Spotify Technology SA yesterday released a new version of its music streaming app for customers in emerging markets in an effort to grow outside of its strongholds in the US and Europe.
The Spotify Lite app, which runs on Android smartphones, would appeal to users who are limited by data plans and slower networks, especially in regions like Asia, the Middle East, Africa and Latin America, the company said in a statement.
The app was released in 36 markets and an ad-supported service would be available for free, while a premium version would cost the same as on its regular music-streaming platform.
The company is counting on Spotify Lite for a much-needed boost in markets with lots of potential.
The streaming service also needs to reassure investors about its growth prospects as it continues to lose money.
The shares are down 26 percent from their high a year ago.
“There’s much, much room for us to grow, both geographically and also product-wise,” Spotify global head of markets Cecilia Qvist told the Rise tech conference in Hong Kong. “Hopefully when we thrive, the ecosystem thrives.”
Spotify’s biggest challenge remains the royalties it pays for music rights, which eat up more than 60 percent of revenue and are a major source of its losses.
The company has agreed not to push for another cut in fees in its current of negotiations with the music industry.
That has prompted Spotify to seek other avenues for growth, such as podcasting.
However, podcasting is still a nascent business, with US$479.1 million in US revenue last year, according to the Interactive Advertising Bureau.
An estimated 62 million people in the US over the age of 12 listen to a podcast every week, according to a report by Edison Research and Triton Digital.
Spotify has asked investors to trust that the market for audio streaming is still in its early stages.
The company counts on North America and Europe for 65 percent of its users. Africa, Asia and the Middle East make up just 13 percent.
Spotify Lite would use of 10 megabytes of storage, compared with about 100 megabytes for the main app. It offers the same look and feel as the normal Spotify app, but with limitations to preserve data consumption. Users can also set a data limit within the app to ensure they never exceed it.
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