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September 19, 2020

YouTube Music outpaces Spotify and local rivals in India

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YouTube has signed up over 800,000 subscribers for its paid services in India since debuting in March, according to people familiar with the matter, vaulting it past competitors in one of the world’s fastest-growing media markets.

The services are growing faster than rival paid music offerings in India, including Spotify and local players Gaana and Jio Saavn, according to the people, who asked not to be identified because the subscriber data hasn’t been released. The one paid service that could have more users than YouTube is Apple Music, which has been tight-lipped about its subscriber figures.

YouTube has long struggled to gets users to pay for its services, especially since the company’s main website is synonymous with free videos. But the Google division has gained traction, and the numbers out of India suggest it’s having particular success in the world’s second-most-populous country.

YouTube sells two paid services in India:

YouTube Music Premium and YouTube Premium. The music service offers a library of songs on-demand, much like Spotify, and the ability to download tracks, listen to music without ads and play tunes while using other apps. YouTube Premium offers the traditional YouTube video service without ads— and the ability to play clips offline. But music is the driving force behind YouTube’s appeal, especially in India.

The country has emerged as a battleground for online music services, which are eager to sign up users in a country with over 1.3 billion people. Unlike China, the government where online media controls services tightly, India offers a similarly massive population without the same level of regulation.

Western companies such as Apple Music, Spotify and YouTube compete with local services, and will soon contend with Resso, a platform from Chinese tech giant Byte Dance.

Byte Dance is testing Resso in India and Indonesia before rolling out a paid version of the app next year. Byte Dance’s short-form video app Tik Tok has over 200 million users in India, enough to be a real challenger to YouTube and Instagram.

Major Presence

But YouTube already has a big presence in India, giving it an edge as it tries to get subscribers to pay fees. Over  265 million people use the free YouTube service in the country, making it YouTube’s largest market. India is also home to the channel with the most subscribers, T-Series, the country’s largest record label. Google has plowed resources into India in its bid to find new internet users and markets.

The growth is also notable because India isn’t typically hospitable to paid services. The country is one of the poorer major economies, making its average citizen very sensitive to price. The leading free music services, Gaana and Jio Saavn, have tens of millions of users, but few paying subscribers.

Representatives for Gaana and Jio Saavn didn’t immediately respond to emails seeking comment.

Netflix Inc., the world’s most popular paid online video service, has had to cut its price to compete in the country. It introduced a cheaper, mobile-only plan in India earlier this year and said this week it’s testing other pricing models.

YouTube has convinced people to pay by selling its service at a low price — less than $2 a month — and offering special features to subscribers. The other apps offer background listening for free.

Spotify has said that its Indian service has outperformed its expectations so far, though most of its growth has been from users of its free service.

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