MUMBAI: Spotify, a music-streaming platform that was recently launched in India claimed that there will be ‘some’ challenges in scaling its ad revenue in India and in Asia. The platform is competing with established players such as Apple Music, YouTube Music, Gaana, JioSaavn and among others and it garnered two million users since its launch.

In Q1 2019’s earning call, Spotify’s revenue stood at around $1.7 billion, growing by 33 per cent year-on-year and claimed 217 million users globally in the earnings call that went up from 207 million at the end of last year. The company’s CFO Barry McCarthy said, “In keeping pace with the growth from a revenue perspective, those markets just simply don’t have as developed an ad market as we have here in the US.”

The transcription of the call mentioned that the platform’s reach in India and other markets will be relatively small initially until it has a critical mass and has “reached the attractiveness of the platform to advertisers as relentlessly true in the United States as well,” said McCarthy.

In terms of the average revenue per user (ARPU), Spotify reported that it observed a downfall by 2 per cent to $5.27 even as it expected the fall in ARPU for the rest of the year to be in the low single digits. It said that 75 per cent of the hit on ARPU is due to changes in product mix while the rest is because of changes in geographic mix and other factors.

In India the price points are significantly lower than the US, Spotify claimed, “If on day one we had zero and day two we had lots, the day two average company ARPU will be lower than it was on day zero,” said McCarthy.