Spotify is restricting features for the free tier users in India in an attempt to garner more paid users in the country. These limits, coming years after the streaming service was launched in India in 2019, will not let users play songs in a manual order and won’t let them rewind, scrub or repeat songs.
Since its launch, the Swedish company has offered a liberal free tier in India to let users play songs in any order. However, it said because the market has matured now, it is making these moves to change the free tier. As Musically noted, the new free tier is closer to the one Spotify offers in Brazil.
Spotify said India is one of the top five countries in terms of monthly active users for the service. However, it doesn’t fall under top markets in terms of subscribers to free users ratio — given the majority of users in India opt for the ad-supported model.
The company is also launching Smart Shuffle in India, which automatically suggests songs based on your taste and the song/playlist that you are listening to. The feature was launched for subscribers in March, to help them give better suggestions to add songs to a particular playlist.
An industry executive told TechCrunch that this is a positive development, and we’ll see the market shift toward a subscription model.
“However, it’s to be seen if Spotify’s restrictions could push users to pay for the service or simply use another service,” the executive said.
There have been a few moves in this direction. Last year, Tencent-backed Gaana opted for a paid-only model. Earlier this year, ByteDance-owned Resso scrapped its free tier in India, Brazil and Indonesia. In July, ByteDance launched TikTok Music in Brazil and Indonesia, with Resso now discontinued in those markets. TikTok was notably banned in India along with many Chinese apps in 2020.
India is not one of the top 10 markets in terms of subscriptions, as per a report from the music industry body International Federation of the Phonographic Industry (IFPI). Plus, according to a survey from the Indian Music Industry, a nonprofit with music labels as members, the digital piracy rate in India (73%) is well above the global average of 30%.
A report from analytics firm Redseer published in April noted that Spotify was the top player in terms of the number of streams in India. The study excluded YouTube, which has more than 450 million users in the country.
Spotify registered 220 million subscribers for the quarter ending in June, with 17% growth year-on-year. The company also raised its prices in the U.S. from $9.99 to $10.99 for the first time.