The Product

What is Youtube Music?

YT Music is a music streaming service developed by Youtube. It provides a personally tailored interface for streaming music, allowing users to browse through songs and music videos on YouTube based on genres, playlists, and recommendations.

Selection Framework

Considering the insights from the user research it was observed that YouTube Music had it's users hooked onto the service from Day 1 and the users continued using the service in future as well. Once retained, the users purchased the subscription plan within a week of using the service to experience the ad-free music along with the superior music recommendations.

These insights support the fact that YouTube Music has hit Product-Market Fit (PMF).

Problem Statement

Music listeners often face these problems -

• Not finding song covers/independent artists on their music streaming service
• Having their music listening experience disrupted by advertisements
• Songs being removed from the streaming service (https://www.ndtv.com/india-news/spotify-removes-hundreds-of-bollywood-songs-from-music-app-internet-is-not-happy-3880955)

Solution Statement

YouTube Music addresses the key pain points of any music listener by providing access to a plethora of songs from official channels, fan covers, live concerts, and friendly jams all weaved together in it's user-centric recommendation engine making the music journey of a user, very personal and easily accessible.

YouTube Music Premium offers an ad-free experience at an affordable price point. Also the risk of songs being removed from YouTube is way less than the same happening on any other music streaming platform.

Note: YouTube Music doesn't shy away from utilizing the user data collected through YouTube during the last decade to understand what a user really enjoys.

Value Proposition

• Smart Music Recommendations - YT Music uses the listening history and preferences of users to recommend new music as well as create personalized playlists based on their listening habits.
• Access to Covers, Live Performances, and hard-to-find music - YouTube Music library holds more than 80 million songs including remixes, fan covers, slowed & reverbed music, among new releases and classical hits as well. (Just a reference, Weekend Live Performance only available on YT Music streaming service or Shirley Setia's cover songs which I used to listen to years back can't be found on other apps)
• YouTube Premium adds Value - Users find going for YouTube Premium subscription, which includes ad-free content on YT Music and YouTube, as the most value-for-money option as it's a slight increase in price from just the YT Music subscription but adds premium experience to YouTube as well.

The User

Ideal Customer Profile (ICP)

For detailed information collected over Google Form: https://docs.google.com/spreadsheets/d/1zMi13JwR7--Vi_a0JJ5N7-FBj9fURxqxc-ez24uTQFE/edit?usp=sharing

Common Grounds for YT Music's ICP

• Young folks (16-40)
• Loves Listening to Music at least for >3 Hours per day
• Will pay for the convenience and access to YouTube's library
• Spending money on OTT subscriptions, Food Delivery
• Spends time on social media and with friends
• Loves travelling, fitness activities, watching movies/shows

Prioritization Framework

🏬The Market

TAM, SAM & SOM

Approach for Calculation

Top Down Approach is being used for this calculation. We'll be identifying the total population on the country level and then filtering out the same in the demographics of ICP. Once this is achieved, we'll further break the market size into cities which are the serviceable market for YT Music. Eventually this led us to remove the competitor's market share and non-paying users to arrive at the Obtainable Market size.

External Research Outcomes

• Music as a way of life comes out very clearly as audiences in India listen to music for an average of 25.7 hours a week, above the global average of 20.1 hours a week.
• As per the 2022 statistics, 67% of people think music is important for their mental health
• 71% discovered new music at least once a week
• 44.5% used paid audio streaming services
• While the use of overall music streaming services was the highest in the youngest age group surveyed (16-24) at 93.9%, the group showed the lowest rate in the use of paid tier of music streaming (36.8%), reasons being the presence of YouTube and the cost of subscription services which they find too expensive. The use of the paid tier of music streaming services is the highest among the 25-34 age group (52.4%) who are more likely to pay to listen to music without interruption.
• Streaming services account for ~87% of the total music industry's revenue in 2021.
• Audio streaming accounted for the majority of listening hours (25.8%) while video streaming accounted for nearly 19% of the listening time indicating the preference of Indian respondents to enjoy music accompanied by visuals.
• Google Search Trends:
  YouTube Music is still far behind spotify in terms of google search trends.
  While talking about the trends for premium subscription for YouTube Music and Spotify, we see a sharp rise and decline in Spotify premium searches. The primary reason appears to be Spotify's collaboration with Flipkart which made users search for queries such as How to redeem flipkart spotify voucher? Also it was observed that 4 out of the 10 rising queries related to Spotify were related to finding a free Spotify APK so as to listen to uninterrupted music for free (ICP 3 has a large market size and less willingness to pay)

Calculation

• Total Population under the age of 40 - 74%
  Total Population in 0-14 age group - 25.31%
  Total Population in 15-40 age group - ~50%
  
  Total Population of India is 143 Crores.
  
  YouTube Music has an ICP age bracket of 16-40 years. Hence we'll consider only these users under our Total Addresable Market. As per research, we expect ~71 Crore users (50% of total population) in this age bracket therefore making them eligible for our ICP.
  
  On average we observed that users pay ~INR 150 per month for the premium subscription currently. Assuming the future pricing, we expect ~INR 180 per month per user.
  
  Considering the service gets better the longer a user has been retained, the ICP 1 are assumed to renew the subscription at least for 4 years. ICP 2 are assumed to be retained for 2 years minimum.
  
  Considering the insights from the user survey done, we've found that the ICP 1 are more than ICP 2 but considering that YoutTube Music should be aiming to add more ICP 2 for increasing their user base and improving the potential of future revenues when these users start earning, we've kept the ratio of both these categories at 50% while dividing the total users.
  Hence we've considered an average retention of 3 years per user for our TAM calculation.
  
  TAM = 710000000*(180*12)*3 = $58 Billion (or 71 Crore Users)
  
• Estimated Population residing in Tier 1 & 2 cities - 37 Crores (~26% of the total population).
  We're considering only Tier 1 & 2 cities under SAM calculation as user surveys indicate that willingness to pay for convenience is more in Tier 1 & 2 cities. So it's logical to service the market areas where people are willing to pay and adopt the product.
  
  SAM = 370000000*(180*12)*3 = $30 Billion (or 37 Crore Users)
  
• Of the Servicable Addressable Market, we expect YouTube Music to hold a market share of 25% in the coming years (YT Music already holds 8% (30% of largest player's market share) market share only after Spotify (26%) and JioSaavn (24%) that too within 3 years of it's launch in India (launched in Feb 2020)).
  
  Also considering the fact that only 44% of the users are using a paid streaming service in India.
  
  SOM = SAM * 44% * 25% = $3.3 Billion (or 4 Crores)

🛣️ The Channels

Selection Framework

YT Music has hit PMF but still does not have a strong proven channel of acquiring users. It's experimenting on paid marketing but I feel they've not identified the right marketing pitch and creative fit yet and their referral program is just WOM with no reward system in place. Considering these observations, I would classify YT Music under Early Scaling and they should be focusing on experimenting different channels to find the ones that are really working for them.

What YT Music needs now is to experiment with new channels which can give feedback faster and have a large scale of reaching out to target customers. Also they need to find their right customer profiles and marketing pitch which can then be delivered through these channels to find a creative fit that can be further scaled in the next stage of Late Scaling.

P 4 - Organic: This has been prioritized lowest, based on the fact that YT Music should find quick ways to acquire users with low to medium lead times as it needs to experiment with a lot of channels to find the ones that are working or not working for them. This can be done for creating buying intent through Content Loops.

P1 - Referrals:
Considering the user interviews, 41% of the users referred YT Music to someone and made them a fan of the service. This has been prioritized the highest as it's a quick way to acquire potential users and the cost involved is less with medium lead time so as to measure the impact of the same and decide if this channel is working or not.

P 3 - Paid Ads: This channel should be experimented with as it's a quick way to see the impact with low lead time and High scale and would be prioritized above Organic. Understanding the users allowed me to prioritise this after Product Integrations because the users are not unaware of subscription services but choosing not to buy due to free content available and higher cost of subscriptions. Hence focus is more on proving the value first through integrations and then focus on paid ads to create hooks.

P 2 - Product Integrations: This channel is a great way of acquiring users on a large scale but would be prioritized below Referrals due to being comparatively costly. Also since the main motivation for users buying is the convenience of having great music recommendations from YouTube's library and that value proposition can be better showcased with integrating YT Music with applications which are frequently used by the users compared to simply showing advertisements to targeted audience.

Deep Dive into 2 channels - Referrals and Product Integration

Referral Program 😮

The current Referral program for YT Premium was not found when I looked through the YT Music's application. There is no mention or segment where a user can refer the subscription. COnsidering a lot of users purchased the subscription based on recommendations and WOM, I feel there should be a strong Referral Program to reward it's users.

The current YT Music app (on YouTube Premium) looks like this:

Okay so how should a Referral Program for YT Music look like?

Well that's what I'll be going to explain in detail below:

1. What's the brag worthy factor of YT Music?
   The music recommendations personalized for each user based on their listening habits and current mood. Users Access to YouTube's extensive library of Live Songs, Fan covers and Independent Artists was another feature that most of the users found to be something that's not available on any other streaming service.
   
2. What should be the platform currency?
   "Music Notes". For every referral, a user gets a Music Note which would be 1 line from the Chorus of a song or a particular segment.
   Eg. If I referred someone who purchased a YT Music Premium or YouTube Premium. I would receive a Note with text saying "(Ooh) We're only getting older, baby" (from Night Changes by One Direction). For every new referral I'll be receiving the next line of the chorus, till I complete the Chorus.
3. Who will you ask for Referral?
   Ideally any user who falls under the ICP 1 category should be prompted for this program. They're music enthusiasts and would be more connected to folks who are ICP 1 category. They're the segment with highest paid members and therefore targeting them with rewards that meet their desires and needs would help YT Music to gain more potentially paying customers.
   ICP 2 are prioritized after ICP 1 as they don't have the intent to pay that much. Still if they go ahead with the program, the rewards are designed to benefit them considering where their time is spent and allowing them to enter the subscription model with a lower entry because that was the most common reason ICP 2 didn't pay for the subscription.
4. How should the user discover the Referral program?
   
   It should be available as a separate tab in the YT Music application and website. Reason being, users will not be referring this casually. They'll be sharing songs but bugging users with a promotional message every time a song is shared would hurt our brand. Hence it's advised to keep Referrals in a separately visible spot where anyone can come when they're looking for the same.
   
   Also when a big music fest/event is going to happen premium users can get a pop-up that they stand a chance to win 2 free tickets to "Event Name here". Once they click on the same Referral tab will open allowing them to explore the details.
5. How will the user refer and track their referrals?
   There will be Referral Code and social media links as well. Considering most of the users are active on Whatsapp and Instagram dedicated share buttons for these apps would be present there.
   
   This is how the Referral Tab would look like.
   This also incorporates the tracking aspect for the user as it is indicated on the page so as to allow a user to see how many people they have referred to and where in the referral program they're standing.
   This is how a Whatsapp chat would look like when someone refers using Whatsapp.
6. Why would a user refer?
   We understand that ICP 1 would refer the service more frequently and would be motivated by something other than just Money. This is the reason I've identified a reward system which can add an Aspirational Value (A signed album from any artist on YT Music) and improve user's listening experience while also catering to their desires (attend a Coldplay/Weekend concert). Therefore, the referral system by design allows users to strive for their desires and wants related to music.
   
   Considering that ICP 2 would also be referring but not to folks who would actually purchase a subscription plan immediately. I've allowed the reward system to consider the fact that most of these users are consuming content through Netflix and other OTTs. We incorporated a reward so they can avail their favorite OTT service free for a few months.
   
   🤯This Referral Program has Levels:
   Level 1 - Refer to any friend who purchases a subscription of YT Music or YouTube Premium and they'll receive a Music Note. With every referral they'll get the next line of the song as Music Notes. Once a user has completed 1 Song's Chorus (usually of 4 lines), they're eligible to avail 20% off on their next subscription (monthly or annually).
   Then after completion of 2nd song chorus, a 3 Month Netflix or similar subscription for Free. While after completing 3 song chorus, they're eligible to receive an Earphone or Speaker for Free.
   Level 2 - This level only unlocks when a user has referred to people who purchased or upgraded to Annual plans within 3 months of referral. This means ~4 annual membership referrals unlocks the aspirational and the most desired rewards in the program.
   Now once a user has completely collected 4 song choruses (including 4 annual subscription referrals) they get a reward of 2 Free concert tickets within the country in the coming 6 months.
   
   Now for the last reward a user has to collect song choruses only through annual subscription referrals. They'll receive a Golden Musical Note in this Stage and on completion of all Golden Mucial Notes for the last song, they can claim an Origianlly Signed Album of any artist available on the YT Music application.
7. Why will a user keep on Referring?
   The referral program is designed to keep the aspirational goals and desires of users who are music lovers and enthusiasts aligned with their efforts on referring the service to other folks. The user will get dopamine while collecting Music Notes and unlocking different levels of the referral program. Also the rewards have been decided upon by carefully understanding the user's needs (which can be fulfilled initially) then wants (which will come next like Speakers) then Desires (which are at the top like Concerrt tickets and signed album). These rewards will have a Pull effect on the users so that they can achieve more in their music journey.

🔌Product Integration

Considering the user interviews, it was observed that everyone was using Whatsapp and more than 80% users were using Instagram/Snapchat, Google Maps, Zomato/Swiggy and Netflix/Amazon Prime.

So for a good product integration channel, we'll see which one can YT Music actually add value along with other factors such as frequency of use and scale of users that can be reached through such channels.

Now while selecting a channel for product integration, we found that YT Music can add value to Whatsapp, Instagram, Snapchat, and Google Maps so we won't be designing an integration for Netflix, Prime, Zomato, and Swiggy.

Now to prioritize which integrations should we go for building, we have a framework mentioned below where we'll compare the potential integration options on factors such as how much time will it require to go live, how much tech effort would be required and how many users we expect to get.

While prioritizing the channels for product integration, we understand that users are active on whatsapp but the main reason being it has become a nessecity and finding a creative fit over whatsapp would be difficult for YT Music because the users of Whatsapp have a diverse demography and wouldn't be the ideal choice considering that other product integrations have better possible outcomes.

As per the observations from user interviews, users prefer listening to music while commuting or they would prefer to listen/share music with their friends while hanging out virtually or in person. Since Snapchat is designed to keep the user on the app for a short time frame which won't support any integration with music streaming service. Hence, designing a product integration for Google Maps and Instagram should be prioritized over other apps.

While Google Maps has already an integration with YT Music although that can be improved upon, I'm going to design the integration for Instagram as it doesn't exist for now and would be a value addition to YT Music users as well.

What would the integration do?

YT Music integration in Instagram chats would allow users to listen to songs together while chatting over Instagram.

YT Premium members can be offered the option to continue listening to the music room even if they leave the chat. This will pull users to go for subscription plans in case they want the convenience and uninterrupted music experience from this integration.

Why the product integration with Instagram would work?

If we consider the user base, the youth which is the ideal customer would prefer to remain active over Instagram rather than whatsapp (also being associated with the cool social factor Instagram brings). When talking about music, Instagram is more inclined towards better utilising this integration. YT Music can allow users to listen to music with friends together or explore new music together all while leveraging the YouTube's library.

Why would Instagram work with us for this integration?

YT Music Integration would allow Instagram to keep users active on their application increasing the average user time spent on the application. Instagram would be happy to offer any feature or services which can retain users for even longer period of time.

Who'll be using this product integration?

The ICP 2 is generally college going youth in 16-24 age bracket. They're using Instagram more frequently than ICP 1 & 3. These users want to remain socially active and stay connected with friends. Instagram offers them an entertainment to relax between classes, spend free time sharing content, etc. These users although do not have a significant appetite to pay initially if free options are available (as evident from the search keywords on Google trends) or cost of subscription is high but they do want convenience. Since they're already power users of Instagram, they would be more willing to adopt to new features and listen to music together with friends. They can also be influenced by paid marketing while introducing this new integration.

How will the user discover this integration and how will they use this?

The user's journey on Instagram application is shown in the below attached Whimsical.

Whimsical Link: https://whimsical.com/user-is-free-wants-to-chat-with-friends-LwE87mkSWKKJtWCmEyvq5h

Visual Representation after Integration

🗣️Personal Remarks:

Special Thanks to YT Music team for keeping me sane during the late-night hours spent for this project. I've listened to music for almost 70% of the time I was working on this project and that too on YT Music. Once I set the song I want to start with, it just knows which songs I would enjoy and keeps on playing a personalized playlist for me. I've been asked a lot of times by people that what playlist are you listening to or can you share your playlist, it's great! My secret is I don't have a playlist, it's just what YT Music recommends based on my music preferences.

#YTMusic