Spotify’s advent in the highly fragmented and legacy label-dominated music market saw questions raised about its premium priced subscriptions and artist-led approach. Paid music subscribers in India were few in number and film music dominated most existing streaming platforms.
Six years on, the landscape looks a tad different. Gaana, which was once the market leader, appears to be losing ground—the company’s revenue in FY23, the latest year available on Tofler, declined over 45% to ₹64.9 crore. Apple Music, Amazon Music and YouTube Music are around but within a bouquet of offerings of their parent brands.
Currently, Spotify directly competes with YouTube Music, which has positioned itself as a leader in the visual music experience. The Swedish company has solidified its hold as the go-to app for active audio streaming. According to audience measurement company Comscore, it currently has 88 million monthly active users in India (as of January 2025).
According to another report, India Year in Review 2024: Setting Stage for 2025, released on 10 March by Comscore India, YouTube was still the country’s leader in digital streaming, with 411 million unique visitors across desktop and mobile platforms in December 2024. However, Spotify, with 91 million unique visitors, has seen a growth spurt. The audio streaming platform, according to the report, recorded 46% year-on-year growth in total hours users spent on it, rising from 237 million in December 2023 to 347 million in December 2024.
Globally, the company has more than 675 million users, including 263 million premium subscribers.
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Spotify made key bets to achieve this growth. The company focused on expanding its library of regional music and developing pricing strategies, such as flexible subscription models and freemium offerings, to suit India’s price sensitivities.
These bets have placed Spotify in a leading position in India’s streaming sector, but expansion alone does not guarantee sustainability. The real test is no different from what it was in 2019: turning an enormous user base into a profitable business.
A new era
Streaming has fundamentally changed India’s music landscape by making it easier than ever for audiences to discover and engage with new music.
In an attempt to replicate its global success, Spotify entered the Indian market with a long-term vision of habit formation by integrating music seamlessly into people’s daily routines. The platform followed a playlist-focused approach to fit into everyday moments like commuting, studying, or working out. This approach has helped establish Spotify as an active consumption service rather than just a background music service.
According to a recent Spotify report on Gen Z consumption patterns, young listeners turn to the platform not just for entertainment but also as a tool for mindfulness and focus. Many Gen Z users, who form a majority of India’s Spotify users, claim that Spotify helps them avoid doom scrolling, highlighting it as a digital wellness tool.
Kumar Taurani, managing director of TIPS Music Limited, says that one of the most notable shifts in music streaming has been the rise of independent and non-film artists, who now have the ability to launch their careers without relying on traditional film soundtracks.
“With digital streaming services, an artist with a compelling song can launch themselves independently through platforms like Instagram, YouTube and Spotify,” says Taurani. This shift has diversified the Indian music ecosystem by giving artists more opportunities to reach listeners.
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Taurani says that for music labels, platforms like Spotify and YouTube Music serve different but complementary roles. YouTube’s video-first approach ensures mass reach, while Spotify’s curated playlists and algorithm-driven discovery allow for deeper audience engagement. “While YouTube caters to a broader audience, Spotify’s specialization is beneficial for the music industry,” says Taurani, adding that the relationship between artists, labels and platforms like Spotify is symbiotic and interdependent for the growth of the ecosystem.
Steady growth
“India was our 79th market globally and our objective was to grow gradually and for the long term and make sure that we bring the best listening experience for Indian users,” says Amarjit Batra, managing director of Spotify India.
Rohit Bhatia, former CEO of Dhingana Music, a music streaming app that shut down in 2014, says that while Spotify’s deep pockets gave it a long runway and resilience to survive India’s challenging, fragmented music streaming market, an added advantage came from smart localization and efforts to build the artist ecosystem. Bhatia believes that these factors have helped the company build a strong position in a highly competitive market.
“Now, as the last person standing, Spotify is in a much stronger position to negotiate with legacy music labels—something that has traditionally been a challenge in the industry,” he adds.
But the fundamental monetization challenge persists.
Spotify’s average revenue per user (ARPU) is widely recognized to be much lower in emerging markets like India than in developed regions. Consequently, its per-stream payouts in India are also significantly lower than those in developed markets. This difference, along with challenges such as lower subscription prices and a prevalence of free users, makes it difficult for Spotify to replicate its success in Western markets here.
The subscription for Spotify in India starts from ₹29 for a week and goes up to ₹179 per month for family plans. Spotify Premium individual plans in Europe typically range from around €12 ( ₹1,138) to €16 ( ₹1,517) per month.
What Spotify has got right
Spotify’s early success in India can be attributed to its focus on understanding the cultural nuances of the market and helping users integrate music into their daily lives. The company recognized India’s linguistic and cultural diversity early on and tailored its content and marketing accordingly.
“We didn’t want to be just another streaming platform in India. Our focus was on shaping listening behaviour and making streaming a habit,” says Neha Ahuja, head of marketing at Spotify India.
Ahuja says that the company understood the diversity in the Indian market and focused on hyper-localization by curating playlists, recommendations and marketing campaigns that communicated with listeners in their own language.
“We prioritized regional languages, whether it was onboarding users in their preferred language, curating playlists in Tamil, Telugu and Punjabi, or launching city-specific campaigns to connect deeply with users across India,” Ahuja says.
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Through its focus on a regional music catalogue and local artists, the platform expanded its user base across both metro cities and smaller towns to help grow non-Bollywood music consumption.
Spotify’s flexible pricing strategy also helped. It introduced innovative subscription models such as daily and weekly premium plans, allowing users to ease into paid subscriptions without longer commitments. While these short-term plans helped drive the initial signups, the company now wants to focus on shifting users toward longer commitments.
“Our focus has been on monthly and longer plans,” says Batra. “The daily plans were about getting people accustomed to premium and we did see movement from day to week to month. But long-term, we need more users subscribing beyond short bursts.”
The company also built an ad-supported business, essential to revenue growth in the India market, from scratch. By investing in brand partnerships and educating advertisers on the value of audio ads, Spotify positioned itself as a sustainable player in a market where monetization remains an industry-wide challenge.
With growth in its premium subscriber base still slow, Spotify’s ad-supported model continues to remain a crucial revenue stream. The company’s revenue stream in India is currently split between premium subscription and advertising. For FY24, Spotify reported a gross turnover of ₹348.29 crore and a net loss of ₹143.35 crore, according to data from market research provider Tofler.
“Since premium subscription is a core business that we do globally, it continues to have larger focus and implications for the future. But from the India market perspective, both premium and advertising are equally important focus areas for us,” says Batra.
He also pointed out a growing willingness among brands to use audio advertising, a shift from earlier, when audio was treated as an experiment, often tried with leftover budgets. “Now, more than 600 brands have worked with us, and audio advertising is no longer an afterthought—it’s part of the media plan from the beginning,” he says.
According to Batra, brands have started committing to Spotify early in their planning cycles because they’ve seen the results over the past few years.
The company has also led various efforts to build and foster the local music community. “Before Spotify, artists had very little visibility into their audience—who was listening, where and how frequently. We wanted to change that,” says Batra.
Spotify, since its India launch, has built programmes to support emerging and mid-tier musicians by adapting global learnings to India’s unique market. The company launched initiatives such as “Fresh Finds” to provide editorial and promotional support for new artists, “Radar”, which offers a month-long promotional boost, along with offline efforts at building fandom. The platform also introduced a new category, Indian Popular Music (IPOP), to spotlight non-film music.
“For long-term sustainability, we need a strong base of emerging artists. That’s where the supply comes from and then we have a playbook to help them grow,” says Dhruvank Vaidya, head of music and podcasts at Spotify.
Vaidya adds that six years ago, nearly 70% of music consumption on Spotify in India came from international music. Today, more than 70% of music streams come from local music. In 2023, almost two-thirds of the royalties generated on Spotify in India were attributed to local musicians.
These efforts weren’t just about artist support; they were strategic. By creating an alternative music culture, Spotify could diversify India’s listening habits beyond Bollywood—ultimately strengthening its own catalogue and differentiation in the market.
Monetization woes
While Spotify has led efforts in building a sustainable ecosystem for music artists in India, the latter face a host of challenges. Apart from discoverability and outreach, performers struggle with challenges such as low streaming payouts, limited marketing resources and understanding, and the challenge of converting visibility into a sustainable source of income.
Despite Spotify’s efforts, streaming revenue remains negligible for many independent artists. While Aditi Sehgal, aka Dot, who was featured in “Fresh Finds” and “Radar” before landing a Bollywood playback role in Archies, or Akshath Acharya, who gained recognition with his hit single Naadaniya, have seen success, there are many small and mid-level musicians who struggle to earn a sustainable income from streaming alone.
The company does not pay artists or songwriters directly but instead pays royalties to labels, aggregators and publishers based on an artist’s share of total streams on the platform, a model known as ‘streamshare’.
According to various reports, Spotify artists in India earn approximately $0.0021 per stream. However, this number can largely vary because the payment structure is based on several factors, including the listener’s country, subscription type and the artist’s agreements with labels or distributors.
Independent artiste Chirag Todi points out that unless a performer is backed by a label with a large promotional budget, streaming earnings usually remain minimal. “For most, the real money still comes from live performances, not streaming,” adds Vasundhara Vee, a jazz and R&B singer.
Vaidya, who heads music and podcast at Spotify India, clarified that the company does not pay artists or songwriters directly but instead pays royalties to labels, aggregators and publishers based on an artist’s share of total streams on the platform, a model known as “streamshare.”
In 2024, Spotify paid out $10 billion to the music industry globally, while its total payouts since founding are at nearly $60 billion.
Spotify has managed to democratize music access, but breaking through the noise remains a large challenge for musicians. This gap between exposure and earnings is where many feel Spotify needs to do more.
While the company’s localization efforts have helped boost regional talent, industry experts believe that stronger links between editorial support and real-world opportunities could make a bigger impact.
Sidhantha Jain, co-founder of mcube, a music marketing company, also points out that audience behaviour is changing as younger listeners have become more willing to pay for digital experiences through subscriptions, merchandise or even exclusive content.
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The challenge for Spotify is to bridge this gap—whether through better monetization tools, direct artist-fan interactions, or stronger industry partnerships.
Vaidya says that Spotify sees direct artist-fan interactions as a crucial part of the future and the company is actively working on this through its Premium model, aiming to encourage fans to pay for music. However, many of these experiences are currently centered around popular artists.
Looking ahead
Spotify’s long-term success in India largely depends on its ability to shift user behavior toward paid subscriptions, while maintaining a growing advertising business. The company continues to double down its efforts in areas like user education, talent development and brand partnerships to drive this shift.
As India’s digital landscape matures, the company’s ability to adapt—whether through stronger ad partnerships, deeper artist engagement or richer listening experiences—will determine its long-term growth in the market.
Spotify is playing the long game, asserts Batra, adding that the key challenge is changing the perception of music consumption by valuing it more.
“For years, people have looked up to cricketers and Bollywood stars, but now, we’re seeing music artists emerge as role models, too. The more success stories we create, the more people will want to pursue and appreciate music,” he concluded.