Quick Take: Spotify Expands Premium Duo into Latin America

Spotify has announced that its Premium Duo plan will be expanding to another 17 countries, 14 of which are in Latin America. The plan, which is effectively a mini version of its popular family offering, has been created with the express intention of servicing couples who reside at the same home address.

Social trends play into this; according to this report from 2016 on cohabiting trends in Latin America, some countries in the region have seen cohabitation levels more than quadruple since 1970. It is also a shrewd consumer cost-saving manoeuvre from a company which is likely to deal with its first recession in the coming years, testing for the first time how consumers view the value of a paid music streaming service when compelled to tighten discretionary spending.

But why the emphasis on the region, and why now? A few statistics to consider:

• Latin America continued its upward trajectory with 17.7% growth in revenue, up on 2016’s increase of 8.5%. Overall, the region showed the highest level of growth globally, driven largely by a 48.9% increase in streaming revenues.

• Growth was seen across the entire region, but most notably in Peru (21.7%), Chile (14.3%), Colombia (10.5%) and Mexico (7.9%). The region’s largest market, Brazil, has returned to impressive growth (17.9%).

With growth slowing in developed markets, Spotify is still looking for its next exponential growth story to appease the demands of being a publicly-listed tech company on the NYSE. Such trends in Latin America are therefore setting a blueprint for emerging markets more broadly, meaning that the region, which has been opportune for streaming due to the fact the download market never really got going, remains a test case for further global expansion plans. What happens in Latin America will therefore determine how Spotify and the wider music streaming ecosystem as a whole strategise for the next one billion internet users.