Apple prepares for battle over music and TV streaming in India after Airtel deal

Apple partners with Airtel to expand its content in India. | Image credit: Reuters

The partnership between Apple and 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 is working to increase its revenue from services such as apps, payments and media globally, and will offer free music and video streaming to many of Bharti Airtel's 281 million customers.

The deal is expected to significantly expand the user base for Apple TV+ and Apple Music in a country where Apple has long focused on the manufacturing side of its business to diversify its supply chain beyond China.

Apple builds many of its iPhones in India, but its handsets account for just 6% of the country's 690 million smartphones, down from about 2% in 2019, according to data from Counterpoint Research.

“The 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 increase presence in markets that Apple considers important.”

In the US, Apple has been offering Apple Music for free through some Verizon mobile data plans since 2019, and its Apple TV+ will be included in a Comcast streaming package starting in May.

In India, Apple Music will be available to premium users of Airtel's music app Wynk, which will be discontinued at some point.

About 7 million subscribers have access to the ad-free version of Wynk through Airtel postpaid plans, but only a small proportion of them use it, said a telecom industry source who asked not to be identified because the figures are confidential.

Neither Apple nor Airtel responded to requests for comment outside regular business hours.

Music Battlefield

Compared to the predominantly English-language Apple TV+, Apple Music is more tailored to the Indian market and offers content from Bollywood and songs in regional languages, among others. However, the library is smaller than Spotify's, said Neil Shah, co-founder of Counterpoint.

Spotify has around 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 asked not to be identified because he was not authorized to publicly disclose estimates.

Neither Spotify nor Gaana responded to requests for comment outside of regular business hours.

Overall, only about 7.5 million people in India paid for audio streaming services last year, out of about 185 million users of ad-supported and ad-free apps, according to data from industry group FICCI and consulting firm EY.

Airtel will pay Apple a per-user fee that is “significantly” lower than the $1.20 per month charged in India for Apple TV+ and Apple Music, respectively, the telecom industry source said.

In return, the company will save millions of rupees in royalties as it plans to shut down Wynk and use Apple Music to increase revenue and improve customer loyalty, a second telecom sector source said.

“Airtel has realised that its strength lies in distribution and not in content creation,” the source said on condition of anonymity as they were not authorised to discuss the matter.

Video streaming

Apple is a small player in Indian video streaming. Counterpoint estimates that the company has less than 1 million users. Disney+ Hotstar is the market leader with 38 million users, while Netflix is ​​estimated to have around 10 million users.

As an indication of the market's potential, Netflix has repeatedly stated that it aims to reach 100 million users, but without specifying a timeframe.

Apple TV+ is known for original series like “The Morning Show” and “Slow Horses,” but competitors like Netflix and Disney offer more Hindi content with Bollywood actors and even films in regional languages.

Disney and Reliance Industries' JioCinema also stream 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 is a telecom operator second only to Reliance Jio in terms of subscriber numbers, plans to offer packages with several months of free access to Apple TV+, the second telecom source said.

While this will bring Apple TV+ into more households, growth could be hampered by the fact that the “offering is not yet sufficiently locally optimized,” said Shah of Counterpoint.