No Walkover: Spotify Faces Tough Competition From Amazon, Apple Apps

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Within a week of its launch in India, international music streaming platform Spotify made headlines by clocking one million users. While it is late to the party — Apple Music, Amazon Music and Google Play Music have been around, along with long-standing Indian players such as Gaana, Wynk and JioSaavn — Spotify seems to have got off to a good start.

With the entry of players from the telecom and retail businesses, ‘bundled’ options have also emerged, giving rise to three revenue streams — ad-supported, paid and bundled. Sanchit Vir Gogia, chief analyst, founder and CEO, Greyhound Research, cites the Amazon Prime offer at Rs 999 as an example. “It is an aggressive offer, bundling Prime Video, Prime Music as well as the Prime delivery membership. It will be tough for consumers to migrate from Apple Music or Amazon to another app.”

Customers in the tier I and II markets have already curated their playlists and paid for premium on other music streaming apps, which poses a challenge to Spotify. “Spotify has to really work hard on vernacular content, if it wants to earn subscription revenue from tier II and III markets,” adds Gogia. He suggests that instead of replicating its premium subscription model of the US, Spotify should turn to advertising, branded content and sponsorships in India to make money.

[Financial Express]


Sanchit Vir Gogia: Sanchit is the Chief Analyst, Founder & CEO of Greyhound Research, a Global, Award-Winning, Technology & Innovation Research & Advisory firm. To read more about him, click here.

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