CommunicAsia2015, IV-Spotify: Let’s do it…legally

In the lead-up to CommunicAsia 2015, Summit speaker, Sunita Kaur, Managing Director, Asia, Spotify, shared how going mobile helped her company gain an edge and grow five times in Asia

Picture this: you are going on a long trip and will be spending at least two hours on the road. You begin downloading songs onto your mobile device and then a pop-up appears. “Memory full. Please manage your storage in Settings.”

Online entertainment is moving from downloading to streaming on both PC and mobile devices for various reasons. The convenience and ability to cherry-pick your favourite content is already a good draw, but the true irresistible power of such streaming services comes from freeing up on storage space. You no longer have to pay for songs, instead you pay for access to a vast library of songs – a number much larger than a single device could conceivably store.

Mobile-only Asians

Not only does Asia have high mobile penetration rate, it is in fact, a growing mobile-only market. That is, mobile is the only connected device for many Asians, and the desktop experience is completely skipped. In Singapore, for example, almost 70 percent of Spotify’s audience is between 18-34 years old, and over 70 percent are either a mobile-only or cross-platform user. With that, Spotify was launched in Asia with mobile as a priority, not as an afterthought or nice-to-have.

Since Spotify launched its mobile-free tier in the region in December 2013, mobile streams have gone up to as much as five times compared to the previous year. Looking at the numbers, the mobile-first strategy has also fuelled growth in Spotify’s user base, which subsequently bumped up premium subscriber numbers at an average conversion rate of about 20 %.

“We’re so committed to the ‘freemium’ model on mobile because we completely agree with the labels that subscribers are key to bringing the industry back to health — and we need the free 'funnel' to drive subscription. By bringing listeners into our free, ad-supported tier, we ‘migrate’ them away from piracy, which is rife in this part of the world.”

For Spotify, the other obvious advantage of going mobile is the ability to provide personalised recommendations to music fans. “We are constantly charting and looking at usage data to provide users with a more comprehensive experience. We recommend music depending on what you are already listening to and curate playlists that fit every activity – whether you’re at a party, driving to work or studying, we have playlists that are with you at each moment. For example, we partnered with The Music Run, and developed a digital tool that allows all music runners to listen, vote and share their favourite tracks,” added Kaur. 

The result of tailoring the streaming experience to individual needs is that users are spending an average of over 160 minutes listening, dancing or singing along to Spotify every day.

Going Beyond the Play Button

Spotify believes that their best marketer has, and always will be, their users. By first considering the demands of the consumers, words about Spotify spread and profits eventually followed in the form of subscriptions and advertisements. Sponsored Sessions give brands ownership of 30 minute ad-free mobile sessions. Users opt-in to an ad-free experience by viewing a 15 or 30 second video on their mobile device.

Kaur recalled what Daniel Ek, CEO and co-founder of Spotify, once said in an interview, “The reason I started Spotify was not because of my love of music. It was because I saw an opportunity to create something that made it easier for people to do the stuff that they were already doing, but legally.”

“That is precisely the advice I will give to any brands deliberating a mobile strategy. There is no cookie-cutter approach, so consider if your mobile strategy will add value to your consumers’ lifestyles. Learn to build for the user, go beyond mobile-first, and go user-first,” concluded Kaur.

---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Swedish giant Spotify has recently raised $526 million in funding, and is now valued at $8 billion+. It has more than 20 million subscribers who pay for its service, up 100% from last year, and more than 75 million active users in all. Spotify discouraged online music piracy by providing a low-cost alternative and that the service would, over time, generate substantial royalties for the music industry. In 2012 Spotify had 18 million songs and more than 20 million monthly active users, though not all were paying subscribers. Since starting its services, it has more than 25 billion hours under the hood.

---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Sunita Kaur has over 17 years’ experience in the industry, including print stints at Time Warner and Singapore Press Holdings (leading newspaper and magazine publishers in the country). Sunita was Associate Director, Singapore and International Accounts at Microsoft Advertising, forming part of the MSN and Hotmail team for South East Asia. In 2010, Sunita was appointed as Director, Asia at Facebook--a role she held for three years. When she is not busy wearing myriad hats, Sunita relaxes with a good cup of coffee and indulges in weekend sports with her husband, Jim, in Singapore where they call home. An early bird, Sunita is an avid yoga practitioner and slips in at least a 15-minute daily practice.

CommunicAsia2015, V: Huawei and the smart city reality