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Spotify Restricts Free Tier in India Aiming for Paid Growth

To attract more paying users in India, Spotify tightens features on its free tier, limiting song playback and controls. Will this move pay off or drive users to competitors?

Spotify Changes Free Tier in India for Paid Growth

Spotify's free tier in India is undergoing significant changes, as the Swedish streaming giant vies for a more lucrative share of the Indian market. Users on the free tier will now face restrictions such as the inability to manually select song order, rewind, scrub, or repeat tracks.

Since its introduction to the Indian market in 2019, Spotify has wooed its audience with a generous free tier. The rationale behind these new changes? Market maturation. Indeed, the revamped free tier is akin to Spotify's model in Brazil.

Although India boasts a significant chunk of Spotify's monthly active users, the nation doesn't mirror the same enthusiasm for paid subscriptions. This is largely attributed to the allure of the ad-supported model preferred by a majority of the Indian users.

Spotify's strategic response includes the introduction of the 'Smart Shuffle' feature, offering tailored song suggestions aligning with user preferences. Initially rolled out for paid subscribers in March, it has garnered favorable industry reviews and hopes to accelerate the shift towards a subscription-based model.

Yet, the lingering question remains – will these feature restrictions persuade Indian users to opt for paid subscriptions or simply propel them towards rival platforms?

Interestingly, the trend leans towards paid-only models. Gaana transitioned to this model last year, and ByteDance's Resso eliminated its free tier in multiple countries, including India. The aftermath? ByteDance's launch of TikTok Music in some of these markets.

However, challenges are rife for paid music subscriptions in India. Notably, the country doesn't feature in the top 10 global markets in terms of paid subscriptions. Moreover, the high digital piracy rate in India (73%) starkly overshadows the global average (30%).

Despite these challenges, an April report by Redseer highlighted Spotify as the dominant player in India in terms of streams, excluding YouTube. Spotify's global performance remains robust, marking a 17% YoY growth with 220 million subscribers by the end of June.

Time will tell whether Spotify's calculated gamble in the Indian market will yield the desired shift towards premium subscriptions.