Next Steps For Telco Music The Revenue Or User Dilemma

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20,000 Foot View: Streaming’s early fortunes were intimately tied to telco music strategy, with the streaming services eager to piggy back telcos’ much larger marketing budgets and telcos equally keen to pursue marketplace differentiation and brand kudos. Telco music bundles are delivering more revenue and users than ever before but their relative role in the streaming economy has lessened. At the end of 2016 the picture has changed markedly. Like a marriage that has lost its spark, both parties value each other’s company but no longer cast each other covetous glances. But just as with a tired marriage, there are still good times and both parties would rather work out how to build a new relationship within the confines of their existing union rather than part ways. 

Key Findings

• Apple Music and Spotify accounting for the majority of the growth in 2016 and        of the total        million commercially active subscribers at the end of 2016
• The total number of active telco partnership (mobile and fixed line) grew from        in 2015 to        in 2017
• Europe is the leading region, accounting for        of all partnerships, with        while Asia is               remains the leader in terms of partnerships        down        from 2015) while Spotify grew from        to        of telco bundled subscribers are now aged under        compared to        of paid subscribers
• A shift towards shorter term telco bundles is taking place that is causing discord between partners
• Bundles remain crucial for emerging stage markets but new approaches and differentiated, telco-optimised offerings are needed in established markets

Companies and services mentioned in this report:        Anghami, Apple Music, Axiata, Deezer, Digi EE, KKBox, KPN, Medianet, MusicQubed, Napster, Netflix, Optus, SOCAN, Spark, Spotify, Telenor, Tidal 

NOTE: A full list of music telco partnerships and a telco revenue model are included in the excel spreadsheet posted alongside this report for Data Access subscribers.