Music streaming platform Spotify has announced its plans to double down on ad revenues in India, citing the country’s growing user base and increasing demand for streaming services. The move comes as part of the company’s broader strategy to expand its presence in the fast-growing Indian market.
India has emerged as a key battleground for music streaming services, with a rapidly growing middle class and an increasing number of smartphone users driving demand for digital content. According to a recent report by PwC, the Indian music streaming market is expected to reach $273 million by 2023, up from just $78 million in 2018.
Spotify entered the Indian market in 2019, and has since been competing with local players like Gaana and JioSaavn, as well as international rivals like Apple Music and Amazon Music. While the company has been steadily growing its user base in India, it has struggled to turn a profit in the country, with a focus on subscription revenues that has yet to yield significant results.
Now, Spotify is shifting its focus to advertising, with plans to increase its ad-supported user base in India. The company has launched a new advertising campaign in the country, highlighting the benefits of its free, ad-supported service and targeting younger audiences.
According to Spotify India’s managing director, Amarjit Singh Batra, the company’s ad-supported service has seen strong growth in India, with over 50% of new users signing up for the free service. By focusing on ad revenues, Spotify hopes to tap into the growing demand for digital advertising in India, which is expected to reach $5.5 billion by 2026, according to a report by Dentsu.
Spotify’s move to double down on ad revenues in India is also part of a broader trend in the industry, as streaming services look for new ways to monetize their user base. With subscription revenues often falling short of expectations, companies are turning to advertising as a way to generate additional revenue and attract new users.
However, the shift to advertising is not without its challenges. Ad-supported services often face criticism for the quality and intrusiveness of their ads, and must strike a balance between monetization and user experience. In addition, competition for digital advertising in India is fierce, with Google and Facebook dominating the market and smaller players struggling to compete.
Despite these challenges, Spotify remains optimistic about its prospects in India, citing the country’s large and growing user base, and its potential as a key market for the company’s future growth. With a renewed focus on advertising, Spotify hopes to build on its early successes in India and cement its position as a major player in the country’s music streaming market.