Spotify to restrict some features for free-tier users in India to encourage paid subscriptions (report)

Credit: Shutterstock/Diego Thomazini

In a move aimed at bolstering its paid user base in India, Spotify is introducing limitations on features available to free-tier users.

These changes, reported by Music Ally on Monday (October 9), are arriving nearly five years after the platform launched in India in 2019.

Free users will no longer be able to manually order songs or use functions like rewinding, or repeating tracks.

Since its launch in India, Spotify has provided a generous free-tier service in the country, enabling users to play songs in any sequence and play an unlimited number of songs in a day.

However, citing market maturation, Spotify has opted to adjust its free-tier offerings, aligning them more closely with the service provided in Brazil, Music Ally reported.

Amarjit Singh Batra, Managing Director of Spotify in India, underscores this decision as part of the platform’s ongoing efforts to “bring people to free from piracy or services [where they are] not having the best experience and then ultimately convert them to go for paid,” he was quoted as saying.

Batra added that the measure is part of Spotify’s strategy in a market where it plans to be “for very, very long and go very, very deep within languages and cultures.”

The executive further stressed that the change will not impede growth, drawing parallels with the Brazilian market where Spotify continues to experience sustained growth in monthly active users and subscribers.

Separately, an industry executive reportedly told TechCrunch that the restriction is a positive development for Spotify as it could pave the way for a market shift toward a subscription-led model.

“However, it’s to be seen if Spotify’s restrictions could push users to pay for the service or simply use another service,” the executive was quoted by TechCrunch as saying.

Although India ranks among the top five countries for Spotify’s monthly active user count, it doesn’t hold a prominent position in terms of the ratio of subscribers to free users. This is attributed to the prevalent preference for the ad-supported model among Indian users.

Gustav Gyllenhammar, Spotify’s VP for Markets & Subscriber Growth, told Billboard in April that “India is the single market that has contributed the most to our global growth over the last year,” with the company’s user count in India tripling over the last two years.

However, Gyllenhammar acknowledged at the time that India is not a Top five revenue market for the platform.

In a bold move, Gaana, one of India’s major homegrown streaming platforms, opted to completely phase out its free streaming option last year. The decision came as the platform’s subscription earnings were only a fraction of its advertising revenue, accounting for just one-third of the total.

“There is this third group of countries such as India and potentially Egypt, which have very large populous markets who predominantly use ad-supported streaming services and are yet to move to a paid ecosystem. When that happens, you will see a big surge in market growth,” said Adam Granite, Universal Music Group’s CEO of Africa, Middle East and Asia, in IFPI’s 2023 Global Music Report.

In India, Spotify’s monthly individual subscription is priced at 119 rupees (USD $1.45), significantly lower than the $10.99 monthly rate in the US.

Citing data from Comscore, Billboard noted earlier this year that Spotify has about 55 million monthly users in India.

Meanwhile, Spotify is reportedly introducing its Smart Shuffle” in India, a feature that automatically suggests songs based on a user’s preferences and the current song or playlist being played.

Launched for subscribers in March, the feature aims to enhance playlist curation.

Music Business Worldwide

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