Spotify talks Latin American success: ‘We’ve built a castle…’


Spotify has been talking about its growth in Latin America for a piece in the Financial Times, which suggests the company is preparing to invest more heavily in staff for the region. “Spotify became the dominant paid streaming service in Latin America with minimal effort; to this day a few dozen employees working out of a Miami WeWork office run the operation for the whole continent,” claimed the FT, quoting director of economics Will Page for Spotify’s view: “No one ever expected it, and we didn’t even have the resources for it. Chile is now one of our fastest-growing markets, and we’ve never even sent an employee there,” he said.

There’s a fun quote from an unnamed label executive in Mexico on the early deals that took Spotify in to that country: “At that point we were very happy getting $50,000 in a contract. So all of a sudden a company comes offering us $2m, and we had no experience [with Spotify] at the time, and we took the money.” The piece also cites figures from local research firm the Competitive Intelligence Unit, which claims Spotify had a 64.1% share of Mexico’s music-streaming market in 2016.

There’s also a quote from an internal Spotify document about how to build on its position in Latin America now: “We’ve built a castle, do we need a moat?” When considering the likely enemies who need to be repelled, YouTube looms large. It’s important to realise that all of this discussion focuses on paid audio streaming. As the story further down today’s bulletin on Midia Research’s latest figures makes clear, YouTube is the other titan of the Latin American streaming market: 68% of Mexican under-45s watch music videos on YouTube, outstripping even radio.

The FT article is mainly about Latin America, but it also offers an update on Spotify’s ambitions in India – as well as the ambitions of some labels to postpone its launch there. The piece claims that major labels “have still not given Spotify the green light to license their songs in the country” and quotes one label executive as saying “Now they’re a publicly traded company and they really need to grow. It’s our one big piece of leverage.”

Note, though: this leverage is over whether Spotify launches in India *with the major labels’ catalogues*. Given the importance of Indian music in India – both the traditional film-music sector and the emerging independent Indian artists – Spotify’s likely success there might be better judged by its ability to negotiate access to Indian music catalogues. And while local services like Gaana and JioSaavn will be important rivals in that respect, YouTube is also a formidable opponent in India, with 225 million monthly active users (as of March 2018 – it’ll be higher now) and the status as a global springboard for India’s biggest music brand, T-Series.

Stuart Dredge

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One response
  • Fix says:

    It is a really interesting time for music fans. With recording companies growing revenue and profit. We can expect newer generation artists to be promoted like crazy the way that Britney Spears, Backstreet Boys, Celine Dion was promoted in the late 90s.

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