March 5, 2019 at 17:49One of the streaming giants launched in India and attracted a million users in a week
Spotify launched in India in late February and in less than a week has expanded its user base by one million people. We understand why the Indian market is important for this company and what other innovations have appeared on this streaming platform. Photo Wikimedia / CC BY
The streaming market in India is one of the top priorities for the company. About 1.34 billion people live in the country, and a significant part of them are potential users of the service. The population is larger only in China, but there the market is already divided between local players. For example, Tencent Music applications are used by 800 million local residents. In India, only 150 million people listen to music through streaming services .
Spotify has been preparing for launch in India since the beginning of 2018, when the company opened an office in Mumbai. Initially, the launch date was set for January 31, 2019, but was later shifted to February 26, 2019 due to disagreements with Warner - they continuestill hinder the expansion of the library for local listeners. But these difficulties did not prevent the company from attracting a million new listeners in just a week. However, further audience growth is not expected to be as active. We explain further what could be the reason.
The first difference between India and Western countries, which can affect Spotify’s success and income in the country, is that people pay less and less for music. According to Deloitte estimates , only 15% of local users of streaming services buy a subscription - most of them pay for it as part of "complex" offers. For example, the cost of a subscription may be included in the monthly fee for the services of a mobile operator. To the low number of potential subscribers is added the fact that many of them cannot pay for the service as much as Western users. Therefore, platforms lower prices: a month of using the local version of Apple Music costs $ 1.69 (or 120 rupees), and an American - $ 9.99.
Spotify also had to reduce the cost of the subscription: a month of the premium version of the platform in India will cost $ 1.67 or 119 rupees (in the US - $ 9.99, like Apple Music). The company also introduced a new subscription model with daily pay - a day without ads cost $ 0.18.
This feature will affect the choice of content and business development strategies in the country. If the service manages to attract local artists, it can get a significant advantage over competitors. Perhaps a new direct deal model bypassing labels, which the company introduced in the summer of 2018, will affect the improvement of relations with local musicians .
Experts and analysts of the music market have different opinions about whether the new player will be able to conquer the streaming market in India. The success of the company is believed by David Bianchi, co-founder of Various Artists music label, who also works with local songwriters. According to him, the share of the middle class is growing in India , which is willing to pay for a subscription to music services.
Moreover, it is expected that in the coming years the number of mobile Internet users will increase sharply in the country: according to Cisco estimates, from 2017 to 2022 they will become twice as many . This fact will expand the base of potential users of the service.
Experts warn of serious obstacles that Spotify will face. One of them is piracy. The president of the Sony Music division for India and the Middle East emphasized that the losses incurred by the local music industry from illegal music downloads in 2017 were twice its total revenue.
Also among the potential difficulties for the streaming giant is called high competition in the market. Founder of the Indian social platform for musicians Yash Bagal notesthat other players in the market of streaming platforms offer additional services as part of a subscription. For example, the local music service Gaana also provides access to the SONYLiv online television platform - with an annual subscription costing only $ 7.01. According to Bagal, the streaming platform will be difficult to keep up with competitors and attract Indian users who are accustomed to "get more for less."
Photo Wikimedia / PD
India is likely to be not the only new market for Spotify. The service can also be launched in Russia - recently, users of the Spotify Android application noticed an appearance in Russian-language localization. The company already tried to enter the Russian market in 2015, but changed its mind due to the economic crisis, and since 2016 has been developing a new launch strategy.
Another recent piece of news is that the company acquired startups Gimlet Media and Anchor, which are associated with the production of podcasts. As we wrote earlier , conversation shows are part of Spotify’s renewed development strategy: podcasts attract a platform of low-cost production and popularity among advertisers.
The streaming giant is also planning to increase revenues shortly by fighting ad blocking services. Since March 1, the service began to block the accounts of people who get rid of advertising banners and ads in the service - it is estimated that about 2% of such users.
Further reading - the posts of the "World of Hi-Fi» and our Telegram-channel: Harder to sleep and work better - how music helps combat noise publish and listen to podcast What is it: the Russian market of services strimingovyh first profit Western streaming services: why this is not so good news
How was the launch
The streaming market in India is one of the top priorities for the company. About 1.34 billion people live in the country, and a significant part of them are potential users of the service. The population is larger only in China, but there the market is already divided between local players. For example, Tencent Music applications are used by 800 million local residents. In India, only 150 million people listen to music through streaming services .
Spotify has been preparing for launch in India since the beginning of 2018, when the company opened an office in Mumbai. Initially, the launch date was set for January 31, 2019, but was later shifted to February 26, 2019 due to disagreements with Warner - they continuestill hinder the expansion of the library for local listeners. But these difficulties did not prevent the company from attracting a million new listeners in just a week. However, further audience growth is not expected to be as active. We explain further what could be the reason.
Features of the Indian market
The first difference between India and Western countries, which can affect Spotify’s success and income in the country, is that people pay less and less for music. According to Deloitte estimates , only 15% of local users of streaming services buy a subscription - most of them pay for it as part of "complex" offers. For example, the cost of a subscription may be included in the monthly fee for the services of a mobile operator. To the low number of potential subscribers is added the fact that many of them cannot pay for the service as much as Western users. Therefore, platforms lower prices: a month of using the local version of Apple Music costs $ 1.69 (or 120 rupees), and an American - $ 9.99.
Spotify also had to reduce the cost of the subscription: a month of the premium version of the platform in India will cost $ 1.67 or 119 rupees (in the US - $ 9.99, like Apple Music). The company also introduced a new subscription model with daily pay - a day without ads cost $ 0.18.
The second important difference - the people of India prefer local music to western. According to a 2018 Nielsen study , top 4 genres in the country include music by local artists. Western music is only in fifth place.
This feature will affect the choice of content and business development strategies in the country. If the service manages to attract local artists, it can get a significant advantage over competitors. Perhaps a new direct deal model bypassing labels, which the company introduced in the summer of 2018, will affect the improvement of relations with local musicians .
Platform Perspectives in India
Experts and analysts of the music market have different opinions about whether the new player will be able to conquer the streaming market in India. The success of the company is believed by David Bianchi, co-founder of Various Artists music label, who also works with local songwriters. According to him, the share of the middle class is growing in India , which is willing to pay for a subscription to music services.
Moreover, it is expected that in the coming years the number of mobile Internet users will increase sharply in the country: according to Cisco estimates, from 2017 to 2022 they will become twice as many . This fact will expand the base of potential users of the service.
Experts warn of serious obstacles that Spotify will face. One of them is piracy. The president of the Sony Music division for India and the Middle East emphasized that the losses incurred by the local music industry from illegal music downloads in 2017 were twice its total revenue.
Also among the potential difficulties for the streaming giant is called high competition in the market. Founder of the Indian social platform for musicians Yash Bagal notesthat other players in the market of streaming platforms offer additional services as part of a subscription. For example, the local music service Gaana also provides access to the SONYLiv online television platform - with an annual subscription costing only $ 7.01. According to Bagal, the streaming platform will be difficult to keep up with competitors and attract Indian users who are accustomed to "get more for less."
Photo Wikimedia / PD
.jpg){kind=link}
What else is there on the topic
India is likely to be not the only new market for Spotify. The service can also be launched in Russia - recently, users of the Spotify Android application noticed an appearance in Russian-language localization. The company already tried to enter the Russian market in 2015, but changed its mind due to the economic crisis, and since 2016 has been developing a new launch strategy.
Another recent piece of news is that the company acquired startups Gimlet Media and Anchor, which are associated with the production of podcasts. As we wrote earlier , conversation shows are part of Spotify’s renewed development strategy: podcasts attract a platform of low-cost production and popularity among advertisers.
The streaming giant is also planning to increase revenues shortly by fighting ad blocking services. Since March 1, the service began to block the accounts of people who get rid of advertising banners and ads in the service - it is estimated that about 2% of such users.
Further reading - the posts of the "World of Hi-Fi» and our Telegram-channel: Harder to sleep and work better - how music helps combat noise publish and listen to podcast What is it: the Russian market of services strimingovyh first profit Western streaming services: why this is not so good news