A Closer Look At Google Play Music’s India Debut
The Indian music streaming market is growing steadily, with rapid smartphone adoption and increasing demand for streaming from younger users. Streaming music users in India are estimated to grow rapidly and reach 273 million by 2020. Google (NASDAQ:GOOG, GOOGL) recently launched its music subscription service – Google Play Music All Access – in the Indian market, which is already crowded with several local players such as Saavn, Gaana and Airtel. Other global players are also looking to grab a piece of this market, with Apple Music already present and Amazon Prime Music likely to be launched in 2018. Google will be a relatively late entrant in this high-growth market, and is likely to face intense competition. However, by launching its services at a competitive price in the region, Google can not only promote its brand but also generate steady revenues from its music segment in the long term.
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The Indian streaming music market, although small in size, is growing rapidly. A KPMG study suggests that India will be among the top 10 world music markets by value in the next few years. While piracy is rampant in the market, with less than 10% of music purchased legally, there has been a clear shift towards digital streaming in conjunction with the country’s rapidly growing smartphone adoption and internet penetration. With cheap music streaming subscription plans available, many consumers are likely to shift towards legal – and convenient – ways to access music. Google is looking to develop a competitive edge in the market through a cheaper monthly subscription, free cloud storage for subscribers and minimal use of mobile data. While it is entering an already competitive market, these features could help the company gain customers. However, other players are already working on differentiation based on content. Local player Saavn launched Saavn Original Content, non-music audio content for its subscribers, while Apple Music is collaborating with local artists to create original content.
India is an important market for Google’s future, and the company is seeing significant growth in revenues from the country. Google’s revenues from India reportedly doubled over the past two years. However, with players such as Chinese search engine Baidu looking to enter the market with an app-based strategy, Google will need to establish itself firmly in the region and increase adoption of its apps. To this end, the launch of Google Play Music could not only drive revenues for the company in India, but also improve its overall foothold in the market.
The Indian music streaming segment is still in nascent stages, but with very high growth potential. Google is a relatively late entrant in the market, but its high brand value and technological advantages can help the company establish itself as a strong player. While the launch may not have a material impact on its revenues in the near term, it will give a Google a stronger position in the high-growth Indian market.
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