Lessons from Japan and why Spotify’s sees itself in the incubation phase in India

Spotify, the music streaming company, was the last among global internet and tech giants to come to India – largely because it did not want to go wrong here. After preparing for three years, which included putting in place a viable business model, be relevant to consumers and creators and understanding the population curve, macroeconomic conditions and payments infrastructure, the big question is will Spotify be successful in a market, which already has so many music streaming platform?

Moneycontrol's Sunny Sen catches up with Spotify's Global Head of Markets Cecilia Qvist to understand what it takes to move the needle in the world's second largest internet market by number of users. Qvist oversees the company's international expansion, product localisation efforts and growth of users globally. Among the 79 countries Spotify is present in, India is its biggest launch market. “It is a continent, it's not one thing, and one size doesn't fit all,” Qvist says.

Edited excerpts:

Q: Why did you come to India so late?

A: You can say late, or you can say timely. It was a big and strategic market, so we wanted to be well prepared. We spent a few years preparing for this market.

The way we have approached India is very different than what we have done anywhere else – from launching content in five languages, making sure that we have the algorithms to be transferred to these languages, the right playlists, spent time interviewing consumers and creators on what they expect from us, and also from a product market fit what we would need to do to be relevant.

Q: How long did it take?

A: Three years.

Q: Put India in context to Spotify's global growth.

A: This is our biggest market. We had a lot of people take part in this preparation in areas of legal, R&D, licensing, publishing, teams on the ground – it was like training for the Olympics. You need to be prepared. You need to verify the core hypothesis.



There are many factors that we look at when we enter a market: can we make a viable business, can we be relevant to consumers and creators, how is the population curve, how will the economy develop, the macroeconomic conditions, payments infrastructure, all of that. We weight that in before we think it is the right time to go in.

This is not a sprint. This is a marathon.

I think of the market in three phases. You are either in incubation, or you are in scale, or maturity. We are in the incubation phase in India, where we are finding the product market fit to launch new things. We just launched Spotify Lite, started mobile sign-up, and will continue to innovate.

Q: How do you address problems like patchy network and drop-offs while signing up?

A: We see that problem in many emerging markets. In July, we launched Spotify Lite. It is an app that is equally loud and powerful but consumes a lot less bandwidth, and works well on older devices. Launched it in 36 markets, and India is one of the best ones so far.

We have our freemium model in India where you can try out our offering, understand what we do and don't do, and hopefully be persuaded to take the next step. The market is at a very early stage right now. One needs to consider countries like Germany, which are big paid markets today but were not so big five years ago.

We have 232 million users on the platform, of which 108 million are paid. We know how to monetise. We are the largest paid streaming service in the world.

Q: But this is also a market of too many competitors…

A: You will be surprised to see how little time we spend on looking at the competition and how much time we spend looking at what the consumer wants. So, our path is always to stay on the course we have set. We have so many learning from around the globe that we can pull from. If you are too obsessed with competition, it will derail you from the path.

Q: Video streaming businesses are built on exclusivity, but that is not the case in music. Everyone has similar content. How do you differentiate?

A: We have shown it can be done. Having 232 million users consuming music is great. Technology does not respect any boundaries and travels across the globe in a very positive way. With music, there are moods and different genres. For me, music is the language that everybody speaks. For us, it is about how you serve that to our users, exclusive or not. Make them discover new things and learn new things. What can be applied to music can be applied to podcast. Music doesn't respect any borders or pathways.

Q: Is India the biggest, most complex and diverse country Spotify has gone to?

A: It is a continent, it's not one thing, and one size doesn't fit all. If you look at numbers and size of the audience, India is the biggest (when it comes to diversification).

Q: Are there any specific learning that you have brought to India from other countries?

A: When we launch in a country, we try to offer a mix of local and international content on the platform. When we launched in Japan, it was a very big learning. It is big on local labels, like it is here. What we misjudged that time was the need for a local catalogue. We thought that the international catalogue will suffice. When we entered the market, we realised we had not done our homework. Majority of the searches was for local labels. We had to rethink and go back to the local labels to get them on the platform.

When we entered India, we did our homework well. It is just not one thing, there are several things. That is the fun part of the job.

Original Source: https://www.moneycontrol.com/news/business/lessons-from-japan-and-why-spotifys-sees-itself-in-the-incubation-phase-in-india-4397991.html