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Spotify rakes up 1 million users in India but the road ahead might not be easy

Spotify has gained over a million users during India launch frenzy but can it maintain the momentum.

  • Published: March 5, 2019 10:18 AM IST
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Spotify, which made its India debut, after rumors and speculations last week, is off to a great start. The Swedish music streaming platform has reportedly raced to 1 million users in the country despite a silent debut which was without any fanfare. According to The Verge, Spotify has gained 1 million users across its free and paid streaming service in India within a week. The details about the popularity of the service would come as a relief for its creators who are engaged in a copyright battle with the publishing arm of Warner Music.

It is rare for Spotify to disclose number of subscribers for a country or a market. During its earnings disclosure for the fourth quarter of 2018, Spotify revealed that it has 207 million monthly active users (MAUs) and 96 million of them pay for the Premium service. The numbers were higher than street estimates and its conversion rate jumped from 44.7 percent at the end of 2017 to 46.4 percent. It is not immediately possible to compare how Spotify’s user growth stacks up against other markets but it does seem to be doing well in India.

According to a report by Deloitte and Indian music industry body IMI published early this year, the total music streaming subscribers in the country stands at 150 million, or about 11 percent of the total population. The report adds that less than one percent of those streaming music subscribers pay for a subscription while about 14 percent of those have bundled subscription such as Amazon Prime or music service that comes bundled with mobile service. Rest of the streaming music subscribers opt for free subscriptions and Spotify has thus reached less than one percent of India’s music streaming community in its very first week.

Spotify has entered the country with a plan to bring more users onboard and is undercutting rivals by offering cheaper plans and flexible prepaid plans. With Spotify, Indian users will be able to pay for either a single-day pass or for up to six months for a premium access. Despite cheaper plans and fewer paying music subscribers, the country is considered as “sleeping giant” in the music streaming world. Prashan Agarwal, the CEO of Gaana, told Quartz recently that he expects the industry to grow to 400 million users within the next two to three years.

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India is seen as the potential growth market primarily due to the growth in smartphone user base and access to cheaper data plans. However, most streaming music players have been forced to rely on ads for their revenue, which is believed to be lower due to smaller streaming users. Spotify, on the other hand, has been late to the game and India already has players such as Gaana, Amazon Music, Apple Music, JioSaavn and Gaana. Both JioSaavn and Gaana combined are said to have over 80 million users. Spotify’s launch frenzy might be responsible for the company to rake up one million users within a week but it needs to be seen how it fares in the longer run.

The Verge points out that limited library of content and missing tracks from Warner/Chappell Music could impact the company who can find those tracks on other platforms. Spotify is engaged in a row with Warner over renegotiations of its global deal and tried to use a controversial path in Indian law which allows broadcasters to obtain a license for copyrighted works even in the copyright owner denies use, to offer catalog from Warner/Chappell Music. But the publisher got an injunction forcing Spotify to drop the catalog and with artists demanding more cut from streaming platform, it needs to be seen whether the streaming music company uses its global power to progress in India.

  • Published Date: March 5, 2019 10:18 AM IST