Six reasons why regionality still matters for the global music streaming business

Picture Credit: NASA

This MBW op/ed comes from Ryan Blakeley, a Ph.D. in Musicology candidate at the Eastman School of Music. His research investigates how music streaming has affected music industries, creative practices, and listening habits.

You’d be forgiven for thinking that music streaming services such as Spotify, Apple Music, and Amazon Music have rendered local listening habits and cultures less relevant.

After all, music streaming is now available in most parts of the world and allows users to listen to artists from across the globe. In many ways, music has never been more accessible.

Yet the importance of regionality persists, even with increased global connectivity.

From local scenes to national laws, music consumption and distribution remain closely tied to location.

This has profound implications for how people listen to and experience music, how artists and labels can market new releases and schedule tours, and how streaming services can effectively tap into markets to maximize revenue. 

Here are six reasons why locality still matters for the global music streaming business.

1. Local (Sub)genres and Styles

Although music streaming has brought mainstream superstars to international audiences, it is also introducing listeners to various local styles of music: Latin music revenues in the United States went up 19% last year, for instance, and Afropop and K-pop have similarly gained traction with a wider listenership. 

Streaming services also need to cater their offerings to the specific musical preferences of local markets, however. This is because listening habits can differ wildly based on the city or country, with music scenes often being built around local artists, venues, tastemakers, and fan cultures.

While global audiences may be increasingly familiar with broad categories like “Latin music” and “Afropop,” they are likely less familiar with, say, the subgenres of Brazilian sertanejo. (For a closer look at music consumption by city and country, the website Every Noise at Once breaks down Spotify’s statistics on specific genres in different countries and associations between genres and specific cities.)

“Although music streaming has brought mainstream superstars to international audiences, it is also introducing listeners to various local styles of music.”

Internationally available streaming services must take these listener behaviours into consideration when launching in new markets. Not only do these companies have to adjust their software for market fit – for example programming local language preferences – but they also need to acquire and promote prominent local talent by working with influential artists and tastemakers (such as journalists, radio hosts, managers, and DJs). 

The free streaming service Audiomack, for instance, runs a series of Hometown Heroes playlists curated by leading voices from certain cities or countries. Spotify likewise promotes local music with regional editorial playlists. These principles often extend to personalized recommendations as well, which algorithmically tailor content to users based on their location, accounting for factors like language and genre. It goes without saying that user acquisition and retention rates will be higher when users can easily find and access the music they want.

The importance of local markets has also led to a flourishing of music streaming services that focus on specific locations. The examples are endless: Gaana and JioSaavn in India; Anghami in the Middle East and North Africa; Boomplay, Deedo, and Mdundo in several African countries; Nada Kita in Indonesia, and so forth. Several of these region-specific streaming services are powered by Tuned Global, a company that specializes in providing music streaming solutions to brands.

Such services pride themselves on having a more intimate understanding of local music preferences, and they often have more specialized catalogues and features. These companies try to instill a sense of local identity that distinguishes them from more generic mainstream services. At the same time, localized services’ focus can’t be too narrow, as most local audiences have come to expect access to at least some of the most popular international music.

Listeners from local markets will naturally be drawn to streaming services that cater to their own needs, so it is no surprise that regionality continues to play such an important role in music streaming curation and features.

2. Curating for Culture

Beyond differing musical preferences, every culture has its own values, attitudes, and practices that inevitably influence their streaming markets. This often entails localizing offerings based on regional events, such as playlists for national holidays or even unique features for religious observances.

The service Anghami, for example, is geared towards countries with large Muslim populations and offers a special mode for Ramadan that foregrounds an audio version of the Quran as well as related podcasts. 

“Different cultural practices can also influence how users interact with streaming services.”

Cultural norms can affect music streaming uptake as well. In Japan, for instance, consumers’ continued preference for physical media like CDs has meant that the country has been much slower to adopt streaming than many other countries despite its massive music market (although this is rapidly changing, with Japan being the fastest growing streaming market in the world). 

Different cultural practices can also influence how users interact with streaming services. South Korea’s fandom culture often involves music fans incessantly streaming and downloading their favourite artists’ music to boost their numbers, as demonstrated by the K-pop BTS ARMY fandom.

Another example is that digital micropayments and online tipping (“da shang”) are common in China and account for a large portion of revenues generated by Tencent Music’s streaming apps, such as QQ Music. Such features and practices are also available elsewhere but have traditionally not been nearly as lucrative. 

These are just a few ways in which local cultures can influence music streaming practices and experiences. In other words, locality doesn’t just reflect what we listen to, it also reflects who we are.

3. Socioeconomic Status

Music streaming is also shaped by listeners’ socioeconomic status, which is often closely tied to region. Listeners in affluent areas are more likely to spring for the Hi-Fi, premium subscription tiers of services such as Tidal ($19.99 USD/month), Deezer ($14.99 USD/month), or Qobuz ($12.99 USD/month) – a cost compounded by the need to have expensive Hi-Fi equipment that can support lossless, high-resolution audio.

Low-income listeners with less expendable income, on the other hand, tend to be drawn to free (ad-supported) streaming services, such as Audiomack, SoundCloud, or Spotify’s free tier.

“Differences in average monthly income, coupled with alternate cultural views on the value of recorded music, result in a wide spectrum of monthly subscription costs across markets.”

Differences in average monthly income, coupled with alternate cultural views on the value of recorded music, result in a wide spectrum of monthly subscription costs across markets.

Spotify alone, for instance, has dozens of price points depending on where you are in the world. In lower-income markets, streaming services face a tricky balancing act between user revenue and user acquisition. One particularly interesting case is India, where listeners have been notoriously resistant to paying for music streaming

The available payment systems in any given country – such as credit card penetration – also, naturally, correlate with streaming uptake. Being familiar with user expectations and a region’s monthly average income statistics can be extremely useful for predicting consumer behaviour in that market.

4. Infrastructure

Local infrastructures also dictate music streaming’s opportunities and limitations. In certain parts of the world, the prevalence of high-speed internet, unlimited data, 5G networks, and smart devices make audio streaming relatively cheap, convenient, and consistent. 

Yet in parts of the world with less developed internet service and strict data caps, streaming audio files can be expensive and laggy, if not impossible. This is especially true for lossless audio files, which require a much larger bandwidth, can chew through data quickly, and result in constant buffering on slower networks. 

Many parts of the world still have low internet penetration – including a number of countries in Central Africa and South Asia – and this digital divide prevents many potential users from being able to stream music. Internet service and network speeds are advancing rapidly throughout much of the globe, but socioeconomic status and infrastructure are still key considerations for streaming services and artists wishing to launch in emerging markets.

5. (Meta)data

Data has become an increasingly important part of the music industries, and music streaming is no exception. Many streaming services as well as companies such as Chartmetric, Soundcharts, and Viberate offer artists and their labels extensive data analytics tools. Not only do these tools provide easily digestible statistics about play count, followers, and social media activity, they also break down user demographics, including activity by city and country.

If you’re an artist, knowing where your fans listen to your music and are most engaged is invaluable, and can influence decisions such as how you decide to route your tour. If you’re a streaming service, this data is indispensable both for assessing the viability of markets and creating localized, targeted advertisements. 

For many parts of the world, this level of data availability is relatively recent. It was only last year that Billboard and MRC Data finally launched the “Billboard Global 200” and “Billboard Global Excl. US” charts based on streaming data and digital sales.

“If you’re an artist, knowing where your fans listen to your music and are most engaged is invaluable.”

In addition to user data, the presence and quality of music metadata – the data encoded into audio files, such as artist name, genre, track length, etc. – is another important factor that varies regionally. Many services now use “enriched” metadata that tags everything from cultural associations (related artists, subgenres, venues) to musical content (tempo, key, instrumentation). Locality – where the music and artists are from – is also an important metadata tag that impacts how music is organized in streaming databases.

Metadata can affect everything from the quality of a service’s search function and algorithmic recommendations to whether or not rights holders get properly compensated for their music, so it’s important to get it right. Incorrect and incomplete metadata has been a major issue for music streaming, and this is especially challenging in many emerging markets where metadata is barebones, inaccurate, or missing entirely. 

This poses a particular problem for niche services launching in local markets, but major services also need to ensure that their metadata is specific enough that it won’t, say, lump distinct local subgenres together. Because metadata is so closely tied to music recommendation and discovery, it has important implications for cultural diversity in music streaming.

6. Local Licensing Laws and Publishing Rates

The millions of songs available on most streaming services may give the illusion that we have all the world’s music at our fingertips, but access to this music is painstakingly determined on a market-by-market basis. 

Countries have their own laws and regulations about licensing music for use on streaming services, and deals with rights holders and licensing organizations determine where streaming services launch, who has access to what tracks (geo-restrictions), and how artists get compensated for their work. Each country has their own collecting agencies, and publishing rates and splits (how the royalties are divided) can vary dramatically.

“The millions of songs available on most streaming services may give the illusion that we have all the world’s music at our fingertips, but access to this music is painstakingly determined on a market-by-market basis.”

Governments are also heavily involved in regulating music streaming, whether that’s the United States’s Music Modernization Act, the United Kingdom’s and Canada’s recent economic reports on streaming (surprise: they were inconclusive), or China’s recent ruling that Tencent Music no longer has exclusive streaming rights

Artists, record labels, and streaming services all need to be attuned to how regional legal frameworks and regulations can influence what they can do with their music and where.

Global Streaming, Local Listening

At a time when it feels like anybody can stream anything, any time, anywhere, it can be easy to neglect the importance of location. But with global streaming experiencing tremendous year-over-year growth, local markets are becoming increasingly viable and offer important opportunities – and challenges – for anyone working in the music industries. 

Whether you’re an artist, running a record label, or working at a music streaming service, you can’t afford to overlook local markets and cultures. Locality shapes what we listen to, how we listen to it, and even who we are. It may seem paradoxical, but regionality is just as important – if not more important – in the current age of global streaming.Music Business Worldwide

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