Music to Ears: The Quiet Rise of Audio OTT in India According to a recent Redseer report, over the past three years, the audio OTT industry has witnessed a surge of ~1.6X in daily streams to reach 460 Mn in FY23

Move over short video apps and video OTT platforms, audio OTT is the new tortoise in the media and entertainment race.

While short video apps have lately been seeing a downfall in India and video OTT platforms are still figuring out the Indian market, the audio OTT segment has reached an inflection point. Even as video OTT fails to capture the market the way experts envisioned them to, audio OTT is growing slowly, steadily and ironically very quietly.

According to a recent Redseer report, over the past three years, the audio OTT industry has witnessed a surge of ~1.6X in daily streams to reach 460 Mn in FY23. "The COVID pandemic witnessed during FY21 and FY22, accelerated the growth of OTTA, adding more than 50Mn music listeners, not only from the young age group but also among the people with more than 40years of age.", said Ujjwal Chaudhry, partner, Redseer Strategy Consultants in a statement shared with us on 19^th April 2023.

Within audio OTT, which includes music and non-music formats (podcasts, audiobooks), the most popular genre happens to be film music streaming. But, considering music as a segment has held a significant place in Indian culture with vast genres and availability in many different languages, this doesn't come as a surprise. Platforms like Spotify offer a library of 70+ Mn songs whereas JioSaavn offers 55+ Mn songs and these numbers are growing rapidly. According to a Ficci-EY report, nearly 200 million people streamed music each month in 2021.

Global scenario

The rise of audio OTT platforms has been significant globally as well, with the introduction of Internet of Things (IoT), Artificial Intelligence (AI), and blockchain technologies. For instance, Spotify AB's Spotify Ad Studio, a streaming media intelligence technology, allows advertisers to hyper-contextualize their information, ensuring that they reach the right people with the right content at the right time.

To showcase how big the global market is, here is a snapshot of two reports:

• Grand View Research report: the global podcasting market size was valued at $18.5 Bn in 2022 and is estimated to expand at a CAGR of 28% from 2023 to 2030.
• eMarketer report: The number of podcast listeners worldwide was expected to increase by 10.1% in 2021. Overall, this trend can be attributed to well-known factors, such as affordability, convenience, and the increasing penetration of smartphones.

But, how have audio OTT platforms, both Indian and international, been able to tap into the diverse Indian market, when many others have failed?

The key drivers

"Audio OTT players have been able to capture the India market by offering vernacular content, offering personalization features by analyzing user behavior and preferences and finally by offering affordable pricing. These keep the customer engaged and makes it very convenient for anyone," said Ankur Bansal, co-founder, BlackSoil.

The above factors have helped the platforms like Spotify reach 2 Mn monthly active users within the first year of their operations. Another example is Castbox, even though they are a global podcast platform, they are growing aggressively in the Indian market.

Audible.in , launched in India in November 2018, also has a similar story. "Our success in the audio OTT space can be attributed to several key factors. Firstly, the widespread penetration of smartphones and affordable data connectivity across urban and rural areas of India has opened up seamless access to content for a larger audience. Additionally, the pandemic has played a significant role in driving the growth of audio content consumption, as people sought new forms of entertainment. India's vast creative community, including celebrity narrators, directors, and authors, have embraced audio OTT as a new medium to engage and connect with their audiences. In 2023, we anticipate that the growth of creators venturing into podcasting will continue to drive the momentum," said Shailesh Sawlani, Country Manager, India - Audible.

He also added that the localization of content in regional languages, the flexibility and ease of consuming audio as a medium, along with screen fatigue, have acted as catalysts for the rise of audio OTT

"The growth of audio OTT platforms in India has been significant, despite the struggles faced by short video apps and video OTT platforms," said Bhaskar Majumdar, Managing Partner, Unicorn India Ventures, while adding the key drivers behind this growth as below:

• Affordability: Audio streaming platforms usually offer more affordable subscription plans compared to video OTT platforms, making them more accessible to a wider audience.
• Convenience: Audio content can be consumed while multitasking, during commutes, or in other situations where video content may not be as practical.
• Data consumption: Audio streaming uses less data compared to video streaming, making it a more attractive option for users with limited data plans or slow internet connections.
• Increasing smartphone penetration: As the number of smartphone users in India continues to grow, so does the demand for digital content, including audio OTT platforms.

Vernacular the way

Out of all the above-mentioned drivers, the role of vernacular in pushing this industry to the fore has been huge. "In the last four years, vernacular music has experienced the most rapid growth and accounted for 34% of music streams in FY23," said the Redseer report.

The report also mentions that one of the key strategies that have enabled the Swedish company Spotify to expand its user base in India is its focus on penetration in Hindi and vernacular languages, beyond just international music.

"Regional platforms play a significant role in the growth of audio OTT in India, as they cater to the diverse linguistic and cultural preferences of the Indian audience. By offering content in multiple regional languages, these platforms can reach a wider user base and capitalize on local preferences," said Majumdar.

Platforms like Hungama Music reached 60+ Mn monthly active users whereas Kuku FM reached 5+ Mn monthly active users recently. Already established platforms like JioSaavn and Wynk Music have seen their user base grow by 50%+ in recent years solely by adding regional content on their platforms.

"Since India is a very diverse country with consumers having a strong preference for content in their language, regional segments of any platform offer them access to many different markets. By catering to regional demand, these platforms have created a niche for themselves which is contributing to the overall growth," added Bansal.

Audio OTT in the next five years

According to a report by Deloitte India, the Indian audio OTT market is expected to reach $3.5 billion by 2025. Thus, we will also see the rise of sub-segments like audiobooks and podcasts in India. "Since India is a growing market, the need for differentiated digital content will also increase subsequently," said Bansal.

Key trends, according to Majumdar, that may shape the industry include increased investment in original content, expansion of regional content, improved algorithms and AI technology leading to better content personalization and enhanced user experience, monetization through ads and subscriptions and integration with smart devices.

In addition to that, 5G technology is expected to provide a significant boost to the audio OTT segment. Faster internet speeds and lower latency will enable seamless streaming of high-quality audio content, improving the overall user experience and driving further adoption of these platforms.

In conclusion, experts anticipate established audio OTT platforms to penetrate deeper into the Indian market by offering increasingly niche content with better personalization for all and many new small players entering the space, who will cater to only certain niche segments, both old and new.