Has Spotify scored India!? If so, the payoff could be significant
Spotify, the global market leader when it comes to paid streaming music subscriptions, may have pulled off an astounding win. Anonymous sources that claim to have knowledge of the deal say that the company has secured deals with “many of the major rights holders” to music in India. That’s big. If true, it means that one of the final – and probably the biggest overall – hurdles to Spotify entering India is cleared. And India could be the jewel in Spotify’s crown: its population is 1.3 billion-people strong, and the country is in the midst of a global growth story reminiscent of China.
Spotify’s share price has appreciated by 14% in the last five days!
Source: Yahoo Finance
The people responsible for sharing this information asked not to be named as the matter was not yet public. They suggested that Spotify could launch in India during the first quarter of 2019. A number of credible publications, like Bloomberg and Variety, are taking them seriously, and have reported the news.
If Spotify does launch in India next year, it will be a crucial opportunity as well as a test. The company’s subscription revenue overwhelmingly comes from three regions: North America, Latin America, and Europe. Between them, these three areas account for less than a third of the global population – yet, they account for over 90% of Spotify’s paying customers. India would be an opportunity for the company to showcase its ability to grow its ‘rest of the world’ segment – and reap the rewards of an expanding presence in one of the world’s fastest-growing music markets.
Timelines aside, there is little doubt that Spotify has had its eye on India for some time. The company has previously hired a head of communications in the country, and headhunted an executive from a competitor there earlier this year. This preparation is important: India comes with its own unique set of challenges, and streaming rights are just one of them. The country’s musical taste is as varied as its linguistic preferences, with Bollywood musicals, devotional music, and genres like rock, pop, and folk, available in 12 different dialects.
Spotify CEO Daniel Ek is more than aware of the difficulties present in the country, telling analysts this month that “India specifically is a very fragmented marketplace with lots of different local labels, lots of different local publishers.” If Spotify is ready to move, that at least implies that the company thinks it’s got some of those challenges figured out.
Dominion holds Spotify in its Global Trends Luxury Fund.
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