Spotify enters the Philippines with cheap (or pricey?) subscriptions

Spotify is making a splash as it enters Asian countries with lower prices for its premium subscription service. In partnership with Globe Telecom, Spotify has entered its 56th country, entering the Philippines with a $3 price (converted to U.S. dollars) for subscription.

“We’re in Singapore, Malaysia, Singapore, Hong Kong, and Taiwan. The Philippines is our fifth country in Asia and 56th globally.” –Sunita Kaur, Spotify’s director for Asia

Just as phone makers are creating lower-priced devices for emerging markets, so we can expect music services to price down their offerings when operating in less prosperous markets than the U.S. and western Europe.

While there is some Internet buzz about cheapening music in the wake of Spotify’s Philippines launch (one headline: “Race to the Bottom?”), the reverse might be true when considering contrasting economies.

In the U.S., Spotify Premium costs $10/month — market price for a country whose per capita Gross Domestic Product (GDP) is a relatively high $53,101. The per capita GDP of the Philippines is $2,790, or 5.2% of the U.S. economy. Through that lens, it could be argued that Spotify is charging six times what the market can bear. (Based on GDP, Spotify’s subscription service should cost 5.2% of the U.S. service, or 52 cents.)