Why did top Bollywood songs disappear from Spotify?

 Why did top Bollywood songs disappear from Spotify?

The Story

If you don't use Spotify to play your music, you might've missed something big. A few days ago, a whole bunch of Bollywood songs disappeared from the music streaming service. And if you'd scratched your head a bit to solve the mystery. you would've seen a common link-all those missing songs were part of Zee Music's catalogue.

The Reason?

Spotify and Zee music couldn't come to a conclusion about how much money all that music was worth. The licensing deal fell through, And people who use Spotify are now left fuming because 12 out of the top 200 songs in India are now unpayable.

Now before we get into the meat of the story, we first need to simplify how the music industry work today.

So you have the artist who harnesses all their creative energy to create songs that we love. but for the artist's songs to reach people like us, it typically passes through a middleman, This is a gigantic record label like Sony Music or Universal music group. They're the ones with the massive distribution clout and followers. They sign up an artist and promise to promote their music. The label practically owns the music. And in return, the artists get a royalty on the music whenever someone buys the track.

For a long time, that's how it worked. But one day in 2008, a Swedish company called Spotify rolled around. They told these music labels that people were simply pirating songs or downloading them illegally. And that's because no one wanted to buy full albums. They wanted only specific songs. And pirating means that everyone was losing money.

So Spotify's pitch a simple. They'd license the catalogue of music owned by the labels. and they'd allow people like you and me to play it on demand. over the internet. No more pirating because Spotify would give the music for free. They'd run ads and make money. Or charge a subscription fee. And a cut of this would go to the music label and in turn, the artists too.

Even though music labels were circumspect at the start, they eventually came around. And it's a good thing they did because over 60% of their revenues now come from these streaming services.

So, if music labels stand to make so much money from Spotify, you have to wonder why Zee Music just cut ties with Spotify, right?

In one word- Leverages.

You see, unlike the western world where Spotify reigns supreme, that’s just not the case in India. Spotify only made its entry in 2019. And by then, others had taken the top spot. For instance, JioSaavn says that it has over 100 million monthly active users. And it has the added heft of Reliance Jio’s massive telecom user base behind it to become even bigger. There’s also Gaana* — owned by Times Internet — which claims to have crossed 185 million MAUs (Monthly Active Users) in 2020 itself.

But more importantly, there’s YouTube — an app that basically comes preloaded into millions of Android phones that Indians use. And that’s the app the majority of Indians are likely to use for their music fix.

Why’s that, you ask?

Well, don’t forget that songs in India are intrinsically linked to the movies. The song and dance is inherently Indian. And the video is very much a part of the experience. Just think of the uber-popular Naatu Naatu. It wasn’t just the music that hooked people but the dance choreography that accompanied it.

Spotify can’t really replicate that emotion on its audio app, can it?

And when the Indian Music Industry (IMI) ran the numbers last year, 58% of people said that they preferred streaming music on YouTube. A survey from 2019 kind of hammered home this point too. If someone spent 100 minutes listening to songs, 28 minutes would involve watching the video. Globally, that number was just 19 minutes.

The end result is that Zee Music has nearly 94 million subscribers on YouTube. And T-Series has about 240 million subscribers too. Yup, the T-Series channel actually has the most YouTube subscribers across the world.

And with its digital revenue streams nicely diversified, it’s pretty easy for someone like Zee Music to flex its muscles over Spotify. It could easily say that the ₹20–30 crores it probably gets each year isn’t enough. And tell the Swedish company to pony up more money if it wants to realize its grand ambitions in India.

But striking an exorbitantly priced deal could be just half the battle for Spotify in India. Because the big question is — how will Spotify really make money?

Because Indians still like getting their music for free. They’d rather pirate it than pay for it. In fact, nearly 7 out of 10 music ‘lovers’ in India still download music illegally. For context, only 30% of the global music audience indulge in such acts.

Sure, Spotify is doing all it can to lure Indians into the streaming giant’s net. It’s got special mini plans for India — The ‘pay only ₹7 a day using UPI’ kind. It’s hoping that people will see its catalogue of vast music, fall for the cheap daily plan and ignore piracy. But it’s not going to be easy.

And because Spotify knows this, it wants to double down on ads in India. They’ve seen the numbers — the revenue mix for subscriptions and advertising in India stands at 50:50 according to the Economic Times. On the other hand, 90% of global revenues are from paid subscribers.

So ads it is.

But even this isn’t an easy market to crack for audio streaming companies. And if you use the free tier of Spotify like me, you might have noticed that most of the ads seem to be from Spotify itself. To promote their premium subscriptions.

So, where are the real advertisers?

Basically, advertisers haven’t yet warmed up to the idea of displaying their wares on audio streaming services. And that’s a bummer for Spotify.

At the end of the day, for Spotify to really survive and thrive in India, it needs to massively increase its free user base. Or convince Indians that it’s okay to pay for music. And it can’t do either without the catalogue of one of India’s biggest music labels.

So yeah, Spotify probably needs Zee Music more than Zee Music needs Spotify right now.