Spotify (NYSE:SPOT) and Apple (NASDAQ:AAPL) Music are two of the biggest music streaming services in the United States, Europe, and beyond. But they're not the biggest players in what will soon be the most populous country in the world. In India, there's a different service with a big leg up on the tech industry's usual suspects. It's called Gaana.
If you haven't heard of Gaana, that's understandable. Outside of India, it's not particularly well known. But that's changing now as the streaming music giants, investors, and industry observers take stock of what's happening in this growing region.
Gaana is making news for one simple reason: It has a huge subscriber base. Over 150 million active users log onto Gaana every month using the service's web and/or mobile apps. That figure is double Apple Music's subscriber base and far ahead of Alphabet and Amazon, though it's only half of what Spotify can claim worldwide.
Gaana's brand name is Hindi for "song" -- a linguistic detail that reflects Gaana's focus on its home country. Its music catalog is extensive, but there's a clear focus on what Indians want to listen to: Gaana's library includes a lot of tracks from Bollywood movies and Indian artists, and it lacks some of the Amero- and Euro-centric hits that users can find on Spotify and Apple Music. Out of the more than 45 million tracks available on Gaana, more than half are Indian in origin.
Both Spotify and Apple Music are available in India, but both are getting absolutely drubbed by the homegrown hero. Indian customers seem to prefer Gaana's focus on domestic tunes -- and perhaps its pricing. Gaana slashed its prices in 2019 only for Apple to follow suit, while Spotify offered heavy promotions in December.
How much should Spotify and Apple Music worry?
Gaana's focus on India, as well as its low prices and the expense that would be associated with patching up its gaps in foreign music content make it a relatively unlikely global competitor to Spotify and Apple Music -- at least for now. But even if the effect of Gaana on Spotify and Apple Music is limited to India, that's a big deal. India's population is large and growing, and an improving standard of living has made smartphones and other electronic devices cheaper and more common. There's a ton of room for growth. Out of the country's population of 1.4 billion, there are only (a very relative term) 150 million to 180 million music streaming customers.
The way things are now, competing in India will be an uphill battle for Gaana's foreign rivals. Spotify and Apple could adapt by acquiring more of the domestic content that is helping Gaana thrive, but they're facing down a competitor with an enormous head start, not to mention some healthy American competition in the form of YouTube Music. It's hard to imagine that even these Silicon Valley giants will approach Gaana's level of success in India any time in the near future.