Music streaming app Spotify, which entered the Indian market in February 2019, has reported a 27 per cent growth in its monthly active users (MAUs) to 345 million in Q4 2020 on the back of ‘notable’ growth of its services in the country. While the number of MAUs for the full year accelerated to 74 million vis-à-vis net additions of 64 million in 2019, the company added 25 million MAUs in Q4 and benefited from “faster growth in India, US, and Western Europe, with India serving as a notable source of upside vs. our forecast driven by successful marketing campaigns,” Spotify said in its quarterly results statement. The music streaming service currently competes with Gaana, Wynk, Apple Music, Amazon Prime Music, JioSaavn, and more.
Spotify had launched its new subscription model Spotify Premium Mini in India that allowed users daily and weekly access to a subset of their premium features for a lower price such as 30 song downloads and unlimited ad-free music on a single mobile for Rs 7 per day. The company had also partnered with Flipkart to offer Premium service free for six months in exchange for shopping for a certain amount on Flipkart. Spotify had also released its first podcast in Telugu on the life of late actor, producer, and politician NT Rama Rao.
The company’s Q4 revenue grew 17 per cent year-on-year to $2.61 billion while the Premium service revenue grew 15 per cent YoY to $2.27 billion. The ad-supported revenue grew 29 per cent YoY to $338 million. “Going into 2021, Covid still has the potential to be a headwind as its difficult to fully gauge its impact. For Spotify, more time at home, resulted in more people discovering streaming and turning to our platform, but it also created disruption in listening habits, consumption hours, and the release of new music and podcasts,” said Daniel Ek, CEO, Spotify during the earnings call.
The Indian music streaming market is expected to be worth $663m in 2021 and witness 14.2 per cent CAGR to become $1.1 billion by 2025, according to Statista. The user penetration from 4.3 per cent in 2021 would likely scale to 6.0 per cent by 2025 while the average revenue per user is expected to be $11.16. Moreover, the ad revenue from Indian music streaming market in FY19 was around Rs 1,000 crore and is likely to hit Rs 2,000 crore by FY24, growing at a CAGR of 14 percent.