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Spotify will reportedly launch its music streaming service in India early next year

Spotify, one of the world’s largest music streaming providers, expanded its service to more parts of the world as it launched in 13 new markets in the Middle East and North Africa regions earlier this month. The company also confirmed back in April that it was planning to launch its service in India. Reports of the firm’s corporate office opening in Mumbai, the financial capital of India, further provide credibility to its plans, and today, a new report suggests that the firm will finally launch its music streaming service in India early next year.

As per the report, people familiar with the matter say that the company has secured deals with many major music rights holders in the country and that the service is preparing for a launch in the first quarter of the next year. The service is expected to launch with an extended free trial offer that will allow users to access the trial for longer than the usual 30-day period.

The Indian streaming market, with approximately 100 million music streaming customers, is lucrative. With increasingly cheaper costs for high-speed internet from network service providers and an ever-increasing customer base, Spotify can significantly grow the number of subscribers that sign up for the service, in turn justifying the investments in expansion.

However, the company faces a whole host of challenges. Though the music streaming industry in India is growing exponentially, only a small fraction of the customers opt to pay for the service. Ad-supported freemium models from the likes of streaming giants such as Saavn and Gaana, along with international names with deep pockets such as Google, Amazon, and Apple that charge a nominal fee for their service will prove to be quite the competition. Additionally, a very small percentage of consumers own credit cards in India, which probably is one of the reasons why the company plans on introducing a longer-than-usual free trial period. It's worth noting though that the company does have a free tier, but it trying to push customers towards the premium offering is understandable.

Adding on top of all this is a fragmented marketplace that stems from the myriad of local languages. Raking up deals with large labels is one solution, however, of the big name record labels in the world, only Sony has a sizeable share in the country. Spotify was actually threatened by major Indian music labels when the company tried bypassing the music companies and license acts directly.

It will be interesting to see how Spotify overcomes these challenges and how the company plans to position its service as a viable alternative to the already established players.

Source: Variety via Bloomberg

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