Spotify Adds Listening Restrictions for its Free Users

Nearly five years after it launched in India, Spotify is adding a layer of restrictions for its free users there.

As of today (9 October) they will not be able to use the repeat function; go back to specific parts of songs; rearrange the order in which they are set to stream; or disable Spotify’s ‘smart shuffle’ setting.

The changes bring Spotify’s free tier in India closer to that which is available in Brazil. The company says that it will run in-app messages to educate free users about why they can no longer access certain functions.

Spotify went live in India in February 2019, and offers one of its most generous ad-supported tiers there. For example, there are no limits on the number of tracks free users can play in a day.

Today’s introduction of restrictions comes after four and a half years of accelerated growth for Spotify in India. The country now ranks as one of its top five markets in terms of monthly active users.

However, India does not yet figure among Spotify’s highest-earning regions, even if its conversion rate there – the percentage of listeners who pay for a subscription – is higher than the local industry average of 1%.

Spotify’s monthly individual subscription costs Rs119 (around $1.45 at current exchange rates) in India, which is substantially lower than the $10.99 a month it costs in the US.

India is among the handful of markets where Spotify also offers ‘mini’ mobile-only subscription plans. They cost as little as Rs7 ($0.0085) per day.

Amarjit Singh Batra, the MD of Spotify in India, said the decision is part of the platform’s continued 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”, which he called “one of the fundamental tenets of the freemium business”.

The measure, he said, is the next part of Spotify’s journey in a market where it plans to be “for very, very long and go very, very deep within languages and cultures”, and that even with these changes, “we will still be probably the best service available for free users in the market right now”.

He added that he does not believe “growth will get affected”, and says that like in Brazil, the DSP will see continued MAU and subscriber growth.

Spotify’s announcement comes a little more than a year after erstwhile local leader Gaana became a subscription-only service in September 2022. ByteDance-owned Resso followed suit in May 2023.

Batra said that Spotify has no plans to increase subscription prices in India, however.

“In a country of our size, when we price a product, we price not for the highest denominator [but] for the largest set of users who can pay for music. We believe it’s the right price at this stage. We don’t want to disturb pricing,” he said.

Instead, the company plans to step up its “marketing partnerships and fan experiences for premium users” to drive conversions. In recent months, the former has included tie-ups with e-commerce companies such as Flipkart and smartphone manufacturers like OnePlus through which customers can get a six-month premium membership for free.

The latter has included access to limited-capacity concerts by Indian independent artists and a promotional event for the Hindi film ‘Rocky Aur Rani Kii Prem Kahaani’ featuring interviews with the movie’s lead stars and performances of the soundtrack’s songs.

Batra did not directly address a question about whether the new restrictions were a result of increased pressure from labels, as was the case back in 2011 when it introduced listening restrictions for its free users in Europe. They would later be removed.

In 2023 in India, the labels have been clamouring for DSPs to shift their efforts from focusing on an advertising-dependent model to working towards turning India into a paid subscription market.

However, Batra did agree that “if you look at the size of other markets globally versus India, we are quite small in terms of revenue so ultimately, it boils down to the investments labels can make”.

In 2022, India was the 14th largest market in the world according to the IFPI’s Global Music Report with recorded music revenues of $318.6 million. Its per capita revenue, in contrast, is among the lowest.

“When I came [into] the music industry five years back, I saw that there were only a few hundred artists who were making the pool of overall music in this country,” said Batra.

“If you look at the 100 million songs [on the platform] today, there are a million or two million songs from this country. [So relative to] our size, [there’s a] paucity of artists. There’s enough talent but there’s no revenue for them to succeed. We are changing that.”

October 13, 2023