One of the streaming giants launched in India and attracted a million users in a week.
Spotify was launched in India in late February and in less than a week it increased its user base by one million people. We understand why the Indian market is important for this company and what other innovations have appeared in this streaming platform.
Photo Wikimedia / CC BY
India's streaming market is one of the highest priority for the company. Approximately 1.34 billion people live in the country and a substantial part of them are potential users of the service. The population is bigger only in China, but there the market is already divided between local players. For example, Tencent Music applications are used by 800 million locals. In India, only 150 million people listen to music through streaming services.
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Spotify was preparing to 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 continue to this day and prevent the library from expanding for local listeners. But these difficulties did not prevent the company from attracting a million new listeners in just a week. However, it is expected that further audience growth will not be as active. We explain further what could be the reason.
India’s first difference from 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 - and most of them pay for it as part of “complex” offers. For example, the cost of a subscription may be included in the subscription fee for the services of a mobile operator. The low number of potential subscribers adds the fact that many of them cannot pay for the service as much as Western users. Therefore, the platforms reduce prices: a month of use of the local version of Apple Music costs $ 1.69 (or 120 rupees), and the US one costs $ 9.99.
Spotify 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 has also introduced a new subscription model with payment by day - a day without advertising cost $ 0.18.
This feature will affect the choice of content and business development strategy in the country. If the service manages to attract local performers, it can get a significant advantage over its competitors. Perhaps the improvement of relations with local musicians will be affected by a new model of direct deals around the labels, which the company introduced in the summer of 2018.
Experts and analysts of the music market express different opinions on whether the new player will succeed in conquering the streaming market in India. The success of the company is believed by David Bianchi, co-founder of music label Various Artists, who also works with local songwriters. According to him, in India, the proportion of the middle class, which is willing to pay for subscription to music services, is growing .
Moreover, it is expected that in the coming years the number of mobile Internet users will sharply increase in the country: according to Cisco, from 2017 to 2022 there will be twice as many of them . This fact will expand the base of potential users of the service.
Experts warn about the serious obstacles Spotify will face. One of them is piracy. The President of Sony Music in India and the Middle East stressed that the losses of the local music industry from the illegal downloading of music in 2017 were twice as high as its total revenue.
Also among the potential difficulties for the streaming giant are called high competition in the market. The founder of the Indian social platform for musicians Yash Bagal (Yash Bagal) notes that other players in the market of streaming platforms offer additional services as part of the subscription. For example, the local music service Gaana also provides access to the SONYLiv online TV platform - and the annual subscription costs only $ 7.01. According to Bagal, the streaming platform will be difficult to keep up with competitors and attract Indian users who are used to "get more for less money."
Photo Wikimedia / PD
Probably, India will not be the only new market for Spotify. The service can also be launched in Russia - recently, users of the Spotify Android application have noticed an appearance in Russian-language localization. The company has 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 news is that the company acquired startups Gimlet Media and Anchor, which are related to the production of podcasts. As we wrote earlier , talk shows are part of Spotify's updated development strategy: podcasts attract a low-cost production platform and are popular with advertisers.
Streaming giant also plans to increase revenues soon by combating advertising blocking services. From March 1, the service began to block accounts of people who get rid of advertising banners and ads in the service - it is estimated that these users are about 2%.
Additional reading - posts from the "Hi-Fi World" and our Telegram-channel:
Go
Stronger to sleep and work better - how music helps fight noise
Go Publish and listen to the podcast
What is it: the Russian market of streaming services
The first profit of Western streaming services: why it is not so good news
Photo Wikimedia / CC BY
How was the launch
India's streaming market is one of the highest priority for the company. Approximately 1.34 billion people live in the country and a substantial part of them are potential users of the service. The population is bigger only in China, but there the market is already divided between local players. For example, Tencent Music applications are used by 800 million locals. In India, only 150 million people listen to music through streaming services.
')
Spotify was preparing to 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 continue to this day and prevent the library from expanding for local listeners. But these difficulties did not prevent the company from attracting a million new listeners in just a week. However, it is expected that further audience growth will not be as active. We explain further what could be the reason.
Features of the Indian market
India’s first difference from 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 - and most of them pay for it as part of “complex” offers. For example, the cost of a subscription may be included in the subscription fee for the services of a mobile operator. The low number of potential subscribers adds the fact that many of them cannot pay for the service as much as Western users. Therefore, the platforms reduce prices: a month of use of the local version of Apple Music costs $ 1.69 (or 120 rupees), and the US one costs $ 9.99.
Spotify 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 has also introduced a new subscription model with payment by day - a day without advertising cost $ 0.18.
The second important difference is that the people of India prefer local Western music. According to a 2018 Nielsen study , the country's top 4 genres include music from local artists. Western music is only in fifth place.
This feature will affect the choice of content and business development strategy in the country. If the service manages to attract local performers, it can get a significant advantage over its competitors. Perhaps the improvement of relations with local musicians will be affected by a new model of direct deals around the labels, which the company introduced in the summer of 2018.
Perspectives of the platform in India
Experts and analysts of the music market express different opinions on whether the new player will succeed in conquering the streaming market in India. The success of the company is believed by David Bianchi, co-founder of music label Various Artists, who also works with local songwriters. According to him, in India, the proportion of the middle class, which is willing to pay for subscription to music services, is growing .
Moreover, it is expected that in the coming years the number of mobile Internet users will sharply increase in the country: according to Cisco, from 2017 to 2022 there will be twice as many of them . This fact will expand the base of potential users of the service.
Experts warn about the serious obstacles Spotify will face. One of them is piracy. The President of Sony Music in India and the Middle East stressed that the losses of the local music industry from the illegal downloading of music in 2017 were twice as high as its total revenue.
Also among the potential difficulties for the streaming giant are called high competition in the market. The founder of the Indian social platform for musicians Yash Bagal (Yash Bagal) notes that other players in the market of streaming platforms offer additional services as part of the subscription. For example, the local music service Gaana also provides access to the SONYLiv online TV platform - and the annual subscription costs only $ 7.01. According to Bagal, the streaming platform will be difficult to keep up with competitors and attract Indian users who are used to "get more for less money."
Photo Wikimedia / PD
What else is on the topic
Probably, India will not be the only new market for Spotify. The service can also be launched in Russia - recently, users of the Spotify Android application have noticed an appearance in Russian-language localization. The company has 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 news is that the company acquired startups Gimlet Media and Anchor, which are related to the production of podcasts. As we wrote earlier , talk shows are part of Spotify's updated development strategy: podcasts attract a low-cost production platform and are popular with advertisers.
Streaming giant also plans to increase revenues soon by combating advertising blocking services. From March 1, the service began to block accounts of people who get rid of advertising banners and ads in the service - it is estimated that these users are about 2%.
Additional reading - posts from the "Hi-Fi World" and our Telegram-channel:
Go
Stronger to sleep and work better - how music helps fight noise Go
Publish and listen to the podcast What is it: the Russian market of streaming services The first profit of Western streaming services: why it is not so good news Source: https://habr.com/ru/post/442694/
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