Part 1: How to Create a Music Streaming App Business

Part 1: How to Create a Music Streaming App Business

In part 1:

we look at the blueprint of creating a potentially successful music streaming app. We begin at understanding the current market and assessing future trends of content consumption.

What does today’s music streaming market look like?

As of early 2019, the total revenue generated in the music streaming business from all over the world stands at a whopping USD 10.4 billion. As of 2018, the music streaming alone contributed nearly 75% of music industry revenue (Verge). Streaming in this context includes paid subscriptions to services such as Spotify and Tidal, but also digital radio broadcasts and video streaming services such as VEVO.

 
Streaming apps revenue - Statista - Codegama

Streaming apps revenue – Statista – Codegama

Source: Statista    

Here’s a list of top streaming apps by sheer volume (Forbes)

  • YouTube – 1.5 billion users: Gets nearly a billion and a half streams every month, and most of it is music oriented
  • NetEase 400 million users: The Chinese streaming and download platform now has over 400 million users (as of 2017)
  • Soundcloud – 175 million users: The Berlin-based streaming giant has at least 175 million registered users
  • Spotify – 170 million users: Perhaps the best-known player in the streaming game, Spotify changed the music industry when it finally picked up steam years ago
  • iHeartRadio – 100 million users: iHeartRadio has become a streaming favorite for many who love local DJ content
  • Pandora – 74 million users: Pandora currently only operates in a handful of countries. If it was truly global, that sum would likely be much, much higher
  • Gaana – 50 million users: An Indian streaming app, it quietly passed 50 million users in 2017, an important milestone that many streaming companies will never reach
  • Apple Music – 50 million users: The lack of a free tier has kept Apple Music from overtaking Spotify, though when it comes to paid users, that achievement might not be too far away
  • Anghami – 33 million users: Made its name as the most successful region-specific streaming music platform in Northern Africa and the Middle East
  • Deezer – 14 million users: A recent count put the France-based streaming service at 14 million users. Out of which 9 million users pay for subscriptions. A remarkable feat
 
Streaming apps penetration rate - Statista - Codegama

Streaming apps penetration rate – Statista – Codegama

Source: Statista

Is there a place for another streaming service in the market? Of course yes. Nearly 2.5 billion people use smartphones today (this are Android or iOS based phones, not those brick phones with no internet access). And the closest a streaming app has come to address is about 400 million users (NetEase in China). So, the potential is there, but the value proposition and service delivery have to be unique, to make a mark in the market.

The crux is search

There are three ways users search for music content on streaming apps today, and the third option is slowly changing the way people access content.

  • Tapping: users open the app, tap on libraries or categories and start streaming music
  • Typing: users know what they want, they type the query and stream music
  • Voice search: users talk to a smart speaker or a voice enabled streaming app on their phones. Users speak out their queries and stream music

When we look at how easy it is to command a smartphone or a smart speaker, it is easy for more users to come onboard the streaming business. What we learn from this is to make music streaming apps easy to use, and especially easy to search via multiple modes.

What are necessary features your music app should have

There are ton of features which can be built into a streaming app. However here are the fundamental features your app should offer.

  • Personal library: an option for users to sync their on-device content into your streaming app player
  • Cloud storage: You let the users store their songs and stream them anywhere and anytime they like
  • Cross platforms: most of us use multiple devices between our phones, PCs, and tablets. Your app should be built to seamlessly deliver a continuous user experience across all platforms
  • Themed radio stations: you can offer a select theme of radio stations to draw more users
  • Podcasts: streaming content driven podcasts is way more popular than ever before. Building this feature onto your app could just attract millions of users worldwide
  • Voice enabled: as addressed earlier, it is becoming easier to command our devices through our voice than actually typing song or album names on the app. If not now, you may want to consider building this feature in the near future
  • Cast to device: make it easy for users to cast music on TV or cast-enabled devices. Millions of users still own Fire TV sticks and Chromecasts today
  • A gamified ads platform: rather than shoving ads on users faces, work with advertisers and create a win-win ads situation for users. Ask them to view ads and receive something of value in response. This way you generate more ad views and revenue. Look at how Duolingo runs ads on its apps.
  • Easy, renewable subscription: for rolling services, make it easy and secure for users to pay for monthly (better yet quarterly or annual subscriptions)
In part 2 of How to Create a Music Streaming App Business, we will delve into the legalities, UX, app monetization, and how or who will build your app.

Feb. 26, 2019 - Posted by

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