Spotify's bumpy ride in India hits another hurdle; Warner Music sues it

Warner Music Group has asked the Bombay High Court to block Spotify Technology SA, the world’s largest paid-music-streaming service, from offering songs by its roster of songwriters, including Katy Perry and Led Zeppelin, in India.

Warner said in a statement Monday it asked the court for an injunction. Spotify didn’t immediately respond to requests for comment and Bloomberg wasn’t immediately able to verify the lawsuit with the court.

For Spotify, which is said to plan introducing its service in India in the next few weeks, the lawsuit escalates a dispute between the company and the third-largest music group. It’s also the latest hurdle in Spotify’s bumpy path to India, one of the Stockholm-based company’s biggest untapped markets.

Spotify hasn’t secured a license to music from Warner Music Group but it’s planning to use an Indian rule that governs radio stations to offer songs from Warner’s publishing division, according to a spokesman for Warner.

India is potentially a lucrative market. Music sales climbed 17 percent to $130.7 million in 2017 in the country, according to the International Federation of the Phonographic Industry. Rival streaming services have already gained a foothold amid the proliferation of high-speed internet there.

Spotify had been in talks to get a license for Warner’s music but the streaming company “abruptly changed course" by falsely saying that a rule applicable to broadcasters applies to Spotify as well, Warner Music Group said in statement. “We had no choice but to ask an Indian court for an injunction to prevent this."

Spotify, whose audio service has more than 200 million users across 78 countries, has been attempting to enter the Indian market for some time, and has already secured deals with the largest local record labels. Domestic music such as that from Bollywood movies accounts for the majority of songs listened in the country.

But major labels still represent the biggest pop acts in the world, and Spotify has yet to announce deals with any of the three major record labels. Under Spotify’s current plan, it still wouldn’t be able to offer music from Warner’s record label, which represents Bruno Mars, Ed Sheeran and Cardi B. Publishing companies represent songwriters, while record labels work with the recording artist and producer.

Spotify and Warner have been at loggerheads for months now, and Spotify informed Warner late last week that it planned to use a statute, which is used to regulate broadcasters, to enter the market with songs from Warner’s publishing division.

Though the growth of streaming services has helped music companies, label firms have been withholding rights in India to retain leverage in negotiating other long-term deals. The latest dispute could complicate those talks.

(With assistance from Upmanyu Trivedi.)