Spotify – the largest music streaming service in the world has finally crossed the last hurdle before its Indian release. The news is that Spotify has fast tracked their deals in order to secure licenses with major Indian labels. T-Series one of the biggest music labels in India and also the most-watched Youtube channel in the world has confirmed that they are working along with Spotify. The Indian streaming market is said to be the fastest growing market in the world and with a population of 1.3 Billion people it has a huge growth area as far as subscribers are concerned.
“India specifically is a very fragmented marketplace with lots of different local labels, lots of different local publishers,” – Spotify Chief Executive Officer Daniel Ek
Spotify has announced that it will make its Indian release within the next six months. Recently the streaming service made its debut in 13 territories across Middle East and North Africa. Spotify Technology SA is preparing to introduce its service as soon as the first quarter of 2019, said the people, who asked not to be identified because the information isn’t yet public.
The music streaming service wants to enter “Rest of world” markets which is basically a group that spans from Australia and Japan to Israel and South Africa. Spotify’s core market is North America, Latin America and Europe. More than 90% of Spotify’s paying subscribers come from this region and they account to less than a third of the world’s population. The plan is to provide an extended free service initially to its users and with time lure them into becoming paid subscribers.
Reports suggest that Spotify’s investors have been underwhelmed by the slow subscriber growth but are aware of its huge potential. There was a drop in stock by 30% since its peak in July. Spotify is yet to make any profits and in July 2018, it’s net loss nearly doubled to $461 million. As Spotify grows, so do its royalty payouts to record labels and other music providers. This is a major reason which is hampering the streaming service’s potential profits. With the Indian release being eminent, Spotify are hoping to turn the tables here.
Spotify sees India as a relatively quick way to generate really meaningful subscriber number – Mark Mulligan, Midia Research
The company has bee working on its India debut since a while now and have currently employed 300 people in their Mumbai office. Back in March 2018 it was reported that Spotify had directly contacted musicians in order to secure licenses to stream their music. This activity triggered a lot of Indian labels then and many of them were against its Indian release. The streaming service has pushed ahead regardless, making deals with almost all major labels in India.
When it comes to the number of premium subscription users, Indian market is far behind compared to other nations as majority prefer Youtube for streaming. There are around 100 Million streaming service users in India but a tiny fraction pay for these services.
It will be really interesting to see how Spotify will manage to turn the free tier customers into paid subscribers. Most likely Spotify will tie up with Telecom operators to create lucrative offers for paid subscription. Reliance Jio which owns Jio Music and also Saavn will be a tough rival for Spotify in the days to come. Another worry for Spotify is to adapt to the Bollywood crazy audience in India and cater to them.