Picture: REUTERS
Picture: REUTERS

For R60 a month South Africans can subscribe to the premium, ad-free Spotify offering, as the world’s largest streaming service officially launched in the country today.

"This is our first African country, our first step onto this continent. It’s really great to be here," Michael Krause, Spotify MD for Europe, Middle East and Africa (EMEA), told Business Day at the launch in Johannesburg on Tuesday morning. "It’s very important to have local playlists and local music available," he said, citing 20 curated local playlists and addressing the perceived delay in the service reaching SA.

Africa is "the home continent of music historically", Krause said. "It’s really great to be here."

The R60 ($5) monthly fee for unlimited streaming — as well as the ability to save music offline — is half that of the usual $10 (about R120) charged in the US, and much less than the €10 and £10 charged in the EU and UK, respectively. This price was agreed after discussions with record labels and aims to make the service more affordable, Krause explained. It is also the fee charged by Spotify’s main rivals, Apple Music and Google Play Music.

Considered the gold standard of the genre of music streaming, its playlists have become its main feature — allowing people to discover new music based on their previous listening history.

Spotify has 159-million users worldwide, of which 71-million pay for the premium service. Last month it announced its initial public offering (IPO) on the New York stock exchange, valuing the Swedish firm at $23bn.

Considered the gold standard of the genre of music streaming, its playlists have become its main feature — allowing people to discover new music based on their previous listening history. Some musicians internationally have launched their careers via Spotify, where significant listeners can be attracted using the services 2-billion playlists. It has 35-million songs in total.

Streaming the service will consume 10.8MB per hour at its lowest setting of 24KBps, which is the same as radio, said Claudius Boller, Spotify’s MD of the Middle East and North Africa (MENA) region. This is "much lower" than the 40MB per hour of its competitor services.

The free, advertising-supported offering plays three minutes of advertising in an hour of listening. Local advertising is sold by Ad Dynamo, which was recently unveiled as the sales partner for Snapchat, and which has been selling advertising for Twitter in Africa for a few years. "This free tier allows people to listen to music, and allows them to move into the premium," Boller said.

Other Spotify payment options — such as student or family accounts — will be considered at a later date, based on user demand. Spotify users who have been using international accounts can change to SA in Spotify’s settings, where the country now appears as an option.

Of its 159-million total customers, its premium users grew 46% in 2017 to 71-million, according to Spotify’s filing with the US Securities and Exchange Commission. It claims to controls 42% of the global music streaming market, and has double the users of Apple Music, its closest rival.

Spotify’s revenue last year was $4.99bn, up from $3.6bn in 2016, but its operating losses grew to $461m last year from $426m the year before. It aims to raise $1bn through its unusual option of a direct listing that forgoes the usual roadshows and hefty advisor fees.