It is a difficult time to be a streaming service. Over the past few months, the shares of American streaming pioneer Netflix have taken a beating and its subscriber count has shrunk shrunk FT Are you still watching? Netflix and the future of streaming Read more for the first time in a decade. Swedish audio streaming player Spotify’s valuation, meanwhile, has dropped by a quarter.
But Spotify managed to add 2 million subscribers in the same time alongside a 24% rise in total revenues, forecasting the addition of another 5 million subscribers in the next three months.
Some of this can be credited to its growth in India—the company claims its total subscriber count in the country doubled over the past year. Growth that top Spotify executives spent all of February talking about talking about Economic Times India among Spotify's top engagement markets: Gustav Gyllenhammar, VP Read more , just as the company completed three years in India.
“If you look at the TAM (Total Addressable Market) in [India and Southeast Asia], India alone is over a billion. So it’s just a massive opportunity from an MAU perspective,” Spotify CEO Daniel Ek had said in the company’s quarterly earnings call last month.
But India is also home to a notoriously price-sensitive audience that is spoilt for choice in every format. The result of this is best illustrated by Netflix, which had to revise prices and offerings to lure subscribers, including slashing slashing The New Indian Express Netflix cuts subscription rates in India, Basic plan to now cost Rs 149 per month Read more its basic plan price by more than half to Rs 199 (US$2.58) a month. And yet, it claims to have ‘ frustratingly frustratingly Economic Times Netflix’s lack of success in India ‘frustrating’, cofounder Reed Hastings says Read more ’ fallen short of its own ambitions for India.
Now, Spotify’s model is quite different from Netflix’s. It does not own most of the content on its platform and does not have exclusive rights to it. It also has a large ad-serving, free ecosystem unlike Netflix, and though Spotify does not give out the share of paid subscribers, multiple executives in the audio streaming industry said it probably won’t be very different from the industry average of roughly 1%.