Spotify: Has it already hit the right chord in India? A Product Adoption Life Cycle and Case Study
What do we know about Spotify?
Swedish audio streaming platform Spotify that launched in India in February 2019 is fast making its presence felt among the youth that is tuning in to artistes from across the globe.
“Since February 2019, we now power an average of 11 billion artiste discoveries per month (globally) on the platform which quite simply means that listeners are beyond curious and vastly open to expanding their taste in music. In fact, 18 to 24 year old listeners are particularly limitless when it comes to the genre of the artists they decide to stream for the first time,” a statement from the company said adding that music is making the world shrink with Indian Gen Z (born between the mid-1990s to the mid-2000s) discovering artistes from the West as well as south Korea.
Growth of Spotify in India
Currently, Bekhayali from Shahid Kapoor-starrer Kabir Singh composed by Sachet Tandon is the most popular track from India on the platform, with over 7,00,000 streams within a week of its launch. This is followed by Duniya by Punjabi singer Akhil, country rap Old Town Road by Lis Nas X, Billie Eilish’s indie song Bad Guy and Arijit Singh’s Ve Maahi from Akshay Kumar-starrer Kesari.
Top global artistes who are currently trending on playlists in India include Ariana Grande, Khalid, Marshmello, Halsey, Swae Lee, Sam Smith, Calvin Harris, Shawn Mendes, The Chainsmokers and Taylor Swift.
“India has an incredibly rich music culture and to best serve this market, we’re launching a custom-built experience. Not only will Spotify bring Indian artists to the world, we’ll also bring the world’s music to fans across India. Spotify’s music family just got a whole lot bigger,” said Daniel Ek, Spotify founder and CEO.
Spotify is available with both an ad-supported free subscription tier and a premium model in India. In the latter, you can start with a 30-day free trial followed by a payment of ₹119 a month for access to all the music and premium features on the app. There is also the option of a prepaid sign-up to premium features for specific durations. Access to Spotify Premium for a day costs just ₹13. A week-long premium subscription comes for ₹39, while a monthly subscription costs ₹129.
Spotify’s competition in India includes entrenched streaming apps such as Gaana owned by Times Internet, which claims 100 million users a month, and JioSaavn that calls itself South Asia’s biggest streaming destination.
Where does Spotify lie on the Product curve?
Innovators: The Innovators are the first group of people to invest in your product. The innovators include journalists and tech reviewers who keep a watch on the market and are the first ones to test the product.
Early Adopters: Like innovators, Early Adopters tend to be ahead of everyone else, willing to test the waters. These are evangelists who are passionate about Music Streaming services in general and wish to get their hands on any new product that launches in the industry.
Early Majority: The people in the Early Majority are usually pragmatic and will only buy something once it’s been road-tested (at least a little bit) and has proven its value. They read blogs & watch reviews by the Innovators & Early Adopters to convince themselves. These are mostly millennials who have a fresh POV towards a booming industry.
Late Majority: The Late Majority are skeptics who need a little bit more than just reviews about a new product. These are people between the ages 35–55 who aren’t exposed to new technological developments and are mostly comfortable with using their current product. They will only switch if they are absolutely unsatisfied with the current product they’re using.
Laggards: These are the people who buy the product after all the hype has died down. Sometimes, laggards purchase a product years after it’s been released. They are extreme skeptics, who also coincidentally fall within the 35–55 age range, and don’t buy the product until much later in the product lifecycle.
As of July 2019, Spotify India falls in the Early Majority bracket of the Product Adoption Curve. It has surpassed its Innovators and Early Adopters curve since its launch and has had a rapid growth in the last 5 months
Spotify and its Competitors in India
Globally, Spotify has 207 million active users and 96 million paid subscribers. In India, the company will be in contention against services like Gaana, JioSaavn, Airtel’s Wynk music and Apple Music. At the prices Spotify is asking, the service comes in as one of the more premium music streaming apps in the country, taking on Apple Music.
Both Gaana and JioSaavn offer subscriptions starting at ₹99 per month, and have free ad-supported services as well. The services have also spent years developing their music catalogues here, which Spotify will have to contend against.
The Swedish company had earlier announced a deal with T-Series, giving them rights to regional and Bollywood music for India. However, whether that makes Spotify comparable to its competition remains to be seen. Additionally, the company recently faced an issue with Warner Music, which disallows the company from bringing music by artists like Katy Perry, Led Zepelling etc. to the country.
That said, many users seem to appreciate the fact that the company is finally providing services in India, through Twitter and other social media.
Preparations For The Battle: Is Spotify Ready?
Spotify’s entry while delayed does not lack in preparation. With the sheer size of India’s OTT Market, the company has made it clear that the ountry is key to its international expansion plans.
The company has opened an office in Mumbai, hiring 300 people, getting OLX India’s former CEO Amarjit Singh Batra as it’s country head and former Saavn executive Gaurav Malik on board as well as signing a content partnership with Indian film and music company T-Series getting access to a catalogue of 160K songs.
Considering the price-sensitive Indian audience, Spotify has launched with a freemium model similar to its local arch-rivals offering ad-free subscription service and ad-supporting free service. Not only this, instead of depending only on partnerships with music labels, Spotify has launched an Indian music hub on its service called Desi, which counts more than 930K followers and includes its own playlist, Desi Hits (77 songs), as of January 2019.
According to data available, of the 1.3 Bn population, only 330 Mn Indians (approximately) currently have smartphones which is the most-used way to listen to music on-the-go. Of the total smartphone users, less than half (150 Mn) have used music apps (as of December 2018).
Now if Gaana already has 80 Mn monthly users, then it already has a 50% market share with it. The growth strategies for Hungama, Apple Music, Amazon, Google Play and others are already in place and are expected to take a significant share of the remaining 50% market.
However, Agarwal is of the view that “There is huge room for growth as the market penetration moves towards 35–40% of the population.” According to Gaana’s estimate, the market will grow to 400 Mn users in the next two to three years. “We would continue to lead the market,” he added.
He also believes that while any new entrant like Spotify would require time to research and develop an understanding of Indian music tastes, Gaana has a database of users spanning the last seven years and specialist teams dedicated to understanding the musical inclinations of the Indian population. Similar thoughts were shared in a February 2019 Fast Company report by JioSaavn CEO Rishi Malhotra who believes that “to achieve scale in India, you need the local advantage.”
Also, players like Hungama are even catapulting their user base by strengthening their tech partnerships with companies like Xiaomi — to offer its services on Mi phones. Hungama also offers access to Amazon Echo as well as the Amazon Fire TV Stick.
But Spotify certainly has one advantage here — the anticipation of Indian users!
Spotify’s Growth Hacks
Local flavours, continue to dominate the Swedish music app. As per latest data shared by the company, ‘Top Hits Hindi’ is the most popular category on the service followed by ‘Punjabi 101’, ‘Bollywood Butter,’ ‘Top Hits Punjabi’ and ‘New Music Hindi.’
Spotify had earlier announced that it is focusing on Hindi and English music in India, as well as Punjabi, Tamil and Telugu. The Swedish firm has a deal with Bhushan Kumar’s music label, T-Series, that gives it access to the latter’s enormous Bollywood and regional music catalogue, as well as its pool of independent music.
While Spotify can be used for streaming music for free, the company is offering a premium (ad-free) subscription for ₹119 per month in the country. The app will be available on mobile, desktop and tablets, alongside support for smart speakers and home devices. Users can pay via credit and debit cards, along with PayTM. Interestingly, paying through PayTM and UPI platforms increases the subscription prices to Rs. 129 per month.
According to a TechCrunch report, even before its official launch in India, more than 4 Mn users are regularly listening to Indian music on the service. “There also are an estimated 30 Mn Indians living overseas, including in markets where Spotify operates, like the U.S., Mexico, Brazil, the U.K, and Germany,” Spotify claimed in a media statement.
Spotify has clocked in two million users in India.
Conclusion
Spotify may seem to be well behind in terms of the number of subscribers, and in terms of reach. However gauging from the buzz leading up to its launch and its commitment to producing content tailor-made for Indian listeners, Spotify’s entry will further push innovation in terms of recommendation engines, content and business models in the online music streaming industry.
