THE SOUND OF STREAMING
Fortune India|May 2021
Two years after its entry into the Indian market, streaming giant Spotify is already among the top three players in the growing audio OTT industry. Key to its success has been its localisation and diversified offer strategy.
Prerna Lidhoo

A ROUND BLACK THIN disc with circular grooves was avant-garde in the 1940s. Placed on a bulky instrument called the phonograph, it would magically play music for a few swaying generations. Vinyl records were trendy then. Today, they’re quaint at best. And archaic, in truth. Over the last few decades, technology has changed all aspects of the music industry, including how people listen to it. You hardly play music anymore, for instance. You stream it. At the forefront of this streaming revolution is a Swedish company you know of as Spotify.

Since it was set up in 2006 by entrepreneurs Daniel Ek and Martin Lorentzon to combat the growing problem of piracy in the music industry, it has grown to become the leading player in the global streaming industry, with 345 million users and 155 million paying subscribers across 178 markets.

In the Indian market, too, which has around 10 players, Spotify has managed to hold the third spot behind Gaana and JioSaavn, according to a Kantar-Vtion study. What is more remarkable is that it has achieved this in just two years. In fact, by the time Spotify entered the country in February 2019, Indians had already warmed up to music streaming services like JioSaavn, Wynk, and Gaana. But the late entry has proved to be “more of a boon”, says Spotify’s India MD Amarjit Singh Batra. “I would call it the late mover advantage because we’ve been able to see what’s working and what’s not,” he points out. “We’ve learnt that what we thought was a mature market... is not yet mature enough. We’re educating people about streaming and that is something nobody invested enough in while the market was expanding.”

The “homework” the company had done before launching in India has paid off. As Gustav Gyllenhammar, vice president, markets and subscriber growth at Spotify Worldwide, puts it: “We knew that we needed to provide something differentiated and really tailored to the market in order to win. There were already a lot of local as well as global players but we needed to provide something that was more global than the local players as well as more local than the global players.”

So as with all the other markets that it operates in—including the 80 new markets it plans to enter this year—Spotify put localisation at the core of its strategy to make headway in a short span of time. Consider that of the 36 new languages that it recently launched in, 12 are Indian. These are Hindi, Gujarati, Bhojpuri, Kannada, Malayalam, Marathi, Odia, Punjabi, Tamil, Telugu, Urdu, and Bengali.

The proof of success is in the numbers. In its latest letter to shareholders, Spotify said, “In Q4, we added 25 million MAUs (monthly active users) and benefited from faster growth in India, the U.S., and Western Europe, with India serving as a notable source of upside vs. our forecast, driven by successful marketing campaigns.”

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