Warner Chappell, a publishing firm under Warner Music, originally filed an injunction in the Bombay High Court days before Spotify was set to launch in one of world's largest entertainment markets. To attract Indian listeners, Spotify had introduced a premium tier priced at just $1.40 a month .
Warner, however, likely refused to accept the lower payout that would result from a lower montly subscription fee, resulting in the subsequent legal battle. That Spotify was able to strike a licensing deal with Warner suggests it made sufficient concessions to overcome the previous barriers. India's massive entertainment market — and a recent court precedent — likely motivated Spotify to compromise. Spotify may have felt compelled to settle the situation out of court given that the presiding judge ruled in favor of the music label in a recent court case: In May last year ruled in favor of Indian record label Tips Industries, who filed a claim against local streaming service Wynk Music for using its music without an agreement.
Moreover, India's huge and quickly growing market likely presents an opportunity Spotify likely couldn't afford to wait on any longer — in 2017 about consumers in India were using music streaming services, up from only 76 million in 2016, according to Midia Research figures cited by the Financial Times.
At a bare minimum, Spotify needed to match its competitors' music catalogs in order to compete, hence the deal with Warner, which brings a number of notable artists back to the platform, including Ed Sheeran and Coldplay. The deal won't guarantee success for Spotify, but it will allow it to compete on a more level playing field. Join thousands of top companies worldwide who trust Business Insider Intelligence for their competitive research needs.
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