Why did top Bollywood songs disappear from Spotify?

Today’s Finshots explores the larger implications of the showdown between Spotify India and Zee Music.

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If you’re not using Spotify to play your music, you might be missing something big. A few days ago, a ton of Bollywood songs disappeared from music streaming services. If I had scratched my head a bit to solve the mystery, I would have seen a common link. All of these missing songs were part of Zee Music’s catalog.

reason?

Spotify and Zee Music couldn’t come to a conclusion about how much all the music is worth. The license agreement ended in failure. Also, people using Spotify are outraged because 12 of his top 200 songs in India became unplayable.

Before we get to the point, we need to simplify how the music industry works today.

So there are artists who harness all their creative energies to create the songs we love. But for artists’ songs to reach people like us, they usually go through middlemen. This is a huge record label like Sony Music or Universal Music Group. They are the ones with the clout and following of massive distribution. They sign artists up and promise to promote their music. The label practically owns the music. In return, the artist receives royalties on the music whenever someone buys the track.

For a long time it worked. But one day in 2008, a Swedish company called Spotify took action. They told these music labels that people were simply pirated or illegally downloading songs. They only wanted certain songs. And piracy meant everyone lost money.

So the Spotify pitch was simple. They license a catalog of music owned by the label. And they make it available for people like you and me to play it on demand. No more piracy because Spotify gives you music for free. They advertise and make money. Or charge a subscription fee. Some of it goes to music labels and goes to artists as well.

Music labels were cautious at first, but eventually turned around. This is a good thing, as over 60% of his earnings come from these streaming services.

So if music labels are in a position to make a lot of money from Spotify, you have to wonder why Zee Music cut ties with Spotify, right?

In a word, leverage.

As you know, unlike Spotify-dominated Western countries, that is not the case in India. It was in his 2019 that Spotify entered. For example, according to JioSaavn, he has over 100 million monthly active users. And Reliance Jio’s large telecom user base made the impact even greater. There is also Gaana*, owned by Times Internet, which he claims surpassed 185 million MAU (Monthy Active Users) in 2020 itself.

But more important is YouTube. This app is basically preloaded on millions of his android phones that the Indian uses. And it’s an app that the majority of Indians are likely to use for fixing their music.

Why?

Remember that Indian songs are inherently related to movies. Songs and dances are Indian in nature. And video is such a big part of the experience.Think super popular Naatu Naatu. It wasn’t just the music that got people hooked, it was also the accompanying dance choreography.

Spotify can’t really recreate that feeling in its audio app, can it?

Surveyed last year by the Indian Music Industry (IMI), 58% of people said they prefer to stream music on YouTube. The 2019 survey also made me keenly aware of this point. If someone listens to her songs for 100 minutes, they watch the video for 28 minutes. Globally, that number was just 19 minutes.

As a result, Zee Music has nearly 94 million YouTube subscribers. The T-series also has about 240 million subscribers. That’s right, the T-series channel actually has the most YouTube subscribers in the world.

And with its digital revenue streams well diversified, it’s very easy for a company like Zee Music to power on Spotify. It is easy to say that perhaps the Rs 200-300 crore that we get every year is not enough. And if you want to realize your grand ambitions in India, tell the Swedish company to put in more money.

But getting exorbitantly priced deals may be only half the battle for Spotify in India. The big question is how Spotify will actually make money.

Because Indians still like to get their music for free. They would rather pirate it than pay for it.In fact, nearly 7 of his 10 Indian music “lovers” still download music illegally. For context, only her 30% of the world’s music audience indulge in such acts.

Indeed, Spotify is doing everything it can to lure Indians onto the streaming giant’s net. There is a special mini plan for India — something like ‘Using UPI he pays only £7 a day’. We want people to look at the vast catalog of music, opt for cheap daily plans, and ignore piracy. But it’s not easy.

Spotify knows this and wants to double down on advertising in India. According to the Economic Times, India’s subscription and advertising revenue mix is ​​50:50. Meanwhile, 90% of global revenue comes from paying subscribers.

So it’s advertising.

But even this is not an easy market for audio streaming companies. Also, if you’re on Spotify’s free tier like I am, you may have noticed that most of the ads seem to come from Spotify itself. Premium for promoting his subscription.

So where are the real advertisers?

Now, as one article on The Ken said,

The question is not whether ad dollars should be spent on Spotify or JioSaavn or Gaana, but whether they should be spent on digital audio in the first place,” said the marketing executive.

After all, Alphabet and Meta offer a compelling combination of consumer data, massive scale, and sharp targeting to advertisers.

Fundamentally, advertisers are still new to the idea of ​​showing their products on audio streaming services. This is a shame for Spotify.

After all, Spotify needs to grow its free user base significantly in order to truly survive and thrive in India. Or convince Indians that it’s okay to pay for music. Nor can it be without his catalog for one of India’s biggest music labels.

Well, Spotify probably needs Zee Music more than Zee Music needs Spotify right now.

Until then…

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*Zee Music has severed ties with Gaana in 2022 as well. It definitely seems like music labels are showing everyone who’s boss.

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