Music streaming in high-income markets runs on subscriptions. Users pay monthly, that revenue is pooled, and rights holders receive a share based on their proportion of streams.
In markets where subscription penetration is low, the model works differently, and the differences produce outcomes that surprise people applying assumptions from elsewhere.
The advertising problem
Where most listening happens on free tiers, revenue comes from advertising rather than subscription.
Advertising rates depend on the purchasing power of the audience, so a stream in a lower-income market generates a fraction of what the same stream generates elsewhere.
The gap is large — estimates of per-stream payouts vary considerably by market and by service, and the differences between high and low-income markets run to an order of magnitude or more.
Which means enormous listening volumes translate into modest revenue. A track with very high stream counts in such a market may generate less than a track with a fraction of those streams in a high-subscription market.
Why subscriptions are hard
Several reasons beyond simple affordability.
The free tier is genuinely good. Where the advertising-supported version provides most of the functionality, the marginal value of subscribing is limited to convenience features.
Price sensitivity is acute at the relevant income levels, and the international standard price point is a meaningful monthly commitment.
Payment friction has reduced substantially with digital payment adoption, and it was historically a barrier.
And there's a substitution effect. Where music is freely available through other channels — video platforms, informal sharing — the willingness to pay for a dedicated service is lower.
What services have tried
Pricing has been the main lever, with several adaptations.
Substantially lower price points than international standards, sometimes a fraction. Mobile-only tiers at further reduced prices. Short-duration passes — daily or weekly — which suit irregular income patterns better than monthly commitments.
Bundling with mobile operators, where the subscription is included in a data plan. This has been one of the more effective routes, because it removes the separate payment decision entirely.
Family and multi-user plans priced to make the per-person cost negligible.
Each of these expands subscription and reduces revenue per subscriber, which is the trade being made.
The consequences for artists
The economics affect what's viable to make.
An independent artist with a large domestic listening base may generate revenue that doesn't support full-time work, even at stream counts that would be substantial elsewhere.
Which pushes revenue towards other sources: live performance, brand partnerships, sync licensing for film and advertising, and direct fan support.
Film music has historically dominated in several markets, and the economics reinforce that — a track backed by a film release has promotion and an audience that independent work struggles to reach.
Independent music has grown considerably nonetheless, largely because distribution barriers have collapsed. Getting music onto platforms costs almost nothing now, which is a genuine change even where the revenue per stream is low.
The short-video effect
The most significant recent development, and it cuts both ways.
Short-form video has become a primary discovery mechanism for music. A track used in a large number of videos can achieve enormous reach very quickly, entirely outside traditional promotion.
The licensing arrangements between platforms and rights holders are complex and the revenue from video use is generally modest relative to the exposure.
So the effect is promotional rather than directly monetising. A track that breaks through short-form video may then generate streams, live demand and licensing opportunities, which is where the value is realised.
This has shifted what gets made. Tracks structured with an immediately usable hook, suitable for a fifteen-second clip, have a distribution advantage, and that's visible in how music is being written and arranged.
What it means going forward
The trajectory depends substantially on income growth and on whether subscription conversion improves as it rises.
The optimistic case is that these are early markets following the path high-income markets took, with subscription penetration rising over time.
The sceptical case is that a genuinely good free tier and established habits make conversion structurally harder, and that advertising-supported listening remains dominant.
My own read is that bundling is the likeliest route — subscription arriving as a component of something else rather than as a standalone decision. That's how a great deal of digital consumption has been monetised in these markets, and it works because it removes the moment where somebody has to decide whether music is worth paying for separately.
The catalogue question
One structural factor specific to these markets: rights to older film music catalogues sit with a small number of holders, and licensing terms for those catalogues shape platform economics considerably.
A large share of listening is to back catalogue rather than new releases, which means a platform's cost base is dominated by licensing deals for material recorded decades ago.
That has two consequences. Negotiating leverage sits with catalogue holders rather than with new artists, and the revenue distribution favours holders of historical rights over current creators.
It also makes market entry difficult, since a service without the major catalogues is not a viable substitute regardless of its other features. Which is a reasonable explanation for why the number of serious competitors in these markets has stayed small.