India loves online music
It looks like India will provide more of a lesson than revenue for Spotify (SPOT) in the company’s early months in the country. Spotify launched its music streaming service in India in February, a year after Amazon (AMZN). India presents huge growth potential for digital music services. According to Deloitte, India had 27 million online music consumers in 2015, and that number is forecast to top 270 million by 2020.
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Spotify battling lawsuits despite a strong start
India has delivered a mixed bag for Spotify so far. Spotify gained 1.0 million listeners in its first week in India, and had reached 2.0 million subscribers in the country by the end of March. At an investor briefing last month, the company reported that its growth in India had exceeded its initial expectations.
However, Spotify has been sued by several large record labels in India over content licensing. Last month, India’s oldest music label, Saregama, convinced a high court judge to order Spotify to remove its songs from its platform. Pulling Saregama’s 120,000 songs from its services could deprive Spotify of the critical content it needs to win over subscribers in India.
Warner Music Group, another major music label in India, sued Spotify following song licensing disagreements. A judge is expected to rule on the case next month, Billboard reports.
Spotify boasts a $1.9 billion cash reserve
Spotify, which is planning to spend as much as $500 million to grow its podcast business this year as it seeks to diversify outside music, exited the first quarter with $1.9 billion in cash. Pandora parent Sirius XM (SIRI) had $62 million in cash at the end of the first quarter, and Amazon and Google parent Alphabet (GOOGL) exited the first quarter with $23.5 billion and $113.5 billion in cash, respectively. Google runs a music streaming businesses in India. Tencent Music (TME) closed 2018 with $2.5 billion in cash.