'The Big Three' Intervention Might Delay Spotify India Launch

Spotify lovers will have to find other means to manage their music as the Sweden-based music streaming service’s India launch might not happen this summer. Earlier this month, Spotify decided to offer advances to indie artists and record labels in exchange for non-exclusive licensing of their music directly to their service. This has stirred up tension amongst labels across the world. Reportedly, the three largest record labels, also known as ‘The Big Three’ – Universal, Sony and Warner Music are considering blocking new territorial licenses. If this gets implemented, Spotify's India launch will be delayed even further. Since the announcement of the Spotify launch in India in March, Daniel Ek has been battling a couple of obstacles to enter the Indian market:

Established Platforms

With the growing rate of online music streaming platforms in India, there is cut-throat competition amongst the leading service providers. The already established services provided by Jio-acquired Saavn, Gaana, Amazon Prime Music, Google Play Music, Mi Music (Xiaomi) etc. have heightened the bar and with YouTube tapping this market, the expectations for qualitative services are beyond regular standards.

Localized Pricing

Price will be one of the most crucial factor while entering the Indian market as most of the prevalent music streaming service providers charge a nominal fee amounting to Rs. 99 approximately per month. Apple Music charges a slightly higher fee of Rs. 120 per month with a cheaper monthly pack for students. With so much variety in the market, Spotify has to evaluate how to induce 'premium pricing' to target audiences beyond brand lovers.

Medium of Payments

Spotify has a stringent perspective when it comes to making payments; it only allows card payments in US and direct carrier billing (DCB) in some markets. With the increasing dependency on cashless platforms like Paytm & MobiKwik, it will be interesting to see how dynamic Spotify can get to cater to the Indian audience in terms of making payments. Meanwhile, Spotify's current move to strike direct licensing deals with artists and labels is a bit dicey. The licensing agreements with major record labels limit the brand from buying catalog or recordings under the terms of its record labels. There is also extensive ambiguity when it comes to competition. According to reports, it has been stated that Spotify signing a few no-name acts to label-type deals would likely not be considered a breach of contract, but signing an established superstar artist could be a violation, depending on the deal terms, given the degree of competitive threat. Direct deals are not new to digital platforms. Apple Music has signed a number of short-term exclusive deals with A-list artists in the past but has pulled back after record labels started maximizing exposure for new releases. After India, Spotify is planning it's launch in South Korea, Russia, Middle East and eventually Africa for which it would need territorial licenses. However, direct licensing has landed the brand under the scrutiny of The Big Three thus jeopardizing it's expansion plans. (Image Credits: Spotify FB Page)