Spotify India announced revenues of Rs.16.12 Crores in FY ending March 2021. Spotify revenues are driven through subscriptions and advertising. According to the company income from subscriptions contributed about 65%~ Rs 9.75 crore ~ to the total revenue in FY20.
The India-based entity of Spotify has also churned Rs 6.37 crore from advertising. It was barely operational for a few months in FY19 and the company’s revenue stood at Rs 34.24 lakh. If we compare this with FY20, its revenue took a leap of 47X.
Global music streaming major Spotify forayed into the Indian market in February 2019 and has recently disclosed its financial performance for the first full fiscal year: FY20. The Indian entity of the Stockholm-based company has recorded Rs 16.12 crore in operating revenue during the financial year ending March 2020.
Spotify India records robust growth in FY 20
Spotify invested significant amount of money on marketing and branding, evidently visible from its expense pattern. It spent 88.24% of its total expenditure ~ Rs 159.69 crore on advertising and marketing in FY20.
Spotify India garnered 32 million downloads during FY20, per Sensor Tower data. This was 8.5X higher than its download numbers in FY19 when the company didn’t focus much on India.
Besides advertising and promotion costs, Spotify India spent Rs 12.44 crore on employee benefits. This is largely salary and other remuneration costs incurred on the local team. Compared to FY19 when the company spent Rs 6.42 crore on employee benefits, this cost jumped 1.8X in FY20.
Spotify India has recorded a total expenditure of Rs 172.58 crore in FY20. However, it’s not clear whether the expenses include payments to copyright holders and record labels.
Globally, Spotify provides this split separately but it is unclear if it’s the same in the Indian context as well.
Spotify India’s losses jumped 3.6X to Rs 156.46 crore in FY20 from Rs 44.25 crore during the previous fiscal. On a unit level, the company has spent Rs 9 to make one rupee in FY20.
Spotify India’s growth driver and competition
The company is likely to introduce its self-serve Ad Studio platform and podcast advertising technology called Streaming Ad Insertion (SAI) in India to ramp up existing revenue from advertising.
While the pandemic disrupted businesses across sectors, edtech, video and music streaming have witnessed a sharp rise in their usage and engagement. With the increased consumption, music streaming platforms are expected to show improved financials in FY21 and FY22.
The company reduced losses to Rs 327 crore in FY21 from Rs 352 crore in FY20. Apart from Gaana, Spotify competes with Jio-Saavn, Wynk, Hungama, among others.
Spotify said in a press release that it now has a total of 365 million monthly active users (MAUs), adding 11 million MAUs in the first quarter. It also has 165 million paid subscribers as of now, meeting the top end of the company’s guidance range. Spotify said it saw “meaningful contributions” from markets such as India, Mexico, Russia, and the US.