Ahead of its IPO on April 3, the company outlined its upcoming plans in an investor presentation.
Global music-streaming giant Spotify has for the first time confirmed its impending India launch. During its ‘Investor Day’ presentation on Thursday, Spotify Co-founder and CEO Daniel Ek revealed that it was “working on launching in some of the biggest markets in the world.” These include India, Russia, countries in Africa, and others.
Spotify’s recent IPO filing had revealed that it has already leased office space in Mumbai. There are no indications though on when operations begin, but reports suggest that the music-streaming giant might have already hired someone to lead its India business. The IPO, meanwhile, is scheduled for April 3, Spotify said in the investor presentation.
Even though the service is yet to be available in India, Spotify revealed that its brand recognition is as good as 36 percent in the country. It is banking on the growth of “payment-enabled smartphones” in India and newer markets that will potentially add 1.3 billion users to the mobile ecosystem. Even if a portion of it is converted to paying music subscribers, Spotify has a great market in hand.
Presently, Spotify has 71 million paid subscribers. Apple Music, its key rival in the West, crossed 36 million subscribers in February. Amazon Music was estimated to have 16 million paying subscribers last October. Tencent Music, which is restricted to only China, has over 120 million paying music-streamers.
Spotify observed in its investor presentation that young consumers were driving its growth. 72 percent of its users are under the age of 34, and nearly half of them believed that Spotify is the only music service they need. But the real deal is in user engagement, and Spotify seems to be doing handsomely on that front.
About 44 percent of Spotify’s 159 million monthly active users (both paid and unpaid) log into the service daily and spend 49 minutes on it. This is on par with the daily user engagement of popular social networking apps like Facebook and Instagram. For paid subscribers, the daily usage is even higher.
Spotify’s attention towards India comes at a time when Amazon Music has just launched, and Tencent Music has invested in local music-streaming service, Gaana. While both Apple Music and Google Play Music are also available in India, the battle for music-streaming supremacy in the world’s fastest-growing mobile market might have begun with Amazon’s entry and will only intensify once Spotify launches.
Interestingly, Spotify and Tencent Music also entered an equity partnership last December. Both services now own minority stakes in each other. While Tencent Music has a massive customer base, Spotify’s strong artiste network is second to none. It is also rumoured that Google-owned YouTube is working on a dedicated music-streaming service.
Besides the global players, Spotify will also have to contend with homegrown Indian music services including Gaana, Saavn, Wynk, Jio Music, and others, which have notched up a fair amount of popularity over time. While the market is cluttered, music-streaming revenues from India are projected to cross Rs 3,100 crore by 2020, according to Deloitte. There are now more legitimate listeners of digital music than ever before.