Spotify, the music streaming giant, has removed Zee Music tracks from its app and browser sites after negotiations for a renewal of their licensing agreement fell through. This decision has left Indian users without access to popular tracks, including Apna Bana Le from Bhediya, the number one track on Spotify India over the past two weeks.
The Daily Top 200 Songs chart for India, previously dominated by Zee Music tracks, is now absent from their songs. The removal of these tracks from the platform may lead to a slowdown in Spotify’s growth in India, where it entered the market in 2019 and is still struggling to cater to the region’s diverse musical tastes.
In India, the majority of people prefer streaming music on YouTube with Zee Music and T-Series having among the maximum share of subscribers. This gives Zee Music leverage over Spotify, as it can demand higher payments for their music on the platform. The roughly 5-10% (20-30 crores) that Zee Music earns could and has become a mere amount that Spotify pays out, and has indirectly given an indication to pace up, if they want to pursue their enormous vision of music streaming in India. However, Spotify faces more challenges than just paying for the music, as it needs to compete with YouTube’s dominance in the market.
While Spotify has 500 million monthly active users globally, its Indian user base remains unclear. Users affected by the removal of Zee Music tracks have expressed their disappointment, with one user stating that they had lost three hours from their Hindi music playlist on Spotify. However, some users have been able to find alternative streaming services to listen to their favorite tracks.
Experts believe that the delay will not hurt Zee Music significantly as most music companies, including Zee, have diversified their digital offerings across various platforms, with YouTube often claiming the largest share. Zee Music has nearly 94 million subscribers on YouTube and has cut ties with Gaana, a few months before the audio-streaming platform became a subscription-only service. Spotify India has been trying to break out of its nearly 50:50 revenue mix for subscriptions and advertising and lean more towards the former, with India-specific offers like mini-subscription plans.
However, Spotify is still trying to cater to the Indian subcontinent’s musical tastes. Unlike in the West where Spotify dominates the music streaming market, Spotify is still struggling to compete with its Indian competitors like Gaana or JioSaavn. These competitors have more extensive Indian playlists and their search results are more sensitive to the taste of Indian audiences. Spotify’s algorithm needs more usage data on Indian music to better calibrate these searches. For instance, a search for Shah Rukh Khan’s romantic hits on Spotify will not list out his songs in order of their popularity, and users may find Ye Kaali Kaali Aankhen or Kal Ho Na Ho somewhere deeper into the playlist, mixed with his more obscure songs.
According to JioSaavn’s data, it has over 100 million monthly active users, while Gaana claims to have crossed 185 million monthly active users in 2020. More importantly, there’s YouTube, which is arguably the most popular destination for Indians to get their music fix for free. Globally, Spotify is the leading audio streaming service, with 489 million users and 205 million premium subscribers across 180 regions. Last year, the music platform’s growth in India, South East Asia and Latin America had helped it cross the 450 million mark in global users in the quarter ending September 2022.
In conclusion, the removal of Zee Music tracks from Spotify’s app and browser sites may lead to a slowdown in Spotify’s growth in India, where it is still struggling to cater to the region’s diverse musical tastes. While the impact of the licensing dispute on Zee Music’s revenue is expected to be minimal, it remains to be seen how the removal of popular tracks will affect Spotify’s revenue and user base in India. Nevertheless, the music streaming giant continues to make efforts to increase its revenue mix in India by leaning towards subscription-based plans, offering India-specific mini-subscription plans, and exploring partnerships with telecom companies to provide bundled offerings to users. As the battle for dominance in the Indian music streaming market continues, it remains to be seen which player will emerge on top.
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