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Only 1% of Indonesians pay for digital music, says streaming service
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Yonder Music CEO Adam Kidron gives a presentation during the launch of Yonder Music Indonesia on May 23. (thejakartapost.com/Anton Hermansyah)
M
ost Indonesians prefer to enjoy free music from file-sharing sites or YouTube while surfing the internet, rather than buying songs, according to Yonder Music CEO Adam Kidron.
Unlike in the US where 5 percent of the population are music buyers, Indonesia has far fewer people willing to pay for music online by buying digital albums or subscribing to a streaming service, he said.
"Only 1 percent of Indonesians will pay for music," Kidron told thejakartapost.com on Tuesday, adding that a lot of music businesses focused on the 1 percent instead of catering to the 99 percent.
Therefore, to win a greater market share, music streaming services must be affordable, he continued. Yonder includes its subscription cost in data packages that prospective customers buy from mobile network operators.
It appears to be a successful strategy for the music streaming service, which secured US$10 million in investment from Malaysian Axiata Group Bhd in July 2015, positioning Axiata as the owner of 25 percent of shares in the company.
The investment enabled Yonder to use Axiata's international subsidiaries in nine countries in Asia to market its service, including XL Axiata in Indonesia. The service was launched in the country on May 23.
Users who subscribe to an XL AXIATA data package starting from Rp 100,000 (US$7.5) will also receive the Yonder premium service, with free unlimited music streaming. If they subscribe to a data package of lesser value, the user must pay Rp 35,000 per month for the service.
The low fees give Yonder a competitive advantage compared to Sweden-based Spotify, which is working with Indosat Ooreedoo to provide a similar service. Spotify charges Rp 149,000 for unlimited music streaming, plus Rp 49,000 per month for Spotify premium.
Adding to its comparative advantage, Yonder features 600,000 dangdut songs to attract Indonesian users, especially in the lower end of the market. "Dangdut is the new hip hop, the music of the lower classes," he said.
Meanwhile, to attract middle-income users, Yonder endorses popular artists such as Noah, Iwan Fals, Raisa and Afghan. Kidron is eyeing subscriptions from 1.5 million of XL Axiata’s 33 million customers within a year.
"If we can get at least 10 percent of XL's customers, we can be one of the biggest streaming services," Kidron said. (ags)
