Spotify is shaking off the competition in the UK audio streaming wars

Kantar’s Entertainment On-Demand service shows the Swedish brand continues to rule music streaming.
24 June 2020
eod-comtech
Craig
Armer

Strategic Insight Director, Client Service, Worldpanel Division

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According to data from Kantar's new Entertainment on Demand (EoD) service for the UK audio subscription market, Spotify is dominant in the category, with 62% of UK subscribers holding an account. 

The service has also highlighted the following consumer behaviours in the three months to April:

  • Amazon’s subscriber share of 40% is split across its Prime Music and Music Unlimited services
  • While the Amazon Prime Music service is available for free to Prime subscribers, only 22% of subscribers use the service, indicating significant room for growth
  • Amazon Music Unlimited is responsible for 43% of Amazon’s overall share and is growing faster than the Prime Music service
  • Smaller services such as Deezer, YouTube Music and Tidal claim 15% of music service subscribers. Typically, these subscribers also have at least one other subscription service
  • Spotify is the main driver of category growth, with 47% of new subscribers signing up to music streaming for the first time
  • While access to podcasts is an important feature for 12% of new Spotify subscribers, features such as the range of artists, the ease of creating playlists and the music sound quality were cited as more important
  • However, the NPS rating for podcasts is low at +5, showing an area of potential improvement for Spotify when compared to its overall rating of +30

With its dominance in the audio subscription market, Spotify’s success means it is now the main driver for growth in the audio streaming market, with 47% of new subscribers also being completely new to music streaming. This dominance has come at a cost for other services. Besides Amazon’s two services – Amazon Prime Music and Amazon Music Unlimited – other brands have only secured meagre market share, totalling 15% of the total UK market between them, indicating there is significant opportunity to expand their services and portfolio if they want to attract more users.

Spotify is the market leader in audio streaming, but there continues to be room for all brands to extend their market share. While podcasts are still a relatively niche offering for subscription streaming, with only 12% of subscribers saying it is an important feature to them, Spotify’s exclusive licensing agreement with the Joe Rogan Experience indicates it plans on building out this capability, something other brands should pay close attention to.

The findings also highlight differences in how consumers listen to content, and how it influences the service they subscribe to. Buying wireless speaker systems have been an important driver to new subscriptions to Amazon Music Unlimited, specifically voice assistant devices. Spotify and Apple Music sign-ups are however driven by mobile devices.

Hardware is driving sign-up to audio streaming services. It demonstrates that there is an affinity between purchasing a device and subscribing to a new service. While many music streaming services already have partnerships in place, it’s clear this strategy needs to continue and expand where possible to grow market share.

Based on a longitudinal panel of 15,000 consumers and boosted by 2,500 new subscriber interviews each quarter, the service is designed to help the broadcast industry and investors understand the full consumer journey for digital video subscription services. Additional findings from the research reveal:

  • In Q1 2020, 6.4% of individuals subscribed to a new service. 40% of these new subscribers were for Spotify, 25% were for Amazon’s premium Music Unlimited service
  • 44% subscribe to a music streaming service, with each having 1.5 subscriptions
  • Spotify and Amazon Music Unlimited have the most satisfied users, with Spotify’s NPS rating the industry highest at +30. Amazon Music Unlimited is at +25

Entertainment On Demand is designed to help the broadcast industry and investors understand the full consumer journey for digital video and music subscription services. It is the only subscription service providing both quarterly installed base and new subscription market share alongside deep analysis on purchase motivations, including named content, customer experience, and diagnostics on ‘at-risk subscribers’ as well as guidance on acquisition and retention strategies.

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