By Elton Gomes
Spotify, the world’s largest music streaming service, has reportedly secured deals with many major rights holders in India over the last few months, and could debut in India within the next six months, people familiar with the developments said.
Spotify Technology SA is preparing to introduce its services as soon as the first quarter of 2019, said a few people on the condition of anonymity, BloombergQuint reported.
Variety reported that a launch in India can be expected within the next six months. Moreover, Spotify could offer an extended free trial period, which will be longer than the 30 days of full-access that Spotify offered in Vietnam and South Africa earlier this year.
According to Sweden’s Di Digital, Spotify’s plans to buy an Indian competitor failed to materialise, and it has since decided to enter the market on its own.
T-Series is close to signing a deal with Spotify, Bhushan Kumar, managing director of T-Series, confirmed to the Economic Times. “We are in the final stages of negotiations for a two-year deal. Our music will be available in the international markets on Spotify in the first quarter and later in India, when they launch here,” Kumar said.
“India is very different … and here you can’t run a music service without T-Series. So far, they have had only small labels, so a launch was difficult,” a senior music industry executive told the Economic Times on condition of anonymity.
Spotify’s entry in India comes after the music streaming app had confirmed that it had leased office space and had hired 308 employees in India. The music streaming app has hired former Olx India CEO Amarjit Singh Batra as the country head. In March, Stockholm-based Spotify’s CEO Daniel Ek had confirmed that the music app was working to launch in India, Russia, and Africa.
Will Spotify need to alter its approach in India?
Though streaming services have about 100 million users in India, only a select number of users pay for the services. Spotify reportedly plans to rely heavily on its free tier to lure new customers and then convert them to paid subscriptions – a strategy that seems to be working in other markets.
Affordable internet costs could help Spotify. Thanks to Reliance Jio, thousands of Indians now have access to high-speed internet on their phones. Cheap internet plans could help Spotify increase its presence in the Indian market.
Spotify has been hugely popular in India. Despite its service not being available in India, there are several thousand users in the country who use the app via VPNs (virtual private networks). Spotify said that the awareness of its brand among users in India is already high, thus indicating that the company seems confident of achieving significant growth in India.
However, Spotify will have tough competition in players like Saavn and Gaana. Even if licensing is secured, Spotify could be looking at potentially slow conversion rate from its free to premium tier.
In India, Spotify will be up against Gaana, Saavn, Hungama, Airtel-owned Wynk, and global services such as Apple Music, Google Play, and Amazon Music. Spotify will undoubtedly face stiff competition when it launches. With over half a dozen established music streaming services, both local and global companies are offering a mix of inexpensive subscription options and ad-supported tiers.
The latest music streaming app introduced in India was Amazon Music. Entering the Indian market towards the end of February, Amazon Music doesn’t come with ads.
Local services like Gaana, Saavn, and Hungama have gained considerable number of users. Telecom operator-backed platforms, such as Jio Music and Wynk Music, will also give tough competition to Spotify.
Spotify can succeed in India if it can introduce the lowest price it has ever charged anywhere in the world. The music streaming service will have to heavily rely on its brand image to get sufficient subscribers in India.
Indian music streaming market
With the rise of affordable internet and availability of quality original music, India has witnessed a steady flow of global investments into its music streaming platforms. An increasing number of people are now consuming music on their mobile phones.
“Music streaming is the future of music consumption globally. In India, we are only 10 per cent of the way towards building a business useful for 500 million Indians,” said Gaana CEO Prashan Agarwal, BusinessLine reported.
“There is a tectonic shift happening in the Indian streaming markets,” said Sahas Malhotra, Director, Amazon Music India. Malhotra added, “Data has become affordable and we expect more consumers to go for it. Music, therefore, is an integral part of our expansion. Also, in India, there is huge library of content, both regional and Bollywood,” as per the BusinessLine report.
Elton Gomes is a staff writer at Qrius
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