Music streaming market in 2020
Music streaming market in 2020. Photo: ShutterStock
Technology

What to expect from music streamings in 2020 in Latin America

If 2019 was the stage for the debut of new players, 2020 could be the year that Spotify's hegemony in the region will really be tested

More than fifty years after the release of the first vinyl record and decades after the CD era, streaming services are taking music access to new heights. As with video on demand services, the war for subscribers has just begun in this segment. If 2019 was the stage for the debut of new players in Latin America, 2020 could be the year that Spotify’s hegemony in the region will really be tested.

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Launched in 2008, Spotify is today the leader in the music streaming industry. The company was the first to unlock the power of emerging countries for this industry by betting on Latin America, a region that is now one of the company’s main pillars.

The lead platform in Latin America, Spotify. Photo: ShutterStock

Today, there are competitors that may put in risk the previously consolidated leadership of the Swedish company in Latin America. Even with a smaller portfolio, Amazon Music is one of the biggest stakes in the market.

In Brazil, the service was launched as one of the great advantages of subscribing to Amazon Prime, the retail giant’s package that offers access to the brand’s music and video streaming, besides the booking platform, as well as benefits in e-commerce purchases. All of it paying a single monthly tax of BRL 9,90 or BRL 89,90 per year. The company’s big bet was that the cost-benefit could attract Spotify’s audience, which even with the price war that already started, has not yet happened.

Even though the cheapest Spotify plan in the country has a competitive value (BRL 8.50), the option is restricted to college students and does not include all the added benefits of the Amazon package. Still, pricing tends to be a big card at stake in 2020, being the main weapon to fight for fast audience growth, but portfolio improvements will continue to be the determining factor for true market decentralization by the end of the day.

The power of the partnerships

Deezer’s platform, the main competitor of Spotify in Latin America. Photo: ShutterStock

While Amazon was betting on promoting its own service combo with an aggressive pricing strategy, other streamings have found partnerships with related segment brands to increase their popularity in the Latin American market.

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This was Deezer‘s strategy to win the Brazilian market, which has become the second most important for the brand worldwide. Across the 185 countries in which operates, the French company, that reached the unicorn status in 2018, has more than 40 partnerships with telecommunications companies, offering free streaming to subscribers of specific plans.

In Brazil, Deezer’s main partner is TIM, a telecommunication operator that concentrates 23.85% of the segment’s market share, according to a report by Teleco from October this year. For users of TIM’s Beta plans, the Deezer premium version is free and using it does not discount franchise data contracted by users. For other plans, the service may be ordered individually.

Our relationship with TIM is continually under development, as we also keep doing with other partners. And of course, we’re always evaluating new customer reach strategies

Oscar Castellano, Deezer’s CEO in Latin America, in an interview for the Brazilian media group Diários Associados.

The brand has also had a partnership with the Brazilian soccer team Flamengo in the past and does not rule out the possibility of establishing new agreements with relevant brands in the Brazilian market to continue expanding its operations in the country.

Music streaming market in 2020

If from a global perspective we can already expect much harder competition in the music industry, in Latin America the battle will be intense.

Spotify is likely to lose some of its market share to Deezer and Amazon Music primarily. In addition, two other services intended for the American public, Apple Music and Tidal, must also decide in 2020 whether or not to bet on the Latin American market.

Furthermore, in terms of portfolio, the bet on popular urban rhythms among the vast majority of Latin Americans must be even more evident.