How Spotify is gearing up for a bigger India play

WHO IS THE MOST-FOLLOWED artist on Spotify? Take three guesses. Taylor Swift? Ed Sheeran? Drake? Nope. It is Arijit Singh, the badshah of Bollywood ballads, with more than 188 million followers. So, when Spotify’s global leadership told investors earlier this year that India could one day contribute more than 150 million paid subscribers, it wasn’t merely projecting another growth target. It was making a statement about how dramatically India’s music economy has changed. For years, India represented a paradox for every global music company. It was one of the world’s largest music-consuming nations, but among its least monetised. That equation is finally beginning to change. Spotify entered India seven years ago, the 10th player in an intensely competitive market. And, in FY25 — according to Tracxn data — it reported its first full-year profit in the country: revenue of ₹527.3 crore, a 50% jump year-on-year, alongside net profit of ₹74.6 crore, from a loss of ₹143.4 crore in FY24; Ebitda margins swung from -39% to 15.6%. The swing is a story of operating leverage: revenue jumped 50% even as overall costs declined, helped by an improving premium mix and a free tier tightened over time to accelerate paid conversions. For Spotify, India is emerging as one of its most strategic long-term bets. “We’re not here just to grow Spotify,” Amarjit Singh Batra, GM–SAMEA (South Asia, Middle East, Africa) and MD, Spotify India, tells Fortune India. “The job in India is to grow the music industry.” That explains why Spotify’s India strategy increasingly extends beyond subscriptions and playlists into artist development, regional music, AI-powered discovery, live experiences, and creator tools. The bet is simple: build a larger music ecosystem, and a bigger business follows for everyone. The prize is considerable. According to the latest FICCI-EY report, 96% of smartphone users in India now listen to music on their devices, digital platforms generated nearly 6 trillion music streams during 2025, and more than 230 million Indians stream music, making the country one of the world’s largest audio markets. Industry revenues are projected to rise from about ₹5,900 crore in 2025 to ₹7,500 crore by 2028. Breaking the free-music habit The transformation has unfolded over several years. After physical formats came the era of the MP3 — music in compressed digital format that could be transferred from, say a CD to your computer or digital audio player. The format was easy to download, shareable, and could be transferred easily, leading to piracy. The turning point came in 2016, when affordable 4G and cheap data were introduced in India, making streaming a reality, and putting paid to piracy. “The launch of 4G services in 2016 and subsequent widespread adoption of affordable data, coupled with deepening smartphone penetration, was a major turning point,” says Vibhor Gauba, associate partner at KPMG in India. Consumers no longer had to hunt for illegal downloads; millions could instantly access licensed catalogues through intuitive mobile apps. Chandrashekar Mantha, partner and media & entertainment sector leader at Deloitte India, identifies three structural changes that permanently shifted the market: dramatically lower mobile data costs, internet penetration approaching one billion users, and the rise of affordable freemium streaming platforms that made legal listening more convenient than piracy. Ashish Pherwani, media & entertainment sector leader at EY India, believes India has entered an entirely new phase. “The key change in India is that audio streaming platforms are now the primary source of consuming music,” he says. “And the subscription business, stagnant for several years, has started to grow.” A recent EY-IMI report estimates India’s paid music subscriber base could grow from 14 million in 2025 to 28–30 million by 2028. That matters. India has historically been an advertising-led market; most users consumed music free, leaving platforms dependent on ad revenues, and paid subscriptions remained elusive. When Spotify entered India in 2019, convincing consumers to pay for music seemed almost impossible. Today, Batra says, changing user behaviour, not just adding listeners, is the company’s biggest achievement. “As discovery improves, engagement grows and people spend more time on the platform, more users are moving to paid streaming. That’s good not only for Spotify but for the entire industry because it brings more revenue back into the music ecosystem.” From 10th to trendsetter Spotify did not arrive in India with the largest catalogue or the biggest telecom partner. By the time it launched in February 2019, the market was crowded. Seven years later, it believes it has rewritten the rules of the game — not by selling music, but by changing how Indians discover it. Batra says Spotify has been focussed on three things. The first one has been helping artists succeed. “Second, improving the listener experience by bringing world-class discovery and personalisation to India. Third, helping brands become part of consumers’ music journeys.” Unlike traditional music services, Spotify doesn’t see itself as just a streaming platform. It is increasingly a recommendation engine powered by data, algorithms, and artificial intelligence. In the pre-streaming era, discovery depended on radio stations, TV channels, or film releases. Today, millions of listeners begin their musical journey on Spotify with algo-generated playlists Discover Weekly, Daylist, Song Radio, Mixes, AI DJ and, more recently, AI Playlist. Spotify’s latest India campaigns have focussed almost entirely on discovery rather than catalogue size. Investor presentations reinforce that strategy: Spotify wants to become what co-CEO Gustav Söderström calls “the media player for the generative era”, where listening experiences are shaped dynamically around an individual’s taste, context, and intent through what the company calls its Large Taste Model. That philosophy resonates strongly in India, where listeners move fluidly across languages, moods, and genres in a single day. “Indians used to think in terms of songs,” Batra says. “Now they increasingly think in terms of playlists.” The behavioural shift may appear subtle, but commercially it changes everything. If users rely on Spotify to discover music rather than merely playing familiar tracks, switching platforms becomes significantly harder, say experts. Discovery increases engagement, engagement encourages subscriptions, and subscriptions create a more sustainable revenue pool for artists and rights holders. Another aspect of the transformation is Bollywood’s declining dominance. Hindi music’s share of streams has fallen from 64% in 2024 to 59% in 2025 — according to the FICCI-EY 2026 report — while film music has declined even faster. Rather than pushing blockbuster soundtracks, recommendation engines increasingly surface Punjabi hip-hop, Tamil independent artists, Telugu pop, Malayalam indie bands, Bhojpuri folk and devotional music alongside mainstream Bollywood playlists. More than 90% of tracks on Spotify India’s Daily Top 50 in 2024 came from Indian artists, while royalties from Hindi, Punjabi, Tamil and Telugu music have each more than doubled since 2021, it says. For Spotify, regionalisation is not just a localisation strategy; it’s a global growth engine. Nearly half the royalties earned by Indian artists on Spotify now come from overseas listeners; international streams of Indian artists have surged more than 20-fold since it entered India, and Indian artists were discovered 11.2 billion times by first-time listeners in 2024. Its biggest competitive advantage may be the ecosystem it has built around artists. Its programmes RADAR, Fresh Finds, EQUAL, Spotify for Artists, editorial playlists have transformed how musicians launch careers, analyse audiences, and build global fan bases. More than 28,000 Indian musicians now actively use Spotify for Artists, the company says. For singer Asees Kaur, those tools proved particularly valuable during the release of her independent EP Broken. “Spotify’s playlists and artist-first approach helped the songs reach the right listeners,” she says. Singer Darshan Raval believes Spotify’s combination of data and creativity differentiates it from traditional platforms. Punjabi singer-songwriter Arjan Dhillon describes Spotify as “an international playground for artists” that helps expand fan bases well beyond India’s borders. As Batra puts it, Spotify’s role is becoming part talent scout, part marketing partner, and part global export engine. The monetisation puzzle If Spotify’s first seven years in India were about building habits, the next seven will be about changing them: persuading millions to pay for something they have consumed free for decades. “India has already built one of the world’s largest music consumption markets,” says Devraj Sanyal, chairman and CEO, Universal Music Group India and South Asia. “What excites me now is the opportunity to convert that engagement into greater economic value.” Advertising, he argues, played an essential role in building India’s streaming ecosystem but long-term sustainability requires recurring subscription revenue. Rather than viewing India’s low monetisation as a weakness, Sanyal sees it as one of the industry’s biggest opportunities. Spotify’s numbers explain the optimism. At its May 2026 Investor Day, the company said its India subscriber base had grown sevenfold since 2022, while fewer than 10% of its Indian users pay for Premium — a gap it frames as headroom rather than weakness. Converting that opportunity has required Spotify to rethink its pricing strategy. Earlier this year, it simplified its premium offering, discontinuing Premium Lite, and introducing a revised portfolio: Premium Standard, at ₹139 a month; Premium Platinum at ₹299; and a Student plan at ₹69. It has made UPI central to its subscription journey, with more than 90% of new subscriptions in India coming through this payments platform. And its June 2026 partnership with Vodafone Idea, Spotify’s first Indian telecom deal, reflects another important shift. Spotify now sees telecom companies as subscription accelerators: the agreement bundles Premium access with eligible post-paid plans before gradually transitioning customers to paid monthly subscriptions, opening a funnel into Vi’s nearly 192.8 million subscribers. “All pricing models are in play,” says Pherwani. “Discounting for longer periods, limited-time offers, telecom bundling, e-commerce bundles, freemium and premium. Paid streaming is still in its infancy in India, and we can expect a lot more innovation.” None of which means advertising is going away. India is likely to remain a hybrid market for years, say experts. “India is a dual-market ecosystem; Tier I is steadily moving towards subscriptions, while Tier II and Tier III markets remain firmly ad-led,” says a Zee Music spokesperson. For YouTube, advertising remains one half of what it calls its “twin-engine” business model. According to Oxford Economics research cited by it, 92% of Indian music firms with YouTube channels consider it an important source of revenue, while 82% say it helps them reach audiences across the world. India’s swing to profit also mirrors Spotify’s global arc. In 2025, the Swedish firm’s revenue rose to €17.19 billion from €15.67 billion, while net income nearly doubled to €2.21 billion from €1.14 billion a year earlier after a €532 million loss in 2023. India, long a cost centre, is now on the right side of that ledger. Betting on the AI era If subscriptions define Spotify’s present, AI is shaping its future. For much of the streaming era, platforms competed on catalogue size. Now, the competitive advantage has shifted from what users can hear to how they discover it. At its Investor Day, Söderström introduced the Large Taste Model, an AI system trained not simply on language but on listening behaviour, enabling recommendations that adapt continuously to an individual’s preferences, context, and intent. “We’re entering the era of generation,” he said. “The experience isn’t just selected from a catalogue. It’s shaped by each user in real time.” The company has introduced AI DJ and AI Playlist, and on July 14, rolled out a conversational AI assistant in beta that lets Premium users discover music, podcasts, and audiobooks through voice or text; it is currently live in the U.S., Ireland and Sweden. An integration with ChatGPT, launched in late 2025, enables playlist generation directly through OpenAI’s platform across 145 countries. For platforms, AI promises more than better recommendations — it could redefine fan engagement itself. In the U.S., Spotify has rolled out Reserved, which gives an artist’s most dedicated listeners early access to concert tickets; it is also working with Universal Music Group to enable fans to legally create remixes and covers through paid tools that compensate original artists and songwriters. Streaming companies want to become the operating systems of the creator economy. Co-CEO Alex Norström describes the ambition succinctly: Spotify wants to become “a trusted companion across more moments in people’s lives”. The economics of being an artist are also changing. Earlier, success depended on securing a film project or a record label contract; streaming has flattened that hierarchy. “The rise of independent artists is moving to the performer generation,” says Pherwani. “Expect to see more branded content, in-music branding, social media content, and concert revenues if this ecosystem scales.” Rohit Dalmia, chairman and MD of entertainment financing channel CineNow, says the Indian market has moved beyond user acquisition into an era where music is increasingly viewed as monetisable intellectual property rather than merely promotional content. Can Spotify win in India? “The job in India is not just to grow Spotify,” says Batra. “The job is to grow the music industry.”

How Spotify is gearing up for a bigger India play

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