For Spotify to grow its database of paying subscribers globally, the streaming giant is looking to emerging markets as a likely source of revenue. With a recent announcement of 13 new markets being launched in the Middle East and Africa, this step will come as the latest in a series of moves by the Swedish company to capture bigger portions of a global market.
Currently, Spotify is the world’s largest streaming service, but that title has come with increased pressure to financially perform at a high level. Over the summer, the service’s valuation reached its peak at close to $35 billion, but shares have been dropping ever since, with a recent dip back to its initial opening valuation of $23 billion. Despite growing its paid subscriber base from 57 million in June 2017 to 83 million in June 2018, the company is facing a series of challenges that it is meeting with a variety of strategies, including buying back $1 billion of their own shares and by moving into emerging foreign markets.
With over 1 billion people residing within its borders, India is second in global population rank, behind neighboring country China. Since China has such strict regulations regarding both the internet and how companies operate in the country, it’s no surprise that Spotify is looking to infiltrate India first. This doesn’t mean there won’t be challenges, as India-based streaming services like Gaana and Saavn, as well as American competitors Google Play and Apple Music, already have a foothold.
As a potential solution to being late to the game, Spotify is considering using an extended-trial business model. This would offer access to the premium service for longer than the 30 free days that has characterized their service in other markets. However, this could cause a delay in monetizing their new customer base.
Additionally, the country has dozens of dialects and distinct regions, creating more challenges for streamlining the service. As it has done in other countries, Spotify will create a host of playlists that are suited for Indian listeners to attempt to sway them to subscribe. While the exact launch date is unclear, but one thing is certain: as access to the internet expands across the globe, access to music from all over the world won’t be far behind.