Spotify is missing in action in the key digital market of India. When it does show up, it will have to face down the country's richest man.
Reliance, the conglomerate run by billionaire Mukesh Ambani, announced last week that it was buying Saavn, one of India's top online music platforms. The companies said the business, when combined with Reliance's own JioMusic, would be worth over $1 billion.
"Our alignment with Reliance enables us to create one of the largest, fastest-growing, and most capable media platforms in the world," Saavn co-founder and CEO Rishi Malhotra said in a statement.
Spotify, which went public on Tuesday in New York, is not offered in India. But CEO Daniel Ek told investors last month that the company is "working on launching" in the country.
It's a crowded market with enormous potential.
Saavn and JioMusic are locked in a race with local players like Gaana.com and Wynk, a platform owned by Jio's main telecom competitor Bharti Airtel. Chinese tech giant Tencent (TCEHY), one of Spotify's investors, led a $115 million investment into Gaana.com in February.
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Sweden-based Spotify will also have to contend with other global competitors. Google Play Music (GOOG) and Amazon Prime Music (AMZN) have both launched in India within the past year, while Apple Music (AAPL) has been available in the country since 2015.
Spotify did not respond to requests for additional details on its India plans.
Global and local services are racing to become the go-to source of music for India's more than 300 million smartphone users. Hundreds of millions more Indians have yet to come online.
"India as a content consuming market is evolving very fast," Hanish Bhatia, a senior analyst at tech consultancy Counterpoint Research, told CNNMoney. "We still have a significant portion of the population which is yet to join the digital umbrella," he added.
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Backing from Ambani could give JioMusic an edge over its competitors.
Ambani, estimated by Forbes to be worth $39.4 billion, launched his new mobile network, Reliance Jio to great fanfare in September 2016 -- offering free 4G internet for the first six months and cheap data plans thereafter.
The disruptive launch triggered a price war in India's massive telecom market that drove many competitors out of business.
It also helped Jio build up a subscriber base of over 160 million people in less than two years, all of whom will soon have access to JioMusic and Saavn's combined library. Spotify (SPOT), by comparison, had 71 million global subscribers on its platform by the end of 2017.
Bhatia said Jio and other local players also hold an important key to capturing India's unconnected millions -- its dozens of regional languages.
"Success of [new] players will largely depend on how well they're able to create a smooth stream of regional content," he said. "In such a case, Reliance does have an upper hand."
