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Spotify streams into SA first... but has plans for Africa

Spotify streams into SA first... but has plans for Africa

Music streaming service Spotify has launched in South Africa offering a premium package for R59.99, and while representatives confirmed plans to launch in other regions of the continent, they were silent on exactly where or when this would happen.

Michael Krause, Managing Director for Europe Middle East and Africa at Spotify, made reference to an extension of the service's reach in Africa.

"In terms of other African countries we are always looking at the market for when is the right time in terms of catalogue, connectivity etc. Africa is a great continent and we are definitely looking to launch in more countries. Our product is mobile centric and this is why we chose to start our journey here."

Spotify allows users to browse, discover, curate playlists, build their own music collection and share music with friends from a catalogue of over 35 million songs all available to both free users and subscribers.

Claudius Boller, Managing Director for Middle East and Africa at Spotify says the choice of South Africa as the first country to engage was influenced by its developed music market, among other factors.

"Spotify is live in sixty five countries today and another three countries (Romania, Vietnam and Israel) will be launched today, alongside South Africa. Spotify takes its time to make sure everything is the right place on the local landscape, so we need to make sure that we have almost all the music content that the local music fans want in a country. We need to make sure that people can connect and consume music on a large scale. We believe strongly that now the time is absolutely right."

Boller adds that the International Federation of the Phonographic Industry (IFPI), which represents the interests of the recording industry worldwide, has ranked South Africa's music industry in 30th place based on its recording business, in 22nd spot for physical CDs, and 38th for digital music.

Talks with local MNOs

Boller also revealed that their study of the South African market ahead of the launch revealed that the cost of connectivity could pose a challenge to widespread access.

"We looked very deeply at the market in South Africa and data, in fact, is an issue. There are two ways around that and the first is that on the first tier if you sign up on Spotify, the default data saver mode is on 24 kilobit per second. That is much like radio quality for much less than what it would cost on a comparable music service. If you listen for one hour on Spotify in South Africa, it only consumes about 10.8 megabytes which is much lower... other services are on average more than 40 megabytes per hour. That is one way to overcome it. The other way is to sign up for Spotify premium where you can save all your music for the subscription fee and use less data."

He says Spotify is currently in talks with local mobile network operators with a view to establishing partnerships.

"Telco operators are a great driver for technology and connectivity in this country. Right now there is no bundle, as you might call it, with a telco operator - but we are in deep talks with the telecom operators at the moment to present offers in the market that help the music audience to connect faster, better and with less boundaries."

Manny Teixeira, Group Head of Digital Media and Services at ‎MTN who attended the launch said Spotify is a welcome addition to the services available here, although they will need to pay a lot of attention to tailoring their products for this market.

"From an MTN point of view we are glad they are here and it is something important and creates a bit of knowledge and education around music streaming services and what you can do on a mobile phone with data access. For us it's a positive thing. We encourage all global partners to not look just at South Africa because that is where most people go first, but to look at the continent as a whole. What they need to do when coming in is determine how this market is different because what they do in Europe and America doesn't work here. They need to understand what an African consumer is looking for and what the appropriate price points are."

Teixeira says MTN itself has gained experience on catering to the unique needs of African consumers and pricing is an important factor.

"The challenge with the traditional streaming service OTTs is that they are all premised on a monthly subscription amount and that does not really work in a lot of the African markets because people want to pay as you go, daily or even weekly. Of course we encourage the service to come in because the African society is as connected as any other in the world and they should experience the services that are available everywhere else in the world. I think Spotify just needs to be focused on tweaking their product for African needs.”"

Brands that include Ballantine's, FNB, Hunter's, MINI and Pepsi-Cola have partnered with the ad-supported free Spotify service for the South Africa local launch.

The service has launched with a 30-day free trial when signing up for Spotify Premium with a credit or debit card.

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