5 Key Challenges for Spotify in India

by: - Last updated on: March 20th, 2018

It has been a busy year for India’s music as well as video streaming (OTT) industry. The 4G boom of 2016 has peddled the country into becoming a hotbed for content platforms. In addition to the rise of a slew of homegrown services, we have witnessed a bunch of overseas players enter the market in the last year including Apple Music, Amazon Prime Music, and more. One company, in spite of exercising dominance in various markets, however, has oddly remained absent from this shift. We are, of course, talking about Spotify.

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But that’s about to change as Spotify gears up to extend its services to India. Daniel Ek, CEO, recently, during the company’s investor day presentation, revealed that they are planning to bring Spotify into some of the biggest countries including India.

Spotify’s first step into the teeming OTT battleground of India won’t be as straightforward as others, however. Being an independent upstart who is focused solely on music streaming, Spotify lacks a range of perks its fellow competitors benefit from. Here’s why.

1. Local Content

By far, Spotify’s most critical shortcoming is the dearth of local content. And I am not talking about just about Hindi. Indians tend to stream songs in a multitude of regional languages such as Tamil, Telugu, and Kannada. Unlike Apple Music or Google Play Music who are branches of a global digital store, Spotify has nothing to lean onto. Not yet, at least. It will have to build a library for the Indian market from scratch.

Although it’s possible, Spotify won’t probably be interested in those customers at all. Except for Hindi, there’s a good chance the company will be funneling its resources in bringing a niche set of listeners on board who are only interested in the western content. That’s primarily because competing against existing players in that sector would be a herculean task and can mar their core experience. More on that later.

2. The Price

The most significant factor which is known to break or make a new player’s position in the Indian market is undoubtedly the price. Spotify, though, has one key advantage here — it offers a free subscription which lets you access the majority of content with in-app advertisements. That’s fine, but the bigger problem lies in the premium subscription. Unlike Apple Music or Google Play Music which have managed to bring down their prices specifically for markets like India dramatically, Spotify probably won’t have the luxury to undercut them.

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Therefore, they will need to provide enough reasons for customers who decide to upgrade to the premium plan. And most of them will primarily because of the feature restrictions in the free version like you can only skip a few tracks every day, you can not play individual tracks on the mobile app, and more. Services like Google Play Music are available for as low as Rs 89 ($1.3) which is miles less than its $10 US pricing. The lowest Spotify has ever priced its Premium subscription is $3 in the Philippines.

3. Playlists for Indian Languages

The biggest hurdle, I feel, Spotify will have is to fine tune its piece de resistance, i.e., human-curated playlists for Indian languages. Instead of automated algorithms, these playlists are managed by real artists and professionals from Spotify’s headquarters. The company will, of course, have to hire staff for making this possible for at least popular languages like Hindi. It’s obvious Spotify won’t be able to do this for all of its gazillion categories. Hence my guess they will be introducing new ones as Google did.

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Then again, it’s unclear how Spotify will be approaching the Indian market. If they’re merely making their existing services available here, then these concerns won’t be impeding this expansion at all.

4. Ensuring Local Content Doesn’t Disappoint Existing Loyal Customers

In spite of not being officially available here, Spotify still has a tiny percentage of users in India thanks to VPN. And if history is any indication, adding regional content is bound to disappoint those existing customers. Take, Google Play Music, for instance. The app keeps suggesting Indian content even if you have configured only English in the preferences. This can be partially termed as a bug but the thing is India has way too many languages and dealing all of them on a single platform can be an engineering nightmare.

This probably won’t be an issue in the custom playlists but features like radio, it certainly will. The easiest solution out of this is just to segregate all the content into their own separate sections. But that isn’t feasible either mostly because there will be people who would want to listen to tracks in multiple languages and having to manage different libraries for all of them can lead to a chaotic experience.

5. Operator Partnerships

airtel apps wynk

India’s pivot to OTT content has lead to a bunch of network operators build their own streaming platforms and offer them free of charge as value-added services. And for the most part, that seems to be working as long as the market shares are concerned. Airtel’s Wynk and Reliance Jio’s JioMusic both are currently the top two music streaming services with 21 Million and 19 Million users respectively (data source). Against these which don’t cost a dime and have an endless stream of local content, it’s clear Spotify won’t be able to aim for the masses either.

So Where Does that Leave Spotify?

Spotify’s headlining feature is its impeccable ability to bring you the best out of the hundreds of thousands of western tracks. And I feel that’s what it will be focusing on here as well, with probably a couple of local languages. In a way, Spotify can be compared with how Netflix functions in India. It doesn’t go for the masses or tries to have the highest amount of regional content. Its sole objective is to entertain the premium crowd who is primarily interested in its western offerings and originals.

Spotify, on the contrary, might begin sponsoring large-scale events and rope in new, rising local artists for exclusives. Their apps have a concert feature which lets you listen to concert recordings and podcasts. So that’s one possibility. On the other hand, there’s an equal chance of them merely extending their existing services here and make it easier for Indian customers who were already using Spotify through VPN.

However, all things considered, Spotify might be a little too late. It’s arriving at a time when both Google Play Music and Apple Music have already established a strong foothold with a diverse library and a loyal user base. As I said, though, it remains to be seen how Spotify will be approaching the market and whether it’s considering India as merely an extension or as its next big source of users.

We still don’t when exactly it will be available, though. It could be months or if believe a few rumors, the first week of April itself.

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