The final day of Audionxt Week wrapped up with a conversation around monetisation strategies for audio streaming.
On the final day of Audionxt Week, which ran last week, from July 26-30, a panel got together to discuss the topic, ‘Business models: will advertising continue to be the main revenue driver in the future?’. The panel included Amin Lakhani, COO, Mindshare South Asia; Arjun Ravi Kolady, head of sales at Spotify India; and Siddhartha Roy, COO, Hungama Digital Media. The session was moderated by Sreekant Khandekar, co-founder and CEO, afaqs!.
The panel covered topics like the factors driving the audio boom, the future of radio, and the rise of podcasts and local language content. Khandekar began the discussion on the last day (July 30) by introducing the topic – methods of monetising streaming audio.
He began with a 2020 data about the different mediums out there and how much of their revenue comes from advertising versus subscription/pay models. For print, 64 per cent of its revenue comes from advertising and 36 per cent from subscriptions. In television, 63 per cent of the revenue comes from pay and 37 per cent from advertising. However, this 63 per cent is the money paid to the cable TV operators, and a small percentage of that goes to the broadcasters.
Finally, when it comes to radio, it’s entirely based on advertising and sponsorship. Even the events done outside of the radio are paid for by the advertiser, or the sponsor. With web publishing, approximately two per cent comes from subscription and it’s virtually negligible now. If you look at video OTT, advertising is 60 per cent, and pay is 36 per cent.
Khandekar recalled the first-ever Vdonxt conference – which discussed video. At the time, people had asked why we were hosting it, since there wasn’t much to be said. A panel discussed subscription models in video advertising and, at the time, nobody saw it happening since it wasn’t very big in India.
Mindshare’s Lakhani started off by stating that he believes both models of pay and subscription will need to coexist in India, similar to other parts of the world. “Look at Netflix and YouTube, both the models can coexist... Subscription has caught on in India in the last 3-4 years. Whether it is video or audio, more people are open to the idea of subscribing and paying for the content that they’d like to consume.”
Lakhani added that the telecom sector in the country has survived on subscription so far. Kolady of Spotify India agreed with Lakhani’s views. “Globally, if you think about it, 60 per cent of our users are on the free tier and 40 per cent are on the paid tier. Forty per cent of our subscribers drive 90 per cent of the revenue. That percentage, however, varies from market to market.”
“Ads and subscription will coexist, but we are at day 0 of audio monetisation,” remarked Kolady. He recalled that it is only between 2020 and 2021 that the ad spend on global audio streaming has exceeded the ad spend on radio. “Devices, access, and use cases of audio streaming are expanding. We’ve come here to discuss revenue and subscription, but there is so much more that can be done with monetisation models...”
Hungama Digital Media’s Roy remarked that we are in the first phase of audio monetisation in the country. “Ninety per cent of music comes out of our movies, and the popularity of audio content streaming has opened the content creation space up in a big way. We knew there was a certain niche category that consumed podcast and audio streaming. With the opening up of the non-music audio streaming space, there is now a lot more encouragement..."
For more such insights, you can watch the full video below. Audionxt Week is a part of afaqs!'s flagship 'All Week' initiative, which also includes eConferences like Television Week, Digipub Week, Languages Week, Vdonxt Week, CMO Week and Gaming Week.