7digital — the streaming and download music company that offers a direct-to-consumer service but also partners with the likes of Samsung and Pure to power respectively its Music Hub and radio services — on connected devices like smartphones, tablets and music players, today announced a significant international expansion into the emerging markets of India, Brazil, Argentina, Colombia and South Africa, where it says it has now inked deals both with major as well as independent labels to further expand its catalog of 22 million tracks in 42 countries. The expansion helps 7digital further take on Apple’s iTunes and also means that London-based 7digital has stolen a march on Spotify, which is in 26 countries, including much of Europe and the U.S., but yet to hit emerging markets.
The move underscores the shift we are seeing in growth of mobile services from more saturated markets like the U.S. and Europe to more nascent opportunities in less developed countries — and reflects the same shift we are seeing among hardware makers to target users in these countries. Samsung is currently the world’s largest smartphone maker, making devices on the world’s most popular smartphone platform, Android.
“We’ve seen strong growth in mobile throughout 2012, and believe it will become the largest platform for music in 2013,” Ben Drury, CEO of 7digital, said in a statement announcing the news. “The natural route for us is further international expansion in territories where we’re seeing strong mobile growth.”
7digital says that requests for music via its API have grown 137% in the last year and now tally at 13,500 per minute. We have reached out to Spotify to ask how this compares with their traffic at the moment.
While 7digital continues to offer a direct-to-consumer service, 7digital’s growth has largely been down to the popularity of its partner’s services (and devices). In addition to Samsung and Pure, it powers music services, including streaming, discover and purchases, for RIM, Toshiba, HP, Acer, HTC, T-Mobile US, Ubuntu, Shazam, Last.fm, Winamp, Songbird, HMV, Waterstone’s, Universal Music, EMI, Warner Music and Sony.
As with Spotify, one of the fastest growing countries for 7digital at the moment is the U.S., where it has seen 180% growth in the last year — riding on the popularity of Samsung and Pure devices. Canada at number-two at 117% growth, Switzerland at 79%, France at 70% and Italy at 60%. It notes that some territories have seen year-on-year growth as high as 600% (but doesn’t specify which region that is).
It’s notable that this growth matches with countries with strong smartphone usage already, so the challenge — as it is for all companies that target emerging markets — is whether 7digital will be able to repeat those patterns in markets where smartphone usage is less prevalent, and where users may have less wallet share for digital music services and mobile data to consume them.
And in the absence of players from the U.S. and Europe like Spotify and (until now) 7digital, emerging countries have seen the rise of local companies offering the same services, e.g. Saavn, the “Spotify of India.”
Another partner of 7digital’s, Sonos, uses the music streaming company’s technology to power music purchases, and the service is also available on smartTVs.