Spotify looks to break into Africa through Vodacom deal

Spotify is already active in 56 markets, but has to stay ahead of the competition

Technology trends and news by Steven Loeb
June 2, 2014
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Spotify is the second biggest player in the music streaming space, behind only Pandora, with 40 million active users, of which 10 million are paid subscribers. In all, it is now active in 56 countries, including in Asia and Latin America, around the globe. There has been one region, however, that Spotify has yet to crack, and it one with a whole lot of potential users: Africa.

Now the company is said to be in talks to break into the region, potentially partnering up with South African telecommunications company Vodafone Group, it was reported by Bloomberg on Monday. The partnership would work by Vodacom giving its customers subscriptions that would allow them free data in order to access the Spotify library. 

There is huge upside to breaking to Africa; after all, it is the home over one billion people, with over 51 million in South Africa alone. Vodacom, which is a unit of Vodafone Group, already has a customer base of 31.5 million people in the country, giving Spotify an immediate opportunity to reach the majority of the population.

And for Vodacom, a deal with Spotify would put it at the forefront of the burgeoning music stream space on the continent. A total of 90 million rand ($8.4 million) was spent on digital music in South Africa in 2012, roughly 7.3% of the country’s recorded-music market. That number will be at 14% in 2017.

As Bloomberg pointed out, there is a rash of African telecommunication companies looking to strike these kinds of content-sharing deals. That includes MTN Group, Africa’s biggest wireless operator, which is in discussions with an TV-content provided, and fixed-line carrier Telkom SA SOC, which has been in talks with companies including Netflix and Comcast in regards to them using its network to deliver content.

As for Spotify, the company has also been aggressive in its expansion over the past year as well. Last year, the company made its first moves into Asia by launching in three countries on the continent: Hong Kong, Malaysia, and Singapore. It also launched in five other countries at the same time: Mexico, Estonia, Latvia, Lithuania, and Iceland. Spotify also launched services in Taiwan, Greece, Argentina and Turkey.

That expansion is due, in no small part, to the amount of competition out there, especially now that Apple has purchased Beats. Gaining a global audience, with members from all corners of the world, will certainly help Spotify remain the most viable company is a increasingly crowded market.

A spokesperson from Spotify had no comment on this report. VatorNews also reached out to Vodafone, and we will update the story if we learn more.

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