Spotify moves fast to remain the global music streaming leading platform

In March, Spotify started supporting music videos in 11 markets. Three weeks ago, the company expanded this feature to 85 new countries. This new service adds up to the video podcasts already available on the platform. Along with Spotify, its competitors adapt their strategy to face tougher market conditions, as growth opportunities become less abundant. In the most mature markets, platforms are shifting their focus from acquiring customers to achieving profitability. In the emerging markets, they try to secure vantage points to generate future revenue, albeit keeping an eye on their return on investment ratio. What are the remaining areas of growth for streaming platforms and how do they approach them? What will be the consequences of the intense competition on the market structure in the next few years? In mature markets, profitability is becoming the new paradigm In the mature markets, music streaming has established itself as the paramount music consumption mode, and is widely adopted by highly connected populations. Besides, streaming platforms generate substantial revenues there thanks to relatively high purchasing power. Based on these criteria, the scope of mature markets encompasses North America, Western and Northern Europe, Australia, New Zealand, Japan, South Korea, and to some extent, China.  In those countries, the acquisition of new paid subscribers has slowed down over the last few years, as shown in the chart below. In 2023, the subscriber base growth rate stood at less than 10% in the US, Japan and the top 5 European markets, namely the UK, Germany, France, Spain and Italy. The most dynamic phase of customer acquisition ended already, thus making revenue growth more challenging for platforms. As can be seen on the chart below, music streaming revenue also grows at a slower rate than in the previous years in the mature markets. Moreover, they do not largely outpace subscriber growth, thus reflecting the difficulty of platforms to raise their average revenue per user (ARPU).  How could platforms raise their ARPUs in the advanced markets? The easiest way to increase the revenue generated per user is to raise the price of the service. After years of relative price stagnation, Deezer opened the way for prices above the symbolic $/£/€10 bar, and more regular price hikes in 2022. However, price hikes prompt customer dissatisfaction when implemented too often. To avoid facing high churn rates, streaming services have moved very cautiously on this side so far. Conversely, they have consistently pushed initiatives to increase the perceived value of their service. Spotify has notably steadily promoted other audio formats and tried to monetize them within its subscription plans. In October, the Swedish company announced that it expanded its audiobook offering to non-English speaking markets, a year after launching it...