Spotify's strategy to increase paid users in India
Shailaja Gupta
Sr. Manager - Data & AI @EY Malaysia || 100+ Analytics, AI & Product Talks @IIMs, DU, Josh Talks, InsideIIM || IIMCom Founder
Recently Spotify removed some privileges from Indian users. Free users can't go back to play a previous song, can't repeat the same song, or select a specific portion of a song.
For all these services, users need to pay. The basic plan starts at Rs.119 in India.
In India, the ratio of free subscribers to paid ones is one of the lowest for Spotify. This despite India being a matured market. Hence, Spotify has tried to restrict the free users from many services (such as playback, repeat a song, select a playlist). Users from free tier can only access the pre-decided playlist. Fo any additional features, they must pay Spotify.
This is because recently Spotify is facing a heat with its margins. Its losses have also increased. Margins is a function of cost and revenue. There are many issues with its costing, hence the next avenue is to increase its revenues. Let's understand issues with its costs.
Issues with Spotify's costs:
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Given its issues with controlling costs due to the lack of control on backlog of songs, Spotify is looking to expand its paid customer base by increasing its revenue.
Their decision to reduce services to free subscribers is in line with Spotify's global policies. India's market has matured, and Spotify has now provided the same services to India's free users as it does to free users in all matured markets. Due to the music industry's upper hand, controlling costs of music labels for Spotify seems tough. Hence tapping in on strategies to get more revenue (via paid subscribers) seems a good strategy so far. Would love your thoughts.
Product Leader | Fintech | AI/ML | Automations | Strategy | Business Leadership | Tier 1| IIM K Alumni
1 年India is a tough market, already saturated with Jio Saavn, Youtube music and Amazon Music. I am not paying for Spotify as a standalone service. Many Spotify-exclusive podcasters have ventured out to other platforms in search of growth. It reminds me of the struggles of multiple such apps faced with rising licensing costs.Sent the industry into a consolidation phase and most were merged/acquired / shut down.
Technology Consultant at EY-India | BI Developer & Data Storyteller | Former Cricket Video Production Assistant- Sportskeeda | Cricket Writer | Content & Creative Writer | Quoran | Cricket & Lawn Tennis Aficionado
1 年If I’m not wrong, I think that even Jio Saavn also tried doing this to free users using the application from mobile (both app and the web browser).
Aspiring Corporate Director / Management Consultant / Corporate Leader
1 年Absolutely, I believe, 'There's No Such Thing As A Free Lunch!' What does it mean! This statement conveys that even though something, such as 'a lunch', may appear free, it is not actually free. That there is a cost included somewhere, whether that cost is paid via other means, or that someone else pays the cost. Syed Awees Happy Diwali, to you, your family and friends, & Thanks for sharing, & Best wishes, Er Shailaja Gupta ??
Share Business news in simple and no-bluff form | Digital Brand Manager | Content Creator | Building startup founders, entrepreneurs, and investors communities.
1 年Really informative share ??
Talks about Personal Finance | YP at SEBI | EY | IIM-K | Investment Banking | Featured at Times Square, NYC | Featured at LI News India | Al & Fintech Learner | Moody's Analytics | Mentor at Topmate | Deloitte
1 年That’s really intriguing move by Spotify to restrict certain features for free users. I wonder how this strategy might impact user engagement and whether it will indeed drive more conversions to paid subscriptions. What are your thoughts on balancing user experience with the goal of increasing revenue?