Spotify's Long, Winding Road To India

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Do. Are made medicine. Good zoo. Bob love and a beautiful so beautiful. This is the lovely voice of Indian singer RG sing. And Spotify said he was their most requested artists in the first week that they launched in India last month, this is the indicator from planet money. I'm Stacey Vanik Smith, and I'm Pamela Boyko this expansion into India. It's key for Spotify. Right. It's this alluring big market one point three billion people, and they're spending more and more time on their smartphones. So many tech companies Stacey they wanna get in there. Well, yeah. Because the Swedish company Spotify, it's become the world's most popular music streaming service. I mean, I have it. I think you haven't. I haven't wants to keep growing it needs to expand to new places at their first investor day a year ago, the CEO Daniel Eck made this big announcement. We're working launching in some of the biggest markets in the world places like India, Russia and most of Africa the trouble Stacy is that launching an. Ndia? It's not that easy. The market is really complicated to enter from the outside. Spotify had a long hard fight ahead on today's indicator Spotify in India, we take the experience of this one company and use it as a way to figure out why it's so difficult to break into India. This message comes from NPR sponsor gained bridge. Gained bridge offers a new Witty's designed for the digital age simplify products with guaranteed returns that you can buy direct. Learn more at gain bridge dot life slash NPR. Game bridge is not available in all states. Support also comes from Hello Monday. A new podcast from Lincoln's aditorial team about the changing nature of work and how to get the most from Monday and your career find Hello Monday on apple podcasts or wherever you listen to podcasts. Stacey I wanted to learn more about why? Spotify would be so interested in launching in India, and why it was such a struggle. I called up this man nickel power. He's an Indian digital rights activist and the founder of a tech website called media NAMA. He said the amount of data used on India's largest cell phone provider is eight to ten times what it was just a year ago. They does really really cheap in speeds of a bitter and improving. Vittal nicely forty market now. But there has been this problem just like everywhere else. Indians do not wanna pay for online content a bunch of music download sites failed in the past. And there is still just a huge amount of piracy in the last. Couple of years subscription streaming services are starting to grow enough to catch the attention of a big company like Spotify, but not just Spotify. Lots of companies wanna make money off India's growing population of internet users. That's a big challenge. Competition is intense local music streaming apps are leading the market like Ghana GO Saban. And then they're also these familiar international names in their Google play, apple music, and Amazon we counted and before Spotify there were already at least ten music streaming services in India, plus Powell says of to deal with another competitor. When you might not always think of of goes, the largest music service in India is actually you to most people prefer to stream videos and listen to the music. In India because it's completely free. And you know, what it turns out? That's not just India ah music industry. Reporting twenty seventeen estimated one point three billion people around the world are using YouTube to listen to music, but I'm getting off topic here in an interesting way, though. But yes back to India so Spotify entered the market on the later side and in order to try to go up against this pretty heavy competition. They needed to come in prepared Indian customers were expecting this big international famous app with this great reputation to really deliver to the best selections of songs and the best playlists in India. That means both big Bollywood hits and western pop music. The industry is pretty fragmented. I you've got these big international labels like Sony and Warner Music group, then they're all these Indian labels Uduas that specialize in Bollywood and lots of little ones that specialize in a specific region or language. This is a country with twenty two official languages that is a lot of official languages so many. Spotify needed to make new deals with indie. Labels and expand their deals with international wants to include India. That's where the real trouble started, the company spent months and months negotiating with all of these different labels. Meanwhile, the CEO kept getting asked winter you launching an India on his earnings calls and then finally boom big progress. Spotify announces that it has made a deal with this huge local label called t series to stream its music and just to give you an idea of the size of t-series. It's YouTube channel has the most subscribers of any YouTube channel in the world. Now reports start coming out that Spotify in India's gonna launch this teaser is deal on January thirty first, but that day comes and goes and music fans in India, or like what gives turns out Spotify and Warner Music group. Just can't agree on a deal. The two sides end up in this messy court battle that in fact is still going on when Spotify finally launches at the end of February. It does. So without songs from artists that belong to Warner Music publishing division Indian customers on Twitter start complaining their favourite songs by Shirin Cardi B Led Zeppelin. They aren't available. So you can see how difficult it was to launch in this market customers that are hesitant to pay stiff competition and legal problems. Plus Spotify has to adapt its product to suit India. They Beasley have to go local. So Spotify makes a bunch of substantial changes to try to make the Indian market work for them stuff. They aren't doing anywhere else. They changed price payment methods and languages. India is the only place where the free ad-supported version of the smartphone app. Lets you play every song on demand in other countries that something you have to pay for like this country like this country, slightly cheated. Also to get Indian users. Spotify set a price for its premium service that is really cheap under two dollars a month type cheap that is less than it costs in Peru or Vietnam and a lot less than it costs here where it's nine ninety nine month. Still at two dollars a month. Spotify's price is in line with what market rivals are charging in India like Google play an apple music. So Spotify has done a couple of things to accommodate that. I there is the cheaper price and also users do not have to pay for a whole month. They can sign up to prepay for premium just one day at a time. I want that deal here I want that deal here too. And in fact, the prepaid plans don't even require a credit card. You can use India's popular mobile payment system, pay TM, which is like pay pal except in India. And you know, what it's not just money stuff. Spotify makes much of other changes the app ads playlists and recommendations for music Indian languages like Hindi job and Tanel. Maybe not all the official twenty two languages of the country. But it's. Art, along with a lot of ways to listen to Bollywood one thing. Spotify hasn't changed? The language of the app itself is only available in English in India. The interface is not available in the other Indian languages palaces that has got to change if they want to grow their customers long-term in India, most of the people who are coming online and India have they don't doing this. I think it big time before these users get into two services like Spotify. But you can't address that market without being available in their language. Spotify came out of the gate. Well, the company says it's signed up a million users in less than a week. But really that is just the starting line. So what it really comes down to the tough part of a strategy like this with low prices and more emphasis on the free product is it's really relying on volume. Spotify will need a massive number of customers to make their business India success. They'll also need the right mix of Indian music and western music. So remember from the beginning RG sing was the number. One artists downloaded on Spotify. Number two that first week was oriented 'Grande. So India's not that different from other markets. Thank you next. And thanks to Salman warrants at tech Liga's who broke down some of the legal issues in India for me. This week's indicator was produced by consensus Ardo our intern. In fact, checker is editor is paddy Hirsch, and the indicator is a production of NPR. Welcome to the twenty percent of do you see Jesus in the burnt toast do realize that literally there's a bucket of conduct by the exit wise is happening happy. Happy. We cannot just say stop. I want to get off invisible. Season five no, easy answers. Just the right questions.

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