Spotify finally reaches India despite a legal challenge from Warner Music Group

By Emmanuel Legrand

Spotify has finally launched Feb. 27 in India, amid a last minute legal challenge by Warner Music Group. The New York-listed music streaming service joins a crowded market with significant potential. The service will be available to Indian consumers through an advertising-supported free tier, and a monthly premium subscription of 119 rupees ($1.67) per month.

  Spotify will compete with international (Amazon Music, Apple Music, Google Play Music) and local players, in particular JioSaavn, the result of the merger of JioMusic from conglomerate Reliance Industries, operator of the Jio mobile network, and music start-up Saavn. Other local players include Gaana, backed by Times Media and China's Tencent, and Hungama, powered by entertainment giant Hungama Digital Media Entertainment and backed by Chinese internet services company Xiaomi.

  Spotify's subscription is in the same range as Apple Music's (Rs 120 per month) and Saavn for its Lite version (Rs 120)— Saavn charges Rs 250 for its pro version— while Google Play Music comes at Rs 99 per month. Amazon Music comes as a package with the Amazon Prime subscription of Rs 1000 per year.

 To match the country's language diversity, Spotify’s music recommendation engine is available in Hindi, Punjabi, Tamil and Telugu. “Spotify’s arrival in India is a big step forward in our overall global growth strategy. A fundamental piece of that strategy is staying connected to global culture while allowing room for local adaptation, and we’ve certainly achieved that with our India launch,” said Cecilia Qvist, Spotify’s Global Head of Markets.

Legal challenge

  Spotify's launch in India was marred with controversy over the terms of licensing between WMG and the streaming service. Although it had secured licenses with Universal Music Groupand Sony Music Entertainment, Spotify had not reached an agreement with WMG regarding the repertoire owned by its publishing division Warner Chappell. To bypass the lack of license, Spotify said it would use India's statutory license for broadcasters, claiming the rule applicable to broadcasters was also valid for online music services.

  Spotify said Warner “revoked a previously agreed-upon publishing license for reasons wholly unrelated to Spotify’s launch in India." The service added, "This statutory license, which allows for application to internet-based services, prevents WMG’s abusive practices, while ensuring all rights holders are compensated fairly. Under the statutory license, Spotify will pay WCM and their rights holders rates that are in-line with the rates Spotify agreed to pay the leading Indian music entities, ensuring everyone involved will benefit from the new audiences and significant revenue the Indian market will bring. We will continue to assess our options at this stage."

Injunction denied

  WMG said it was left without any other option than going to court. WMG asked the Mumbai High Court to grant an interim injunction to prevent Spotify from launching without the proper license in place, but it was denied by the court. However, the court also ordered Spotify to deposit Rs. 6.5 crore (about $915,500), pending the adjudication of the dispute, which will be heard on March 25.

  Bar and Bench reported that Spotify was also directed to keep a record of the use of Warner/Chappell’s works and all advertisement and subscription revenues.

  Warner welcomed the Court’s decision "to direct Spotify to deposit monies with the Court and to maintain complete records of any use of our music as well as all advertising and subscription revenue earned by Spotify. These are positive steps to protect our songwriters’ interests."