Apple’s partnership with India’s second-largest telecom company will give the iPhone maker a much-needed boost in a content market where it lags far behind companies like Spotify and Walt Disney.
The US tech giant, which is trying to grow its global revenue through services such as apps, payments and media, is set to offer free music and video streaming to many of Bharti Airtel’s 281 million customers.
The deal is likely to significantly expand the user base for Apple TV+ and Apple Music in a country where Apple has long focused on manufacturing to diversify its supply chain beyond China.
Apple makes a large number of its iPhones in India, but its phones account for just 6% of the country’s 690 million smartphones, up from about 2% in 2019, according to data from Counterpoint Research.
“This move is a testament to Apple’s ambitions for India,” said Nitesh Kripalani, former head of Amazon Prime Video in India. “The strategy is a proven method to catapult presence in markets it considers important.”
In the US, Apple has offered Apple Music for free on select Verizon mobile data plans since 2019, and its Apple TV+ will be part of a Comcast streaming offering starting in May.
In India, Apple Music will become available to premium users of Airtel’s Wynk music app, which will eventually shut down.
Airtel’s postpaid contracts give about 7 million subscribers access to the ad-free version of Wynk, but only a small fraction use it, said a telecom industry source who declined to be named as the figures are confidential.
Neither Apple nor Airtel responded to requests for comment outside business hours.
MUSICAL BATTLEFIELD
Apple Music is better suited to the Indian market than Apple TV+, which is primarily in English, with content including Bollywood songs and regional language songs, although its library is smaller than Spotify’s, said Neil Shah, co-founder of Counterpoint.
Spotify has about 3 million paying users in India, Gaana 1.4 million, Wynk 500,000 and Apple Music 200,000, said an Indian music industry source who declined to be identified because he was not authorized to share estimates publicly.
Neither Spotify nor Gaana responded to requests for comment outside of business hours.
Overall, only 7.5 million people paid for audio streaming services in India last year, out of about 185 million users of apps with and without ads, according to data from industry group FICCI and consultants EY.
Airtel will pay Apple a per-user fee that is “significantly” lower than the $1.20 monthly fee it charges for Apple TV+ and Apple Music in India, the telecom industry source said.
In return, the company will save millions of rupees in licensing costs as it seeks to shut down Wynk and use Apple Music to boost revenue and improve customer loyalty, a second telecom industry source said.
“Airtel has realised that its strength lies in distribution and not content creation,” the source said on condition of anonymity as he was not authorised to discuss the matter.
STREAMING VIDÉO
Apple is a small player in video streaming in India, with Counterpoint estimating it has less than a million users. Disney+ Hotstar is the market leader with 38 million users, while Netflix is estimated to have around 10 million.
Hinting at the market potential, Netflix has repeatedly said it is aiming for 100 million users, without setting a timeline.
Apple TV+ is known for original series like “The Morning Show” and “Slow Horses,” but rivals including Netflix and Disney offer more Hindi content featuring Bollywood actors and even regional-language films.
Disney and Reliance Industries’ JioCinema also broadcast cricket – India’s most popular sport – and the two companies are merging their Indian media assets to create the country’s largest entertainment company.
Airtel, which as a telecom provider is second only to Reliance Jio in terms of subscribers, plans to offer plans with several months of free access to Apple TV+, the second telecom source said.
While this will allow Apple TV+ to enter more homes, growth could be hampered because its “offering is not yet locally optimized,” Counterpoint’s Shah said.
