Low-end smartphones hinder music streaming business
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Music streaming is quickly becoming a favored service, offering Indonesia’s music-seeking public a legal means to access music. However, with a majority of Indonesians possessing low-end smartphones, the outlook may not be as rosy as some think.
According to a new report by McKinsey, the prevalence of low-cost smartphones among mass market consumers in Asia, including Indonesia, has hindered the take-up of music streaming apps.
Indonesia experienced a particularly busy time for music streaming services in the first half, with the entrance of foreign-based names such as Spotify, Apple Music, Yonder Music and JOOX coming in around the same period, tapping into the potentials and eagerness of the largest Southeast Asian digital market.
Services that previously entered and operated in Indonesia include Guvera, Deezer and Rdio, which closed operations in November last year.
It turns out that 34.7 percent of Indonesians listen to JOOX, followed by 12 percent with Musixmatch, 10.2 percent with SoundCloud, 10.1 percent with Langit Musik and 9.8 percent with Spotify, the report shows.
However, “in markets such as Indonesia, low-end smartphones cost as little as [US]$75 per device. These devices are slower and possess less memory capacity than other smartphones, posing a dilemma for music streaming services”, the report said.
“They can optimize music streaming apps for these lower-end smartphones at the cost of functionality that is critical to the customer experience of more affluent consumers or retain the full functionality of streaming apps to maximize the customer experience for affluent customers at the cost of limited access to mass market consumers.”
Among the most popular smartphone brands in Indonesia in the second quarter of 2016 were Samsung, OPPO, Asus, Advan and Lenovo, all of which offer low-end smartphones.
Services usually offer an “offline” option, through which listeners can download certain tracks onto their phone for internet-less listening. Usually, streaming relies on an internet connection, making online connectivity necessary.
Many services offer rates that have adjusted with the market’s emphasis on affordability, with fees as low as Rp 35,000 ($2.67) to Rp 50,000 per month, and varying payment methods aside from the usual credit card option.
“However, “in markets such as Indonesia, low-end smartphones cost as little as [US]$75 per device.”
To make their products affordable and wide-ranging, the services partnered with telecom companies, with partnerships including Spotify with Indosat Ooredoo, Yonder with XL Axiata and JOOX and Guvera with Telkomsel.
However, in terms of low-end smartphone capacity, some services are confident that their apps will give listeners optimum quality regardless of weak Indonesian bandwidth or poor connectivity in some areas.
For one, Guvera operations and marketing director Onny Robert said that because its service primarily targeted “users who prefer not to pay for their music”, its bundling plans included latching onto smartphones themselves such as Lenovo devices in order to secure listeners.
After evaluating field connections, Onny said Guvera was able to deliver a capable service even at 3G speed.
“Bandwidth or phone capacity won’t really matter to Guvera users because our app is practically small in size, 20 megabytes, and because it is bundled with Lenovo devices, it will drive more interest into using our service,” he said recently.
Guvera has 1.5 million active subscribers, with under-25s dominating their demographics.
Yonder Music CEO Adam Kidron earlier said the service aimed to further cultivate the music streaming tradition and make it more affordable and accessible.
Spotify, meanwhile, has seen its users stream over 100 billion minutes of local and international music and listen to an average of 90 minutes of music per day, since its launch in March.
Questions & Answers
Q.What challenge do low-end smartphones pose for music streaming services in Indonesia?
What challenge do low-end smartphones pose for music streaming services in Indonesia?
Low-end smartphones, costing around $75, are slower and have less memory. This forces streaming services to either optimise apps at the cost of functionality for affluent users or retain full functionality, limiting access for mass market consumers.
Q.Which music streaming services are currently popular in Indonesia, according to the report?
Which music streaming services are currently popular in Indonesia, according to the report?
The report shows JOOX is most popular with 34.7 percent of listeners, followed by Musixmatch at 12 percent, SoundCloud at 10.2 percent, Langit Musik at 10.1 percent, and Spotify at 9.8 percent.
Q.How are music streaming services attempting to make their products more accessible and affordable in Indonesia?
How are music streaming services attempting to make their products more accessible and affordable in Indonesia?
Services offer affordable rates, with fees as low as Rp 35,000 per month, and varied payment methods. They also partner with telecom companies, such as Spotify with Indosat Ooredoo, and Yonder with XL Axiata.
Q.How does Guvera address concerns about low-end smartphone capacity and weak internet connectivity?
How does Guvera address concerns about low-end smartphone capacity and weak internet connectivity?
Guvera's app is small, at 20 megabytes, and is bundled with devices like Lenovo smartphones. This strategy aims to drive interest and deliver a capable service even with 3G speeds and weak bandwidth.
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