TEAM RED WINE IIFT

EXECUTIVE SUMMARY
SPOTIFY INDIA- GAME OR LATE TO GAMING PARTY

Situational Analysis
Indian Music Streaming Industry
 A particular Indian consumer spends 21.58 hours per week listening to music in contrast to the
global average of 17.89 hours a week.

 The Indian music streaming industry contributes to 0.88% of the global revenue.

 The main growth drivers of the industry are localization and personalization according to industry
experts.

 Currently, the major challenges faced by the music streaming industry in India are piracy, value gap
i.e. sharing value across music value chain sustainably, and regulatory obstacles – mainly statutory
licensing.

Revenue CAGR Penetration Subscriber Base ARPU

$220 Mn 8.7% 6.8% 137 Mn 2.38 USD
USD

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Porter’s Analysis

Competitive Rivalry
Existence of other streaming services like JioSaavn, Gaana, Google Play, iTunes, YouTube
Music and Amazon Music with little product differentiation offers great competition to
Spotify.

Substitution Threat
It is tough for Spotify to grab a significant share in the Indian music streaming market due
to platforms offering similar services at a relatively lower price e.g., JioSaavn charges
₹399/year for its premium version.

Buyer Power
Customers have numerous options to choose from at almost the same or low price giving
them a lot of bargaining power.

Supplier Power
Spotify has the largest market share in the music streaming industry worldwide, implying
a large and robust supplier network. It also features the newly created music of emerging
artists, thus expanding its supplier base and improving relationship with suppliers.

Threat of New Entrants

Underutilised capacity of the industry and high number of competitors make barriers to
entrance high resulting in low threat.

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PRIMARY PROBLEMS FACED BY SPOTIFY

ROAD MAP TO COMBAT THE PROBLEM

#1:Low differentiation from other streaming platforms & Competitive disadvantage.

Solution: Product Innovation & Development

1. Introduce Audiobooks (Tie up with major publishing houses):

 Consuming content from written text can be time consuming, so while reading is more
preferred at the moment in absolute terms, it showing bearish tendencies in the content
market while audiobooks & podcasts are showing bullish tendencies.

2. Invest in creating in-house content for podcasts:

 In house content will give Spotify the edge of differentiation, an attribute that cannot be
easily pirated and/or imitated. Consumers of podcasts on specific topics create a niche
Target Group, marketing to this Target Group will have better ROI. Purchase intent for
brands advertising on podcasts increases ~8%.

3. Multiple Language Support

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 Creating content and featuring content in colloquial languages. Curating folk content,
reaching out to indie artists in remote India and featuring it on platform. Translating news,
and other podcasts in regional languages to reach out to a larger Target groups.

 Making app features in more languages across the country.

4. Discover Weekly: Leveraging from its existing discover weekly campaign and promoting it further.

5. Diversifying into music products & accessories with embedded app features & select songs. (To
combat competition from SaReGaMa Caravan, alexa etc)

#2: Price Sensitive Market leading to low ARPU (compared to global Spotify standards)

1. Compete with JioSaavn & Gaana for existing customer base:

 Break clutter by increasing ad spends across digital platforms to enhance brand recall &
brand love.

 Focus on promoting original inhouse content, personalization features (discover weekly:

how it helps you evade the cycle of same old songs)

2. Enhance customer base of music streaming platform users:

 Focus digital content on multiple product offerings: audiobooks, podcasts, high quality
music, wider selection choice and target this content on torrent sites via Google ad mobs.

 Tie up with Instagram & other social media influencers such as Lisa Mishra, Ritwiz etc to
run a “find us on spotify..” campaign.

3. Convert existing users to premium model:

 Focus on how accessing content is not dependent on internet & hence saves internet
spends. (Digital content targeting college students can be created)

4. Since maximum revenue is from Freemium model, try to capitalize on the opportunity of increasing
revenue through ads, if absolute revenue from ads increase -> ARPU will increase.

 Provide advertising platform to brands for contextual marketing. Consumer moods can be
gauged through the playlists they are accessing, and relevant products can be targeted
during particular moods, providing key opportunity to brands to increase conversion &
hence ROI.

 Content embedded ads on podcasts

#3: Piracy

 Incentive for pirated content should be removed, but Spotify cannot reduce costs hence should
focus on value the customer receives wrt cost. Specially all offline content for premium users.

 Focus on user experience sp. Personalization.

 Digital content focussing on risk from malware on downloading pirated music.

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SUPPLEMENTARY STRATEGIES

1. Goal: To break clutter & increase brand love:

 Invest in budding music creators and folk musicians

 Sponsor/ organize music concerts specially promoting Indie artists

2. Create a social community on the app to facilitate sharing of playlists, music, suggestions, likes etc.

Submitted by-

Team Red Wine

Munmun Mohanty

Jaisika Singh

Akanksha Singh

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