The music streaming industry has grown immensely in the past decade; representing 83% of the music industry’s total revenue. Spotify, the largest music streaming service, have announced ‘Spotify HiFi’, a subscription tier with improved playback quality. In a recent South East Asian study into music streaming habits and consumer responsiveness to lossless audio, InsightzClub, a technology-based market research start-up, revealed intriguing and actionable insights.
All major music streaming companies are striving to offer the most attractive package for consumers, which may include enhanced audio playback. Lossless refers to uncompressed audio files, or higher clarity. Previously, larger file sizes incumbered companies from integrating this feature, now surmountable by numerous technological advancements.
Among survey participants, Spotify Premium was the most subscribed to service (70%). This was followed by YouTube Music (54.9%), Apple Music (25.5%), and Amazon Music (15.7%). In the South East Asian region, Spotify has the largest market share due to their dominant presence as the go-to music streaming service. Apple Music is popular among Apple iPhone users. Android compatibility is less accounted for as compared to Spotify’s cross-platform strategy. Only 5.9% of participants are subscribed to Tidal. It is less accessible and known among the demographic.
Listening habits were found to be relatively consistent among participants. 94% were active listeners, using their preferred music streaming service at least several times a week. This may further indicate the established movement of consumers away from physical offerings, like CDs and vinyl records. Additionally, it might be in due to the COVID-19 pandemics, where outdoor leisure activities have been restricted. The most enjoyed genres were pop (65%), K-pop (52.9%), R&B (49%), and hip-hop (47%).
Lossless audio has slowly progressed into a desired feature, apart from audiophiles and industry professionals. Survey responses indicate that 67% of consumers, in some capacity, are aware of lossless playback. Despite this high degree of awareness, the majority of participants (62%) were insufficiently informed of how lossless playback worked, along with its benefits.
Often, consumers of lossless audio tend to listen on high-fidelity devices. In InsightzClub’s findings, adoption of such devices was reportedly widespread at 80%. Further analysis reveals that this may in fact be lower; ‘audiophile’ devices tend to be niche and mainstream as compared to the most.
When asked to identify reasons for preferring their current streaming service, participants most frequently selected audio quality (70%). This value is especially interesting as the Spotify, YouTube, and Apple Music offer lower quality playback. Availability of content was the second most selected reason at 65%. Streaming platforms do sign exclusive licensing deals with labels, which may serve as incentive for some users to prefer that platform. Pricing was the third most important reason for consumers (47%).
Although previous data suggests improved audio quality may be the primary motivator to switch services, it is not supported by the data. Improved subscription pricing was identified as the strongest motivator (69%), while audio quality was second at 61%. Conversely, consumers might still be willing to spend on lossless audio streaming. When asked to indicate their willingness to pay a higher fee, 77% of respondents were mildly or highly interested. It may serve to prove that current Spotify subscribers could upgrade to the upcoming Spotify HiFi tier. This is appliable to other platforms that may introduce a lossless audio playback.
InsightzClub’s South East Asian study on consumer preferences in terms of lossless audio playback and music streaming has yielded some surprising findings. Music streaming companies could find it highly profitable within the SEA market to introduce lossless streaming at competitive prices to retain existing subscribers and attract users of rival platforms.