What Spotify has learned since launching in Asia

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Spotify Asia MD Sunita Kaur.
Spotify Asia MD Sunita Kaur.

Digital music streaming services are going into overdrive to win over the ears (and dollars) of music fans around the world. But regional peculiarities, like a lack of credit cards, pose challenges.

SINGAPORE — The battle of the music streaming services is on. From Spotify to Pandora to Rdio to Jay Z’s Tidal, and now Apple Music, digital streaming services are going head-to-head in the bid to win consumer ears.

Despite the latest wave of new services emerging, Spotify, the most established of the companies in the space, is showing no signs of slowing down.

Shortly after Apple announced its own foray into music steaming, Spotify — a so-called tech "unicorn" (a company that has boosted to a $1 billion valuation or more, based on fundraising) — revealed a massive new round of funding reported to be worth around $560 million.

Boosting the Swedish company’s valuation to a reported $8.53 billion, this latest round of funding has added weight to the argument that a two-horse race between Spotify and Apple is likely to emerge.

While the impact of Apple’s new offering is yet to be seen, Spotify is continuing to quietly establish itself in Asia.

Spotify arrived in the region in 2013 and began building its footprint, launching in Singapore, Malaysia and Hong Kong before expanding to Taiwan and Philippines in April last year. Spotify’s latest figures state that the service has over 20 million paying subscribers and over 75 million active users.

"We want to be everywhere and there is a strong demand for Spotify everywhere," said Sunita Kaur, managing director for Asia, discussing the company’s expansion strategy at Spotify’s Singapore office. 

"But we're very careful about markets that we launch in. What really leads the charge into a market is licensing. We tend not to launch in a market until we have a very robust local music catalogue because want to make sure that we've got very, very strong local music content."

One of the biggest lessons for Spotify in Asia has been around the payment habits among consumer, where owning a credit card may not be as common as in other developed markets. It was a learning experience that really came about when the company started to build its footprint in Asia and Latin America, said Kaur. As a result, Spotify has leaned heavily on partnering with telcos.

"Our telco partners in Asia are an incredibly large part of what we do.  For example, in the Philippines we partner with Globe and what that enables us to do is have more people access our service, because at the moment credit cards, in most places in the world, are the only way to subscribe to Spotify. But in the Philippines you can bundle it with your telco bill."

"Now we're actually looking at other payment options," she said. "Like in Singapore we introduced NETS, so now you can debit your Spotify premium service. We're also starting to look at other things like bank transfers. There are so many amazing payment options out here, we've just got to make sure we find the right one for us."

Another key to Spotify’s expansion in the region has been through Facebook, which offers "the most powerful form of marketing" for the brand. Spotify is coded into Facebook and so users can login via the social networking site and allows users to sharing music on the platform. In a region with significant Facebook users, it’s also one less password for consumers to remember.

"We're seeing the Facebook log-ins that range between 60 and 70 per cent of our Spotify users. It's high in Asia," said Kaur.

In April this year, the company began rolling out its video advertising products in Singapore, off the back of the growing demand for video in the market. Among them is "sponsored sessions" which offers subscribers 30 minites of Spotify premium in exchange for a video view.

"Our stable of offerings has been really about owning the ears and the eyes," said Kaur. "We've got all of our display and banner ads available on Spotify and then we have our audio ads, but we're mature enough now to be able to launch video ads." 

At the time of the interview, Spotify’s video ad products in Asia were still in their early stages, but Kaur said it would be a big focus for the company moving forward.

"Video is really number one for the next 12 months. Singapore being a test country, we then want to get it out to more countries. So, that's a priority."

One thing that has surprised Kaur is the range of brands that have looked to partner and advertise with Spotify in Asia.

"We have such an eclectic mix of brands on Spotify and when we started, we thought, ‘oh, we're very consumer-related and automotive,’ but what we've started to see is businesses such as financial institutions, too.

"In Hong Kong we had FWD Insurance come on board with us. Insurance? They won three awards at Mobex for their innovation on Spotify.  So, what we're actually seeing is, yes, you can apply digital and music to any brand out there and do it in very creative ways. So, that makes us excited."

This article first appeared on campaignasia.com.


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