Are emerging markets the future of music streaming? Let’s find out!
Are emerging markets the future of music streaming? A bit of context.
The information has been known for a long time: streaming services are struggling to attract new customers. It’s as if they’ve hit a glass ceiling. Listeners cross paths, many switching from one platform to another, using services like Soundiiz to transfer their data, but few are new customers. Are Spotify, Apple Music, Deezer, YouTube Music, Amazon Music, TIDAL, and Qobuz doomed to see their subscriber numbers stagnate? Statistics show an increase in customer numbers for some of the platforms above, but this growth is tending to plateau.
It’s less pronounced than in previous years, particularly at the beginning of music streaming, a period of explosive growth. A plateau could therefore be reached soon. And what will happen when it does?
This situation is also reflected from a musical perspective. Many analysts agree that the market is going in circles, with the same formulas applied to dozens of artists. The homogenization created by TikTok and other formats, the reduction in song length, and the need to produce numerous hits to gain traction in the highest media circles are leading to a slow erosion of creativity. In this context, music from Africa and Latin America is gaining momentum and establishing itself as particularly fertile ground, after decades of struggling to achieve more than local success.
Looking somewhere else!
While they wait to get back on their feet, many services regularly raise subscription prices. This is a way to finance new features and support expansion strategies. But it’s also, and perhaps more importantly, an investment aimed at stealing customers from competitors to boost profits.
In North America, music alone is no longer the sole driver of growth. Audiobooks and podcasts continue to generate significant interest, and services are trying to differentiate themselves through exclusivity and partnerships. The same is true in Europe, particularly in Sweden, where the podcasting sector is especially thriving. But here too, the numbers will eventually stabilize. It’s a fact: Counting on substantial increases in subscriber numbers would be a mistake. So, they need to look for money elsewhere. And “elsewhere” means in rapidly expanding regions of the world. And how might the future of music streaming look?
Are emerging markets the future of music streaming? Expansion!
In 2022, a study by Mark Mulligan of Midia Research, a market research firm, drew clear conclusions: by 2026, the majority of music streaming platform users would come from emerging markets. But what exactly do we mean by “emerging markets”? According to Mark, they consist of countries in Africa, Latin America, the Middle East, Eastern Europe, Russia, and Asia, except Japan and South Korea. In short, almost everything that isn’t in North America and Europe.
Three years after his study, it’s clear that Mark was right. Beyond the steady increase in subscribers in these regions, musical genres themselves, as mentioned earlier, have been impacted by these profound changes. Mark went further, explaining that the music industry initially developed in countries with high purchasing power. It was therefore logical that music labels, infrastructures, and platforms would focus on these markets, where capital seemed infinite. Still, now these regions are shaping new musical trends and diversifying the industry.
Local music is booming
But the world has changed. Resources have been invested in areas previously overlooked. With the development of the internet and the abolition of borders, local scenes flourished and then exploded, eventually spreading across the globe. Consequently, as more and more artists performed at home in Asia, Latin America, Africa, and elsewhere, their listeners needed ways to access their music. And while streaming platforms were generating revenue elsewhere, they saw worldwide customer growth.
But they were late to the party and hadn’t always prepared for this new influx. Local artists are now competing, trying to carve out a niche in markets that are sometimes still relatively unknown.
But driven by leading artists, particularly in Nigeria, the Caribbean, and Puerto Rico, where superstars have conquered the world, these emerging markets are revolutionizing the streaming economy. These artists don’t all sing in English. And while that might have been seen as a deal-breaker a decade ago, it’s no longer the case. Music is changing, and so is its economy. This reflects a shift in scale: music is now more about feeling than ever, rather than lyrics and stories. It’s not uncommon to see artists racking up millions of streams without actually telling a story, but with an undeniable sense of rhythm. And it doesn’t matter if their lyrics are in Spanish: what counts are the rhythms, the groove, and the feeling.
Are emerging markets the future of music streaming? The consequences
Beyond the need to reach customers in markets they hadn’t previously explored, streaming services face new competition from Twitch and TikTok. A growing number of listeners are accessing music on platforms other than Spotify, Deezer, Apple Music, and others. India and China are two particularly dynamic growth markets: in India, smartphone penetration and an expanding internet user base are driving the country’s growth, as is the increasing popularity of audiobooks among millennials.
In the Middle East and Africa, a growing number of people are becoming digitally savvy and are now ready to embrace streaming platforms, as audiobooks and podcasts steadily gain popularity.
Customers in emerging markets, previously overlooked because their potential monthly subscription prices were expected to be lower than those of listeners in Europe and North America, now number in the hundreds of millions. Attention is shifting towards them, while the music industry is turning elsewhere.
The change is still slow, but it’s definitely underway. And it’s not just about business, but also about musical diversity. A Canadian artist now readily collaborates with artists from Laos. And the music world resembles a more homogenized territory than ever before, where exchanges are encouraged. Platforms must also bear in mind that it would be unwise to offer these territories only music, as in the rest of the world, audiobooks and podcasts are more crucial than ever.
A study conducted by Universal Music Group estimates that nearly 220 million consumers could be recruited. This represents enormous potential and a significant financial windfall, which could give streaming platforms a serious advantage over competitors if they target them effectively.
Getting there
Since consumption breeds consumption, in territories that are more or less targeted, or at least poorly served by music streaming compared to other countries, establishing a long-term local presence allows companies to benefit from a pioneering position and long-term strength. It also allows them to establish themselves in a territory and never relinquish ground firmly.
One challenge remains, however: internet access and connection stability remain a problem in many areas. In this context, recruiting customers is difficult. Similarly, numerous local streaming services have emerged, allowing local populations to listen to artists from their regions. Music wasn’t fully globalized, and habits sometimes evolve slowly. The example of Jakarta, Indonesia, is interesting: its inhabitants were slow to embrace music from other parts of the world due to limited access to resources. Amid years of economic transformation, the capital is nonetheless evolving into an economic hub, and access to music is mirroring these changes.
The major global streaming services must find the perfect balance: between local traditions and the desire for openness; between competitive subscription prices that reflect disparities in purchasing power and optimal service quality that would put them ahead of the competition; and between respecting local music and cultural globalization.
With projections of 1.2 billion music streaming platform users by 2029, there is no doubt the market still has room to grow. But how far? And with what resources and what local specificities?
