As Spotify turns 3 in India, here’s a look back at its journey so far

• Spotify recently celebrated its third birthday in India and we thought this would be a good time to look back at its journey so far.
• We caught up with Amarjit Batra, Managing Director - India, Spotify and Arjun Ravi Kolady, Head of Sales, Spotify India who spoke to us about all that has been happening at Spotify and their roadmap for the years ahead.

When Spotify entered India 3 years back, the audio streaming industry in the country was just getting heated up. People were still getting used to the idea of paying a subscription for listening to music. 3 years later, things are changing.

For Spotify, it has been an interesting journey. India now figures in the top 20 markets for the Swedish audio streaming platform globally in terms of user created playlists. The platform recently revealed that it saw a 165% increase in its premium subscriber base in Q421, and India and Indonesia were important drivers for this growth. Gustav Gyllenhammar, VP of Markets and Subscriber Growth for Spotify Technology SA also shared in a recent interview that the number of subscribers in India had doubled in 2021.

Spotify added 61 million monthly active users across the world in 2021, out of which 25 million users were paid subscribers and the rest were ad-supported users, the platform said last month in a letter to shareholders.

To understand Spotify’s journey in India so far and its plans for the years ahead, we spoke to Amarjit Batra, Managing Director - India, Spotify and Arjun Ravi Kolady, Head of Sales, Spotify India.

Excerpts:

Q) Its been 3 years since Spotify entered India. How would you say its journey in the country has been so far?
Amarjit: Though the last 2 years have been challenging due to the pandemic, we as a team and as a market have been able to strive through, and we're very thankful for that. It's just been 3 years for us in India but we now see ourselves as clearly leading the market in terms of growing the streaming business and building the habit for listening to audio. India has also become an important market for Spotify and the organization is looking at India strategically, for the long-term. We have grown well both on the music and our podcast side. Three years back, podcast was relatively new in the market but I can happily say that we have been able to drive both podcast awareness and consumption in India. In fact, last year, 1 in 4 of our users were podcast users which is pretty significant and we hope that this number keeps improving. Anchor (Spotify’s podcast creation tool) has been doing well and there’s a new DIY trend in India in podcasts. We are also focusing a lot on some great original podcasts and have have some blockbuster hits last year.

Arjun: If you look at it from the business on the advertising side, 2 out of the 3 years we have been here have been pandemic years and we had to evolve in the way we engaged with the market, our customers, clients and agencies. But overall, it's been positive because the pandemic gave digital a massive boost. Before the pandemic, there were advertisers who were digital-first, so they doubled down on the medium. And there were advertisers who were slower to adopt digital but the pandemic made them realize that at a time when people were stuck at home, digital was how they could engage with their consumers. So, the pandemic has been a force multiplier for the digital advertising ecosystem and we’ve seen its impact on our business where we’ve seen significant growth. We’ve expanded the number of brands we've worked with, the solutions we work with and revenue has been growing at a very healthy rate overall. In India, audio is still at a nascent stage, and we see ourselves as the platform that will educate and inspire this market to build the future for audio advertising in India.

Q) But when you talk to advertisers, does it still take a lot of convincing or are they sold on the effectiveness of the medium?
Arjun: Audio is a subset of the larger ecosystem in which we operate. Just like the pandemic forced many people to come online, there were advertisers for whom a major chunk of their money was going to offline mediums, despite the fact that consumers had moved. According to eMarketer data from last year, total time spent on audio (music and podcast), is higher than time spent watching videos or gaming. So ultimately, monetization will follow where the consumer time is being spent. We are very early in the journey. There are brands that get it. Brands like Netflix, Mondelez and Oppo are early starters. And the rest will follow.

Q) Are there any growth data points you can share when it comes to Spotify’s India performance?
Amarjit: While I can’t share numbers, I can tell you about the depth of our growth so far. When we entered the market, we had a presence in the metros and Tier I cities but now Spotify is streamed in over 7500 cities and towns. A lot of our listeners love to create playlists, and that's our unique strength. Almost 150,000 playlists are being created every day by Spotify India users and that makes us among the top 20 markets globally. Meanwhile, there’s been a 130 times growth in podcasts created through Anchor since the start of 2020 which is again a big number. Spotify now has 150+ Spotify Original and Exclusive podcasts spanning in multiple regional languages. We are seeing more and more regional language podcasts, people have created podcasts in over 13 languages on Anchor through which I feel we’ve opened up a huge potential for local language creators to come on board. We have also doubled our premium user base in the market in the last one year so it has been a good 3 years for us.

Q) What do you think has helped you bring paid customers to the platform?
Amarjit: When we had entered India, the audio market was still amateur. We knew consumers would first need to get into the habit of listening to audio before they would want to pay for it. But over the last 3 years, we've seen more and more of our regular users move from free to premium. Out of our 400 million plus users from across the world, over 180 million are paid subscribers. In India, we have given consumers the push towards premium by building specific premium products. We have come up with satchet-sized packs that bring people onto the platform and once they use it, we have seen them shift to the larger premium plans.

Q) Are marketers excited about podcasts?
Arjun: The value proposition of podcasts is very clear. People trust ads in podcasts because they trust the podcasters. So ads within podcasts work better, have better recall and better conversion. Advertisers know that if they get the right podcast host to talk about their product, it can take the brand closer to the listeners since a lot of these podcasters almost have cult-like following. So it's almost like getting a recommendation from a trusted friend. We know the effectiveness of the advertising is very high. The only challenge, especially in India, how do we measure the impact it is having, deciding the metrics. It's still early days and there’s a lot of interest. We are working with brands to educate them at this stage. Investments will follow.

Q) Spotify has also had an interesting marketing journey in India. What do you think are a few things you got right?
Amarjit: Our objective here has been two-fold, to grow the streaming market and to create awareness for Spotify. There are still many people out there who may not have heard of Spotify. We understand that want to make sure that people know about us. Our communications have been highly entertaining and quirky because we believe that we are in the business of entertainment. We are helping people connect with cultures, music and voices, so we want to make sure that when we communicate, our tonality resonates with people. It’s worked for us so far. We have been pretty successful in growing our user base and the perception of Spotify as a product. Moreover, one of our strongest focus is to bring unknown artists under the spotlight. A lot of our campaigns are about artist marketing where we connect our artists to their fans. Whenever a new album is released, we help to get them out in a better way. We want to make sure that India is well represented in the overall Spotify cultural diversity. Globally we want to ensure that Bollywood and Indian creators and artists are well represented and that’s been a critical part of our journey.

Q) Where will Spotify’s next phase of growth in India come from? Can we become one of the top 5 markets for Spotify anytime soon?
Amarjit: I can say very clearly that India is among the top markets for Spotify right now. In fact, we are exporting some of our work being done in India to other markets and sharing some of our playbooks because some of the things we have done here are unique and could work well in other markets too. Going forward, our goal is to continue to invest wide and deep; deep in terms of ensuring that we go into different types of languages and tastes of our consumers. India has one of the deepest cultural diversity and we want to do justice to that. On the width of it, we want to create opportunities and moments for people to consume different types of content, different genres of music. We want to make sure that everybody is served well. Being the market leaders, it's our responsibility to create more users and bring them from piracy to pay for music and podcasts.