Analysing Spotify’s India Launch

6 min readFeb 27, 2019

Spotify has finally launched in India, amid a dramatic licensing tiff with publisher Warner/Chappell. The 1 percent are excited, but for a service to really succeed in a market known for its unique consumer psychology, there are many hurdles that need to be overcome by the Swedish giant. Lets get straight to it:

Here’s what Amarjit Singh Batra, Managing Director, Spotify India had to say:

“Spotify pioneered music streaming a decade ago, and has constantly reinvented itself to bring the best music experience to the world, and now to India. Through our unmatched personalized experience, we want users to find the best music from India and the world, and empower Indian artists to find new audiences in India and worldwide.”

As a keen observer of the Music Business, I have deconstructed central themes that one needs to keep in mind while analyzing Spotify’s market entry:

The Warner/Chappell Issue:

In order to successfully launch in India, Spotify had to acquire a publishing license from Warner/Chappell, the third largest music publisher in the world.

Warner/Chappell was not satisfied with the publishing royalties payable by digital services and saw this as a great opportunity to negotiate a better deal with the world’s foremost streaming service.

There were several disagreements and the situation spiraled out of hand, with both sides issuing accusatory public statements.

All of this compelled Spotify to apply for a statutory license by utilizing a loophole in Indian Copyright Law under Section 31D, inserted by the 2012 amendment of the Copyright Act of 1957. It provides for a compulsory statutory license for “broadcasters”.

However, the statutory license under Section 31D covers only public performance and not a mechanical license.

Warner has filed for an injunction before the Bombay High Court but will be very wary of pursuing litigation against a service that was a major contributor to its revenue of 4 billion dollars last year. Will be intriguing to see this matter unfold in the coming weeks.

(This issue has been brilliantly covered by Tim Ingham for Music Business Worldwide)

Pricing Schemes:

One factor that you will immediately notice is the flexible pricing scheme that Spotify has adopted in India. Users get to choose from a variety of payment plans, including daily top ups and yearly subscriptions.

Companies have to be flexible with their pricing schemes in a cost sensitive market like India, and Spotify have done their homework.

Some context: A monthly premium subscription for Spotify in the United States costs 9.99 USD. A yearly premium subscription in India costs 16.86 USD.

Spotify is a publicly traded company, and shareholders have been concerned about the declining ARPU (Average Revenue per User). The pricing strategy is a clear attempt to remedy the situation by aiming for rapid adoption, but given how other domestic platforms offer bundled services for cheaper prices, I have my doubts about the efficacy of this strategy.

Bundled Value Propositions:

Indian consumers love paying less for more. The quantity over quality mindset has always prevailed. Given such a paradigm, the adoption of a standalone service is unlikely.

With deep pocketed tech giants such as Amazon offering bundled services to consumers at the same price, it’s hard to fathom the adoption of Spotify beyond the upper societal strata.

The aforementioned point is further underscored by conducting a basic comparison of major streaming services and the bundles they offer:

Apple Music: Apple Music has the advantage of being a native application, due to which its UI is way smoother than the Spotify Application on an Apple device. More importantly however, is that every Apple user is mandated to submit credit card details while making an Apple ID. Apple offers a 3 month period during which you can use Apple Music for free (With auto renewal, of course), and before they know it, users are sucked into the Apple ecosystem.
Amazon Prime: Arguably the most enticing bundle, Amazon offers a variety of value propositions such as Prime Shipping, Video, Music, Reading and much more), for 1548 INR (21.76 USD) a year. (Their collaboration with service provider Airtel provides users with a free one year Prime membership)
Gaana+: At 499 INR (7.01 USD), you can get a yearly subscription of Gaana along with SONY Liv, an on demand video streaming service offering popular regional television shows for free. Gaana’s user engagement metrics are staggering due to its brilliantly executed hyper local marketing strategy and regional music curation .
JioSaavn Pro: At 1188 INR (16.67 USD), you can get a yearly JioSaavn Pro subscription. A standalone service per se, It’s adoption by Indian consumers serves as a great case study of what is called the “Telco x Digital Service x FinTech Complex”. The holy trifecta for adoption en masse in India. I address this factor under the next heading.

The Telco x Digital Service x FinTech Complex:

This is best illustrated by using the streaming service JioSaavn as a case study:

The telecommunications giant Reliance Jio merged with popular streaming service Saavn in 2018. They launched the service JioSaavn subsequently.

Every user with Jio as their telco service provider got a premium JioSaavn membership for 3 months.
A collaboration with PayTM, a widely used mobile wallet allowed every new JioSaavn subscriber to avail a free premium subscription for a year by paying 1 INR through their Paytm wallet.

This interplay between the telecom industry, digital entertainment services and financial technology services in emerging markets such as India and China has always intrigued me.

(Since the issue is too broad to address here, more on this in a subsequent post.)

Late Entry:

This one is pretty obvious: Spotify’s late entry into the Indian Market means they have several regional heavyweights to take on. Many listeners (including me) face the prospect of migrating their entire libraries to another platform, something I’m reconsidering because I’m more than pleased with Apple Music and don’t fancy a long arduous library migration process for a “slightly better” service.

Having said that, I will subscribe to Spotify because I obsess over the music business, and I’m interested to see how they adapt to the dynamic Indian market. But most people don’t really care. They are out there for the most convenient and financially attractive proposition. I find it hard to accept that the masses will pay a “premium” price for a standalone service.

Watching Spotify enter the Indian market is going to be fascinating because on the one hand, we have users who have been waiting impatiently for Spotify to arrive and on the other disproportionate end, there are people who have never even heard of the service.

(As always, these are all personal views and you are all free to disagree. Leave a comment with your inputs!)

PS: In my mind, a service has “made it” in India when night-watchmen use it to keep themselves entertained on a warm summer night :)