Spotify restricts the use of its app for customers from India who interact with this virtual platform as part of a free tier.
The media reports that this decision of the company is explained by the desire to increase the number of Indian users who have subscribed to paid tariff plans. Spotify was launched in this South Asian country in 2019. As a result of the restrictions imposed by the company, Indian users who have not subscribed to the paid tariff can no longer play songs in manual order and do not have access to the ability to rewind, repeat, or delete musical works.
Four years ago, this streaming service, created in Sweden, offered a free tier in India. As part of this solution for consumer interaction with the virtual platform, users could play songs in any order. This year, the company decided to abandon this offer, believing that the local market is ripe for new commercial formats of content consumption hosted by the streaming service.
The firm described its decision as a change in the level of free. This assessment from the point of view of actual changes for consumers can be formulated somewhat differently, noting that the space of possibilities within the framework of interaction with the virtual platform outside of paid tariff plans is limited.
The musicians reported that the innovations for the Indian market are similar to the offers that Spotify has already implemented in Brazil. The company claims that India is one of the five largest countries in terms of the number of active users of the service. At the same time, this country is not included in the list of leading markets in terms of the ratio of subscribers and so-called free consumers. In India, most users opt for tariff plans with advertising.
Spotify is also launching Smart Shuffle in India. As part of this offer, users are provided with automatic recommendations based on their musical preferences and the most frequently listened to songs. For those who have subscribed to paid tariff plans, this feature became available back in March. The company has implemented this solution in order to offer the best options for adding songs to the playlist.
Experts positively assess Spotify’s decision. In their opinion, the consequence of this action of the company will be the reorientation of the market to the subscription model.
At the same time, Spotify representatives are very reserved about the prospects of their decision. According to them, the issue of consumer reaction to innovations is currently unresolved. It is possible that users will start interacting with other streaming services against the background of the new conditions.
With a high degree of probability, it can be assumed that some part of consumers will agree to paid Spotify tariff plans. The success or failure of the company will depend on the percentage ratio of those who accept the new terms and those who disagree with the decision of the streaming service.
This year, ByteDance-owned Resso gained access to a free tier in India, Brazil, and Indonesia. In July, ByteDance launched TikTok Music in Brazil and Indonesia.
According to the music industry organization International Federation of the Phonographic Industry (IFPI), India is not included in the list of top 10 markets in terms of subscriptions. Also, currently in this South Asian country, the level of digital piracy is 73%. The global average at the same time is 30%.
Data from the analytical company Redseer indicates that Spotify is the leader in the number of streams in India. But the study did not take into account YouTube, which has more than 450 million users in this country.
Spotify registered 220 million subscribers in the quarter ended June. This figure is 17% higher than the result for the same period last year.
As we have reported earlier, Spotify Raises Its Premium Subscription Price.