Spotify's quest for global domination faces a wealthy challenger in India
Spotify is missing in action in the key digital market of India. When it does show up, it will have to face down the country’s richest man.
Reliance, the conglomerate run by billionaire Mukesh Ambani, announced last week that it was buying Saavn, one of India’s top online music platforms. The companies said the business, when combined with Reliance’s own JioMusic, would be worth over $1 billion.
“Our alignment with Reliance enables us to create one of the largest, fastest-growing, and most capable media platforms in the world,” Saavn co-founder and CEO Rishi Malhotra said in a statement.
It’s a crowded market with enormous potential.
Saavn and JioMusic are locked in a race with local players like Gaana.com and Wynk, a platform owned by Jio’s main telecom competitor Bharti Airtel. Chinese tech giantTencent(TCEHY), one of Spotify’s investors, led a $115 million investment into Gaana.com in February.
Sweden-based Spotify will also have to contend with other global competitors. Google Play Music(GOOG) and Amazon Prime Music(AMZN) have both launched in India within the past year, while Apple Music(AAPL) has been available in the country since 2015.
Spotify did not respond to requests for additional details on its India plans.
“India as a content consuming market is evolving very fast,” Hanish Bhatia, a senior analyst at tech consultancy Counterpoint Research, told CNNMoney. “We still have a significant portion of the population which is yet to join the digital umbrella,” he added.
Backing from Ambani could give JioMusic an edge over its competitors.
Ambani, estimated by Forbes to be worth $39.4 billion,launched his new mobile network, Reliance Jio to great fanfare in September 2016 — offering free 4G internet for the first six months and cheap data plans thereafter.
It also helped Jio build up a subscriber base of over 160 million people in less than two years, all of whom will soon have access to JioMusic and Saavn’s combined library. Spotify(SPOT), by comparison, had 71 million globalsubscribers on its platform by the end of 2017.
Bhatia said Jio and other local players also hold an important key to capturing India’s unconnected millions — its dozens of regional languages.
“Success of [new] players will largely depend on how well they’re able to create a smooth stream of regional content,” he said. “In such a case, Reliance does have an upper hand.”