During the last couple of years, Spotify Technology S.A. (SPOT) Spotify has become one of the top music streaming services in the Indian market, but it is forced to improve monetization.
Service companies are focusing on India as a potential growth market. The population of the country will rise to 1.5 billion by 2025, according to forecasts. A sharp rise in smartphone usage has also been observed in India. In 2017, only 25% of Indians were using a smartphone, but by 2022 this number could rise to 36%. As a result, the number of people using Spotify services increases.
According to App Annie, Spotify Technology S.A. (SPOT) had 42.1 million daily active users in India at the end of September 2020. Streaming services provider Spotify is also on track to become the country’s largest provider. The low subscription fees and Spotify’s focus on local podcast writers have fueled this growth. Premium subscriptions for Spotify are typically around $1.38 per month.
Since India is growing faster than, for example, in Europe, the share of international Spotify users is growing, as sales in the country are increasing. As of the first quarter of 2019, 13 % of total Spotify subscribers were located in the rest of the world. By the end of 2020, 19 % of subscribers were located in the rest of the world.
By the end of the next decade, Spotify Technology S.A. (SPOT) is expected to reach 150 million or even 250 million members in India if it continues its current growth rate. As Europe and North America approach saturation points, the Indian market is even more crucial.
The low monetization of Spotify remains a problem in India, with subscribers paying less per month than in North America. As a result, Spotify might be forced to work closely with advertisers to offset lower subscription fees. Local content can emerge as the most important growth point in India, as the company intends to continue attracting local content creators.
The Indian market will thus be an important one for Spotify Technology S.A. (SPOT) soon. In the country, the percentage of people who belong to the middle class is rapidly growing, as is smartphone use. The number of subscribers will increase due to both of these factors.
During Tuesday’s trading session, Spotify Technology S.A. (NYSE: SPOT) went up by 4.13%. During trading, the shares hit a low of $343.00 while hitting highs of $364.00 during the trading day. SPOT traded at $339.70 on the previous day, as per data provided by Barchart, with 1.87 million in trading volume.