Spotify: Free access to 'stamp out' Asia's music piracy

Music streaming service launches in Singapore, Malaysia and Hong Kong, and is betting legally-free music will subsequently compel users to pay for content and eradicate music piracy in the region.
Written by Ellyne Phneah, Contributor

SINGAPORE--Spotify on Tuesday officially made its debut in Asia when it launched its music streaming service in three markets, namely Singapore, Malaysia and Hong Kong. It hopes its approach of giving consumers free, legal access to music will, counter-intuitively, entice them to eventually pay for its premium service and help "stamp out" piracy in the region.

Sriram Krishnan, head of new markets for Asia-Pacific at Spotify, said during the launch event here Tuesday the three markets were chosen to be "stepping stones" for the Swedish service provider to make headway in Asia. The high smartphone penetration rate and prominence of the local independent music scenes in the three markets were reasons why the company picked these markets, he added.

The popularity of social networking site Facebook in these markets also plays in its favor, Krishnan noted. This is because Facebook is integrated with Spotify, and allows subscribers of the former to sign up and log in on the latter's service, he said.

The executive also told ZDNet Asia at the event sidelines the company is confident it can eradicate music piracy, which is big in Asia and is Spotify's "biggest competitor" in the region.

He noted for consumers, engaging in music piracy is time consuming and risky since they have to spend a lot of time downloading the content and could inadvertently download malware or other computer viruses into their computers.

"It all boils down to getting content free and being given access. So if a service can offer both, it will be compelling enough to stamp out piracy in the region," Krishnan said.

Spotify today offers two services to consumers--one which gives them free access to music streaming on their PCs and laptops and is ad-supported, and the other is its premium service whereby users are able to access their downloaded music or streaming service on their mobile devices in addition to PCs. The premium service will cost a monthly fee of S$9.90 (US$8), RM$14.40 (US$4.74) and HK$48 (US$6.18) in Singapore, Malaysia and Hong Kong, respectively.

Asked why the monthly fee is not consistent, Krishnan said Spotify analyzed the different markets and identified these as the pricing "sweet spots" which will entice consumers to part with their money.

He was also confident users in the three markets will eventually pay for the premium service because consumers today want access to their content any time and anywhere. As soon as they are "hooked" on Spotify's service, they will pay for the service across all device platforms, he explained.

"It is an irony, but providing free music is the only way to get people to pay," Krishnan said. "Free music is always associated with piracy, but if that is revolutionized with people having access to free music legally, people will want to end up with the [latter option]."

Going forward, the streaming service provider hopes to improve the user experience by forging partnerships with other ecosystem partners such as radio companies, telcos and music labels in the region to give customers greater choice and availability in terms of music selection, the executive said. He declined to reveal the names of these partners though.

Krishnan did not comment when asked on its targeted number of subscribers too, but said Spotify had 24 million active users globally, of which 6 million were paying users. It also has partnerships with more than 3,000 music labels worldwide, he noted.

He also did not say which other Asian markets the company will expand to in the future.

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