Apple's partnership with India's second-largest telecom provider is set to give the iPhone maker a crucial edge in a competitive landscape where it currently lags behind industry giants such as Spotify and Walt Disney.
The American technology leader seeks to boost its global
service revenue from applications, payments, and media by providing
complimentary music and video streaming to a large segment of Bharti Airtel's
281 million subscribers.
This collaboration is anticipated to significantly expand
the user base for Apple TV+ and Apple Music in a country where Apple has mainly
concentrated on manufacturing to reduce its supply chain dependency on China.
While Apple assembles a substantial number of its iPhones in
India, its devices represent only 6% of the nation's 690 million smartphones,
an increase from about 2% in 2019, as reported by Counterpoint Research.
"This initiative showcases Apple's ambitions for the
Indian market," stated Nitesh Kripalani, the former head of Amazon Prime
Video in India. "This strategy is a well-established method to strengthen
market presence in key regions."
In the United States, Apple has offered Apple Music for free
through select Verizon mobile data plans since 2019, and its Apple TV+ will be
included in a Comcast streaming bundle starting in May.
In India, Apple Music will be available to premium users of
Airtel's Wynk music app, which is expected to be discontinued.
Postpaid Airtel contracts provide around 7 million
subscribers with access to the ad-free Wynk version, although only a small
fraction actively engages with it, according to a telecom industry source who
requested anonymity due to the sensitive nature of the information.
Neither Apple nor Airtel has commented on inquiries made
outside of regular business hours.
MUSIC BATTLEGROUND
According to Neil Shah, co-founder of Counterpoint, Apple
Music is better suited for the Indian market compared to the predominantly
English-language Apple TV+, featuring a selection of Bollywood and
regional-language tracks. However, its catalog is smaller than that of Spotify.
In India, Spotify boasts approximately 3 million paid
subscribers, while Gaana has 1.4 million, Wynk has 500,000, and Apple Music has
around 200,000, as reported by an anonymous source from the Indian music
industry who was not permitted to disclose these figures publicly. Neither
Spotify nor Gaana provided comments outside of regular business hours.
Data from the industry group FICCI and consultants EY
indicates that only about 7.5 million individuals subscribed to audio streaming
services in India last year, out of a total of approximately 185 million users
of both ad-supported and ad-free applications.
An industry source revealed that Airtel will pay Apple a
per-user fee that is "significantly" lower than the $1.20 monthly
charge for Apple TV+ and Apple Music in India.
This arrangement will allow Airtel to save millions in
licensing fees as it plans to discontinue Wynk and leverage Apple Music to
enhance revenue and customer loyalty.
"Airtel recognized that its strength lies in
distribution rather than content creation," stated the source, who
requested anonymity due to restrictions on discussing the issue.
VIDEO STREAMING
Apple holds a minor position in the Indian video streaming
market, with Counterpoint estimating its user base at under 1 million. In
contrast, Disney+ Hotstar leads the market with 38 million users, while Netflix
is estimated to have around 10 million subscribers.
Netflix has indicated its ambition to reach 100 million
users, although it has not provided a specific timeline for this goal. Apple
TV+ is recognized for its original programming, including series like "The
Morning Show" and "Slow Horses."
However, competitors such as Netflix and Disney offer a
wider array of Hindi content featuring Bollywood stars, as well as films in
various regional languages.
Additionally, Disney and Reliance Industries' JioCinema
provide live cricket streaming, which is immensely popular in India, and the
two companies are in the process of merging their media assets to form the
largest entertainment entity in the country.
Airtel, the second-largest telecom provider after Reliance
Jio, intends to offer packages that include several months of complimentary
access to Apple TV+, according to a second telecom source.
While this initiative may increase Apple TV+'s presence in
households, growth may be limited due to its current offerings not being fully
tailored to the local market, as noted by Counterpoint's Shah.