After four years of its journey in India, the music streaming platform Spotify decided to scale up its operations and ad business in one of the most significant markets of the world by taking the fast-track Indian Premier League (IPL) route.
“Very interesting creative solutions and innovations are lined up to excite listeners as well as brands during IPL,” Arjun Kolady, Head of Sales of the Swedish streaming giant told e4m, when asked about Spotify’s IPL offerings. He didn’t disclose details of these offerings though.
Richard Frankel, the Global Creative Director of the company was in India last month as Spotify India celebrated its fourth anniversary. He shared the company-funded study “Sonic Science 2.0” which claimed that audio is one of the most effective media when it comes to recall value. The study also found that the ads have 19% higher Brand Impact on Spotify compared to all other media.
Spotify, which is skewed towards Gen Z, claims it currently works with over 300 brands including Visa, Samsung, OnePlus, Amazon and Mondelez.
As internet access, smartphone usage and online transactions are on a rise in India, Spotify sees a huge opportunity for its growth. The company hopes to double its transacting users in India by 2030 from the current 350 million to 700 million.
Over 40% of Spotify users are premium members who drive most of its business. However, the premium membership is not growing at the same rate as it was in the last few years due to economic constraints.
To acquire more young consumers especially those from Bharat, Spotify has recently launched UPI for recurring subscriptions and free trials. Previously, only users who had a debit or credit card, were able to access a free trial.
Spotify has recently announced new features for creators and fans.
Frankel and Kolady shared insights into the company’s India journey, their expansion plans and challenges.
On challenges
Arjun: It has been a fantastic journey to market leadership in India, over the last 4 years.
On the ad side, we have worked with over 300 brands, which includes Media and entertainment brands, FMCG companies, tech firms and device manufacturers, fintech and travel aggregators. We won several awards, grew the team, and built strong alliances with our clients and agency partners.
But, there is still so much to do. Digital audio advertising is still an emerging space, and as market leaders, our responsibility only increases to help the ecosystem move forward. We will continue to double down on evangelisation, education, and inspiration in audio.
Richard: Being the largest audio streaming service isn’t an entitlement. It is a reward! And it’s one that has to be earned every single day. We have to stay focused on making sure each one of our listeners in India feels that we are their trusted and capable audio companion as they use our platform to soundtrack their lives. When we stay focused on music fans and on audio consumers more generally we are able to build for the moments and moods and mindsets that animate their lives.
On expansion
Arjun: We want to take audio to its rightful place in the media landscape, especially given the fact that time spent on audio is more than video streaming, gaming, news, etc. We are growing our team to cover the market beyond our primary verticals of media, tech, and FMCG, and we will bring more advanced measurement and creative solutions to India this year.
And finally, we want to continue to help drive innovation and accountability through programmatic and automation.
Richard: This is an awesome and wide-open question so I am not sure if this answer addresses the exact territory you are asking about but it got me thinking about growth and how we have managed it and a few things are still core to that. First is to always try to be as relevant locally as you are globally.
We sometimes slow our market expansion to make sure that we are able to launch with repertoire and languages that are expected in every market. We also like to spend as much time as we can building audiences and listener loyalty before asking advertisers to participate in those listener interactions. It’s more than just a matter of achieving scale. Managing expansion with these concepts in place creates more trust and more brand love and longer-lasting opportunities for all of our partners.
On IPL offerings
Arjun: The excitement around IPL is building up and we are helping our partners understand how best to leverage Spotify as a part of their media mix.
While the actual viewing of the matches will not happen on Spotify, we own the build up to the match and when the celebrations after the match – across phones, smart TVs, car, watch, gaming consoles and home speakers.
Last year we saw a 113% increase on cricket related streams on Spotify during the tournament. As per GWI, 77% of Spotify free users are cricket fans, and 67% follow the IPL. Not only that, 22% of cricket fans on Spotify have participated in fantasy sports, and 71% of cricket fans on Spotify, use digital payments.
We have some very interesting creative solutions and innovations that we have lined up that will excite our listeners as well as brands during the tournament.
On innovations
Richard: Spotify is currently working on an AI-enabled DJ, which would be a personalized AI assistant that would play music as per your choice. We are also working on NFT-enabled playlists. However, Indian users will have to wait for these innovations.