Why India’s Music Streaming Scene Is Shrinking While Usage Booms
A look at Hungama’s exit, the paywall dilemma, and what comes next for homegrown music streamers
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Agenda
A Wave of Exits and Market Consolidation
Subscription-Only Models in a Low-ARPU World
Telco Bundling: The Double-Edged Sword
Strategic Pivots: From Streaming Apps to Music Services
The Ad-Supported Dilemma
Conclusion: Key Takeaways for Indian Streaming Platforms
Key Takeaways for Indian Streaming Platforms
And….Action!
India’s music streaming landscape is undergoing a dramatic consolidation. Hungama Music – one of the country’s homegrown streaming platforms – is shutting down on 15 April 2025, marking the third major Indian DSP (Digital Service Provider) to fold in the past 18 months. This follows the exits of ByteDance’s Resso in January 2024 and telecom giant Bharti Airtel’s Wynk Music later that year. After these departures, only two domestic music streaming players remain standing: Gaana and JioSaavn. What does Hungama’s closure – alongside the earlier Resso and Wynk retreats – reveal about the challenges and shifts in India’s music streaming market?
A Wave of Exits and Market Consolidation
Hungama’s farewell underscores a consolidating market where smaller services are struggling to survive. With Resso and Wynk gone and Hungama bowing out, the Indian streaming sector is increasingly dominated by a few players. Gaana (backed by Times Internet and once funded by Tencent) and JioSaavn (owned by Reliance’s Jio telecom) are now the only major indigenous platforms left. Their last-man-standing status highlights how difficult it has become for domestic entrants to compete in a market that is both hyper-competitive and low-margin.
It’s not for lack of demand: India’s appetite for music streaming is enormous. In 2023, on-demand music streams in India reached 1.037 trillion plays, making it the world’s #2 market by volume behind the U.S. Yet, translating that booming consumption into sustainable revenue has proven challenging. India’s recorded music business was worth only about $319 million in 2022, and even after growth to roughly $620 million in 2024, it remains a fraction of what similar streaming volumes generate in Western markets. In other words, monetization hasn’t kept pace with usage – a core issue underlying these shake-outs.
Global services have also encroached on the space, raising the competitive bar. YouTube is by far the most widely used music platform in India with an estimated 462 million users, thanks to its free access and vast library. Spotify, which launched in India in 2019, now reportedly leads in paid music subscribers with around 3 million paying users – more than any local service – while offering a free tier to attract listeners. And Apple Music significantly expanded its Indian user base through a partnership with Airtel (after Wynk’s closure) that bundled Apple Music for the telco’s subscribers. This global influx means that homegrown platforms not only battle tough economics, but also face competitors with deep pockets, strong branding, and patience to play the long game.
Subscription-Only Models in a Low-ARPU World
A major challenge underscored by Hungama’s exit is the struggle to convert India’s massive user base into paying subscribers. In mid-2023, Hungama Music made a bold pivot from a freemium model to subscription-only streaming, eliminating its free tier. This move mirrored similar experiments by rivals: ByteDance’s Resso also went premium-only in 2023 to try to improve monetization for itself and for rights-holders, and Gaana had dropped its free tier in 2022 amid financial pressures. The rationale was clear – India’s ARPU (Average Revenue Per User) for music streaming is among the lowest in the world, and ad-supported revenue wasn’t paying the bills. By forcing the issue with paid-only access, these services hoped to boost subscription revenue and reduce content costs.
The outcome, however, has been largely disappointing, revealing the risks of a paywall-only strategy in a price-sensitive market. Hungama’s user base never scaled to the levels of its competitors even before the switch, and cutting off free access likely stunted its reach further. Resso’s premium-only experiment couldn’t save it from shutting down after just three years in India. Gaana’s removal of free listening also caused a drop in active users, and the platform reportedly struggled to retain listeners until it could raise new funding.
The core problem is that most Indian consumers are still unwilling to pay for music streaming – or can’t pay much. According to a joint EY-FICCI industry report, the number of paid music subscriptions in India was about 8 million in 2022, growing to 10–11 million in 2024. But this is out of an active streaming user base of well over 175 million users. In other words, over 90% of streamers in India use free tiers. While paid subscriptions did increase (fueling ~10% growth in industry revenue in 2023), the total paying audience remains tiny relative to the population. An industry projection suggests the subscriber count could double to ~15 million by 2026 “if prices remain unchanged and the industry aligns on incentivizing users to pay” (musically.com). Even that would still be a drop in the bucket of India’s 700+ million internet users.
Crucially, these reports highlight that keeping subscription prices ultra-low and/or bundled may be the only way to significantly expand the paying cohort. EY-FICCI analysts note that to grow beyond early adopters, services may have to price around ₹1 per day (roughly $0.01/day) or find equivalent bundle deals to lure cost-conscious listeners. Currently, a typical music streaming sub in India costs about ₹99 per month ($1.20) – already far cheaper than in Western markets, but evidently still a hurdle for many. The Hungama/Resso experience shows that simply turning off free listening without a compelling incentive can backfire, as users have plenty of free alternatives (YouTube, radio, piracy, etc.) in a low-ARPU environment. The freemium-to-premium conversion remains the holy grail that no local player has fully cracked at scale. And as Hungama’s fate illustrates, banking everything on subscriptions without sufficient volume can quickly become unsustainable.
Interestingly, the push to drive subscription uptake may have even dented overall industry revenue in the short term. The latest EY report on India’s media and entertainment sector noted that music revenues fell by 2% in 2024 to ₹53 billion (~$620 million) – a rare dip – due in part to “the shutdown of some streaming platforms, reduced streaming rates and a push to convert free consumers to paid”(musically.com). In other words, clamping down on free listening (and perhaps renegotiating lower rates with telcos and advertisers) temporarily shrank the pie, even as paid subscriptions hit record highs. For Indian streaming startups, this underscores a harsh truth: charging more per user may initially mean reaching fewer users, and the math only works out if enough of those remaining users actually pay up.
Telco Bundling: The Double-Edged Sword
In India, telco bundling has been a critical factor in music streaming distribution and monetization. Many streaming apps gained users (or even came into existence) via partnerships with mobile carriers, who offered music services as a value-add to data plans. Wynk Music, for example, was essentially an arm of Airtel’s mobile business – free for Airtel subscribers – which helped it amass over 100 million users at its peak. JioSaavn similarly benefits from being part of Reliance Jio’s ecosystem; Jio has bundled free JioSaavn Pro subscriptions with certain prepaid plans, leveraging its massive telecom subscriber base to drive music engagement. For streaming platforms, these deals can rapidly boost user numbers and listening hours by piggybacking on a telco’s customer reach.
However, bundling can be a double-edged sword. The fate of Wynk illustrates how reliance on a telco’s strategic direction can make or break a service. In mid-2024, Bharti Airtel decided to shut down Wynk Music after a decade, opting to merge its offering with Apple Music via a new partnership. Essentially, Airtel chose to hand off its music subscribers to a global player (Apple) rather than continue investing in its in-house app. This move instantly gave Apple Music a huge boost in India, but it also meant the end of Wynk as a standalone platform. For Airtel, bundling with a well-known international service may have been a way to offer a premium perk (Apple Music’s catalog and brand appeal) to users without the costs of running their own streaming business. For Wynk’s team and the Indian startup ecosystem, it was a sobering reminder that a bundling deal can evaporate if a bigger partner pivots strategy.
JioSaavn’s trajectory has been different – as part of Jio, it’s more vertically integrated (Reliance owns the telco and the streamer), so the incentives align to keep it running. Jio has used JioSaavn as a loyalty feature, advertising “free unlimited music” to Jio network users and incorporating JioSaavn’s content into Jio’s super-apps. This kind of tight coupling (often with implicit cross-subsidy from the profitable telecom business) might be one reason JioSaavn is still around while others faltered. Gaana, on the other hand, did not have a dedicated telco parent, though it pursued bundling partnerships (for instance, tie-ups with smartphone makers and carriers for pre-installs, and discounted plans via digital wallets and e-commerce apps). Lacking a permanent distribution channel, Gaana had to rely more on marketing and its content library to acquire users – and when it ran into monetization issues in 2022, it cut off its free tier to reduce costs, a move that likely required support from its investors to weather the user churn.
All of this points to a key trend: telco-media convergence. In India, as in many emerging markets, telcos have been gatekeepers for digital services, and music streaming has thrived when part of a broader bundle (e.g. “free with your data recharge”). Going forward, we may see even more integration – or alternatively, telcos simply bundling global services (like Airtel with Apple, Vodafone-Idea with XYZ service, etc.) instead of fostering homegrown apps. For Indian streaming startups, securing a telco partnership can provide a vital lifeline to millions of users, but it also means ceding some control over your destiny. Hungama, notably, did not have a major telco tied to its music app in recent years, which may have made it harder to compete for mass adoption. The bundling model clearly works to drive numbers – but it works best for those telcos and platforms that can afford to subsidize or underwrite the cost of music to keep it “free” for users. In a low-ARPU scenario, that usually implies a large parent company footing the bill.
Strategic Pivots: From Streaming Apps to Music Services
Hungama’s shutdown also highlights a shift in strategy that could become more common: pivoting from pure streaming distribution to broader content services and B2B partnerships. While Hungama is closing its consumer music app, its parent company (recently rebranded as Hungama OTT) is not disappearing. In fact, Hungama is refocusing on other media offerings – it will continue to run its movies, original web series, audio content and podcasts platforms, essentially an OTT entertainment super-app sans music. Moreover, Hungama is doubling down on its role as a music content and talent partner rather than a mainstream streamer. Just months before shutting the app, Hungama Digital Media inked a strategic partnership with Universal Music Group’s Virgin Music division. The goal of that deal was to leverage Hungama’s strength in Indian regional music and Virgin’s global network to promote Indian independent artists internationally. And in early April 2025, Hungama relaunched its Artist Aloud platform – a distribution and talent-management service for indie musicians – signaling intent to support artists and content creation even as it exits the streaming delivery business.
In essence, Hungama is pivoting from being a DSP for end-users to being a service provider for artists, labels, and fans through other channels. This might include helping artists distribute their music (to surviving DSPs like JioSaavn/Spotify), organizing live digital events, creating original music programming, or bundling music with other entertainment. It’s a recognition that the value in the music streaming chain isn’t only in owning the listener interface; there’s also value in owning content, curation, and artist relationships – areas that might be less capital-intensive and less crowded. Other local players have tried similar things: JioSaavn launched its own artist-focused label JioSaavn Artist Originals in 2018 to produce exclusive music from Indian artists (as a differentiator and IP asset). Gaana experimented with podcasts and even short videos (the HotShots feature) to increase user engagement beyond just songs. And all players have pursued brand partnerships and live events (for example, Gaana Live concerts or JioSaavn live sessions) to broaden their footprint in the music ecosystem.
The trend suggests that surviving in India’s music streaming market may require diversifying into adjacent services. If running a standalone streaming app isn’t profitable by itself, the business case might improve if that app is part of a larger suite – or if the company behind it monetizes music in indirect ways. We see hints of this in how global companies operate in India too: for instance, Amazon Prime Music is bundled as one of many benefits in Amazon’s Prime membership (the music service itself doesn’t need to turn a profit independently as long as it adds value to Prime). Likewise, YouTube Music rides on the back of YouTube’s massive ad-supported video platform and the YouTube Premium bundle. Indian startups are realizing they may need to align with bigger platforms or carve out niche expert roles. Hungama’s turn toward artist services and OTT content curation is one path; others might focus on being experts in regional language music production, or offering white-label streaming tech to other businesses, etc. The core shift is from B2C streaming to B2B2C or hybrid models, where revenue can come from rights management, content licensing, or enterprise clients, and not solely from millions of Indians paying ₹99 a month.
The Ad-Supported Dilemma
Underpinning many of these issues is the central tension between ad-supported vs. subscription-supported models. India has long been an ad-supported music market – from the days of film songs on radio and TV, to YouTube’s dominance today. Even on dedicated music platforms, most users have opted to listen free with ads rather than pay. This makes advertising revenue critical, but the economics of ad-supported streaming in India are tough. Advertising rates (CPMs) in India are much lower than in Western countries, and they often can’t cover the high costs of music licensing at scale. For perspective, industry data indicates that only 18% of streaming revenue in India comes from paid subscriptions – meaning a vast majority (over 80%) of streaming revenue is coming from ad-funded free listeners or bundled payments. Yet that ad money is being spread over billions upon billions of streams. The result: revenue per stream is mere fractions of a cent, and a service must achieve enormous scale (and have very low costs) to break even on ads alone.
Hungama’s original model, like Gaana’s and others’, relied on this ad-supported scale. They offered unlimited free listening (often even offline downloads for free in earlier years) hoping to monetize via ads or upsell to premium. But with the explosion of alternatives, capturing enough attentive ears for ads became harder. YouTube’s 4.6 trillion music streams in India last year (musically.com) soak up a lot of casual listening time and advertising inventory. Many Indian consumers are content to use YouTube (or TikTok-like short video apps) as their music source, where labels earn some ad revenue and users pay nothing. This leaves dedicated music apps fighting over a smaller slice of listening time where they can insert audio ads. Some platforms tried to innovate on ad formats – for example, rewarding users with extra song skips or downloads if they watched a video ad – but the revenue impact remained limited.
Moreover, the advertising that does occur might not translate to high revenue shares for the streamers. A portion of ad income goes to rights holders as per licensing deals, and another portion goes to the tech and distribution costs. So even if an app had tens of millions of free listeners, the net income after royalties could be minimal. By 2022, Gaana reportedly couldn’t sustain operations with its ad revenues and was accumulating losses, prompting its move to cut off free access. Hungama likely saw similar trends. An additional complication is that free users often hop between services – there’s little lock-in. Someone might use Hungama’s free tier one day, then Spotify’s free tier the next, depending on mood or convenience, since all were similarly priced (free).
The fundamental challenge is finding a sweet spot where ad-supported listening can be monetized enough to cover costs or serve as a funnel to paid. Spotify’s approach in India (and globally) has been to keep a robust free tier to continually convert a percentage of users to paid – it’s playing the long conversion game with global resources to back it. Indian firms without such deep pockets haven’t been able to sustain that approach for long, as evidenced by the retreat from free tiers. The transition to a more subscription-centric market will be painful (as seen by the drop in users and revenue during 2024’s conversion push (musically.com)), but it might be necessary in the long run if per-user ad revenue remains ultra-low. Alternatively, some industry voices suggest new forms of monetization: micropayments for specific content, tiered “gold” memberships with perks, or higher-priced plans that include non-music goodies. These are experiments yet to be fully tried at scale in India’s music streaming, but given the current predicament, we may see them in coming years.
In summary, the ad-supported model in India’s music streaming has proven difficult to scale profitably, but a pure subscription model is equally hard to pull off given consumer habits. This dilemma is at the heart of why even with hundreds of millions of music consumers, multiple platforms have struggled to survive.
Key Takeaways for Indian Streaming Platforms
The turbulence in India’s music streaming sector offers several lessons for founders and operators navigating this market:
Embrace Bundling and Partnerships: It’s increasingly clear that streaming services can’t go it alone in a low-ARPU market. Partner with telecom operators, device makers, and other platforms to bundle music streaming into larger offerings. Bundling not only expands reach but also subsidizes the cost for users (e.g. free music with a data pack). The Airtel–Apple Music deal and JioSaavn’s prepaid bundles show that aligning with a bigger ecosystem can drive user adoption – and may even be necessary to compete. For a startup, this might mean pitching your service as a value-add to a carrier or a super-app rather than trying to acquire every user directly.
Diversify Monetization & Content Offerings: Given the squeeze on streaming margins, think beyond just the monthly subscription. Explore alternate revenue streams – advertising is one, but also live events, merchandising, VIP experiences, podcast content, or even B2B licensing deals. Likewise, differentiate with content: focus on local and exclusive content that global giants might overlook. Services that specialize in regional-language music, independent artists, or original programming can carve out loyal audiences. Building an ecosystem of content (music, video, podcasts) and services (talent promotion, music distribution) can create multiple income channels. Hungama’s pivot toward artist services and multi-format OTT content is a case in point, illustrating a route to stay relevant in music without solely relying on the classic streaming model.
Balance Free vs. Paid with User Habits in Mind: Freemium isn’t a dirty word – it’s a proven model to onboard users – but it must be deployed judiciously. Rather than eliminating free access outright, consider metered or feature-limited free tiers that can upsell users over time. For example, free radio-style listening or capped hours might keep the funnel open without burning through licensing costs. Also, consider sachet pricing (daily or weekly plans for a few rupees) to lower the entry barrier to paid usage. The goal should be to gradually nudge users up the value chain, converting a percentage to paid, without alienating the vast majority who are used to free content. In India, acquiring 1 million paying users might require engaging 10–20 million free users first. As one industry report noted, reaching 15–20 million subscribers will likely require pricing around ₹1/day or creative bundles (musically.com). Founders should plan for this reality and bake in a long-term conversion strategy – and ensure they have the runway (or partner support) to sustain it.
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