Globally, the music streaming service claims to have 100 million plus paid users all over the world with 217 million monthly active users.
"Overall, the numbers are great; people are listening to both local and international music. The top 5-6 metros drive traffic, but we have started noticing traction in tier II and tier III cities as well." This is how Spotify's, MD, Amarjit Singh Batra, explains the music streaming platform's India voyage so far.
Stockholm, Sweden headquartered music streaming giant Spotify made its India entry earlier this year (February). Unlike other global media organisations that entered India and adopted a local strategy, Spotify did what it is renowned all over the world for. Batra and his team here in India started promoting its playlists from Day 1. Its launch campaign had more than 1000 different hoardings placed at different locations in the top metros of the country. Billboards around railway stations in Mumbai read - "Stay in Bandra but boarded a Virar local, there is a playlist for that." Others read - "Tinder match on the day of your break up, there is a playlist for that." The messaging was westernised and Batra informs that it was done to reach out to the "young international audience".
"People who know about fashion, consume international music, people who are connected, speak or know English was the kind of people we targeted with our launch campaign. There was no TV, mostly outdoors, with a bit of radio," Batra adds. But now, Spotify wants to reach out to a larger audience and to do so it rolled out its first TV campaign.
The lead protagonists in the ads feature actor Anil Kapoor as the father of Ishan Khatter. Kapoor plays a "cool dad" and both father and son use Spotify in various situations. The product is strategically placed to get noticed every now and then. "The brief given to the agency was - how do we take the brand to a larger audience across the board? At the same time, we had to keep in mind that Spotify is a progressive brand, so the ads we display must be progressive, yet reflect the deep-rooted culture of the country," says Batra.
Spotify is often recognised as the platform which introduced the world to the paid music streaming phenomenon at a time when piracy was at its peak. In April 2019, the music streaming platform announced that it crossed 100 million paid users worldwide. The same month, it was reported that Apple Music, Spotify's nearest competitor, had 50 million paid listeners worldwide. Overall, Spotify claimed to have 217 million monthly active users and in its first quarter-2019 (January to March) financial performance report, it stated that 2 million users started using the service in India. Batra did not reveal any information about the monthly active users on the service in the country but said it is very much following the global trend.
"If we look at the time spent per user, per month globally, it is 30 hours on average. When we launched in India, reports suggested it is around an hour per month in the country. What we have noticed so far is the time spent per user, per month on Spotify, is far ahead of that which is a positive sign for us as people are spending more time on the platform."
In India, Spotify takes on Times Internet's Gaana, Reliance's JioSaavn, Google's YouTube Music, and Amazon Prime Music, apart from Apple. Both Saavn and Gaana claim to have more than 100 million monthly active users in India. According to the FICCI-EY report - "A billion screens of opportunity" - the music segment grew by 10 per cent in 2018 (over 2017), on the back of film music and audio streaming, to reach Rs 1400 crore and EY projects it to grow to Rs 1920 crore by 2021. Streaming, on the other hand, grew by 50 per cent in 2018 to reach 150 million listeners (excluding YouTube Music viewers). However, only around 1-1.5 million listeners paid for the services to make the paid audio streaming (net of telco bundling) industry hit Rs 80 crore in 2018.
That's where Batra feels Spotify will have to take a different route compared to what it has been doing in 78 other markets. "Globally, Spotify's revenue mix is 90 per cent subscription and 10 per cent advertising. But, in India, we will have to see how it shapes. I think, since the paid market in India is not that big, it will be more advertising-driven," he says.
Uber, Netflix and Spotify's own premium ads are the only few placements that interrupt a listener today and is certainly not enough to get irritated and subscribe to the ad-free, premium service. However, the number of ads is going to increase, says Batra. He adds that in the initial stages, Spotify wanted to focus more on providing a superior user experience and so it had restricted itself to only a few ads.
While there are plenty of players in the market, Batra feels it is Spotify's dedicated approach that separates the service from the rest. "It's good to have competition. But, we need to remember that Spotify is not doing it only in one country, but in 79 markets. There's a team of 4000-plus people building this business globally and they are passionate about music. I think there are people who make music because music is a good addition to their business; they could be fairly successful with it also. But how much are they going to invest in localising and customising; how much will they invest in making the product better? That's always a question..."
Leo Burnett created the newly rolled out campaign that will have four TVCs in Hindi, Telugu and Marathi. The ads will air on popular GEC, movies and English cluster channels, in addition to a few regional channels. Rajdeepak Das, MD, India and chief creative officer South Asia, Leo Burnett, says he had plenty of fun creating the campaign. "You can see the energy and feel the vibe in the ads," he laughs.
"The youth in India often deal with the pressures of judgment, individuality, social norms, and more; in this chaos, music acts as a companion. In this campaign, Anil Kapoor makes a cool dad who, even in his 60s, is as young and energetic as a 20-year-old. Ishaan, as the son, is India's new generation - full of energy and optimism," Das concludes.