Kantar, the world's leading marketing data and analytics company, today releases its latest Entertainment on Demand (EoD) data and analysis on the global music streaming landscape. The report reveals a significant rise in music service adoption, increasingly driven by formats like podcasts and audiobooks alongside music. YouTube Music emerged as the most adopted service in the second quarter of 2024 but industry-wide there remains untapped growth potential among non-streamers and older demographics.
Kantar's streaming behavioral data offers insights into the digital music-on-demand industry in Great Britain, the USA, Australia, Germany, Spain, and France between April and June 2024:
• YouTube Music was the #1 most adopted music streaming service in Q2 2024.
• 85% of people who currently don't stream music express interest in listening to music, highlighting a significant growth opportunity. The biggest barrier to consumers subscribing is that 42% don’t wanting to pay a regular fee – this is also reflected in the fact that value for money is the number one driver behind new premium subscriptions across all demographics.
o The only exception is Gen Z, where having the same streaming platform their friends use is the main decision-making factor.
• Free trials remain the top influencing factor for new premium subscribers. However, earned influences such as recommendations from friends and family are as important as touchpoints the services control.
Increased competition, but major services see year-on-year growth in users
In 2023, Kantar EoD highlighted YouTube’s strong influence on music discovery, which remained consistently high across all demographics. This trend has translated into strong growth in 2024 for YouTube Music and YouTube Music Premium, solidifying their position as leaders in the evolving music streaming market. In fact, YouTube Music was the most adopted music service in Q2 2024. However, Spotify also maintained its momentum, achieving a 2-percentage point increase in penetration year-on-year amongst all music streamers.
Craig Armer, Global Strategic Insight Director at Kantar comments: “The music streaming landscape is being reshaped by the growing diversity of audio content, from podcasts to audiobooks. There’s a significant opportunity to engage older demographics who are less involved but show considerable potential. The challenge lies in convincing these audiences of the value of paid subscriptions. With many non-streamers interested in music but hesitant due to costs, services should focus on harnessing recommendations from satisfied users to attract this untapped audience.”
He continues: “As YouTube Music leads in adoption and Spotify continues its growth, the ability to amplify the right relevant content personalised for younger or older listeners will be key. Younger audiences show a greater interest in the recommendations the service algorithms generate, whilst older audiences utilise pre-made playlists. Services that can effectively meet the needs of diverse audiences, while offering compelling content beyond music, will be well-positioned for sustained success in this dynamic market.”
Where will the next phase of growth come from?
Future growth in music streaming will depend on targeting specific age groups and regions, with several markets showing this can be achieved. For instance, 51% of Gen Z in Great Britain have a premium subscription, while in the US, the 55+ age group shows potential, with just one-third currently subscribed to a service. This highlights that there remains headroom for growth amongst all ages, but services must understand what will convert each segment of non-users.
Kantar’s study found that Spotify is the top choice among new 55+ users, largely due to recommendations from friends and family. Although older listeners are harder to reach and often prefer traditional formats like radio, they can become loyal subscribers once convinced, often through recommendations and free trials.
Craig Armer, Global Strategic Insight Director at Kantar comments: “Satisfaction, as measured through likeliness to recommend the service by users, is continuously high for premium services, seemingly unaffected by price rises over the last year. For example, half of Spotify’s premium subscribers are likely to recommend the service to friends and family. This indicates that once a service can persuade non-users that their offer is worth paying for, they can be converted into satisfied subscribers.”
Innovation in the music industry: do new formats attract new consumers?
As music streaming has grown over the past year, content variety and value for money have been key drivers for new subscriptions. In Q2 2024, 14% of new premium subscribers were attracted by a wide range of podcasts, and 11% by exclusive content. Interest in podcasts and audiobooks continues to rise, with 29% of streamers now considering podcasts an important part of their life, up from 26% last year.
All markets tracked by Kantar saw a rise in the average number of paid services per person, with the United States leading the increase and Great Britain showing the lowest rate, where the average user subscribes to 1.5 services. The typical US premium consumer subscribes to over one extra service vs their GB counterparts.