MUMBAI: With world’s largest streaming service, Spotify, announcing its entry in India this April, the competition gets stiffer for the already existing industry players. However, considering this new development, Reliance Jio and Saavn coming together could also be seen as a strategic move to break the votes diverting towards Spotify. According to a recent announcement, Mukesh Ambani’s Reliance Jio is investing in New York-based streaming services provider Saavn for $ 670 mn and the deal is to be sealed by June 2018. Already a 6500 Cr company, Saavn holds rights over 30 mn songs, including Hindi, English and regional content. This deal will see a marriage between digital ecosystem of the fastest growing App in India Reliance Jio and streaming media expertise of Saavn.
Speaking on this strategic transaction, Akash Ambani director Reliance Jio, said, “The investment and combination of our music assets with Saavn underlines our commitment to further boost the digital ecosystem and provide unlimited digital entertainment services to consumers over a strong uninterrupted network. We are delighted to announce this partnership with Saavn and believe that their highly experienced management team will be instrumental in expanding Jio-Saavn to an extensive user base, thereby strengthening our leadership position in the Indian streaming market.”
Saavn co-founder and CEO Rishi Malhotra said, “Nearly 10 years ago, we had a vision to build a connected music platform, dedicated to South Asian culture across the globe. Vin, Param (Paramdeep Singh and Vinodh Bhat) and I always envisioned the company for the long term with an intense focus on products, data, and groundbreaking original content. Our alignment with Reliance enables us to create one of the largest, fastest-growing, and most capable media platforms in the world.”
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Paramdeep Singh, Co-Founder and Executive Vice Chairman at Saavn, added “Saavn has been at the forefront of the digital music revolution in India. Our partnership with Reliance reinforces our commitment to the growth of our label partners, the independent artist ecosystem, and the overall music industry globally.”
Reliance Jio, will be a stakeholder in Saavn along with Tiger Global Management, Liberty Media and Bertelsmann among others. The three co-founders of Saavn, Rishi Malhotra, Vinod Bhat and Paramdeep Singh will retain their leadership position in the Saavn Management.
With India’s Music industry expected to grow to Rs 25.4 billion by 2021, Spotify’s entry in the constant evolving Indian streaming market can be considered to be well thought of. Currently, the leading most streaming service in the world, Spotify stands tall with 76 mn subscribers followed by Apple Music crossing 30 mn subscribers this February. Spotify CEO, Daniel EK, recently shared the Stockholm based company’s intentions of expanding to more markets like India and Africa, with a rich musical background.
Despite the official absence of Spotify in Indian Market, there are already many subscribers of Spotify in India through Virtual Private Network (VPNs). Battling that along with the presence of their global rival Apple Music, Spotify will strive to achieve gradual popularity in India. Their understanding of the market will have to widen to regional segments, as that is the highest grossing point for any homegrown brand. The lack of regional content is the exact reason why Apple Music fails to make a big splash in India, despite the subscription charges being lowest that is rupee equivalent of below $2. Considering only numbers, Times Group’s Gaana leads the market in India, and has also received 115 mn funding from China-based streaming service Tencent.
However, Spotify’s move, of an unexplored path yet by a music streaming service going public and offering share to the public, has generated immense buzz in the market. Apart from the fact that the IPO goes live in the first week of April 2018 and recruiting Akshat Harbola, Ex-Google, the company has stayed tight-lipped about further details, though the word is that they have already zeroed down on an office space in the financial capital Mumbai.
With a high-level penetration of handheld devices, the digital music world is peaking, making the time right for music streaming apps to present their best to the audience. The market is full of opportunities and an equal amount of challenges for the players. While Spotify’s international artiste roster is next to none, the company will have to battle out the pricing factor in India, to have an edge over their arch-rival Apple Music, at the same time will have to develop regional content to be a step ahead of the homegrown brands.
A thick bold silver lining to the murky cloud of intense battle amongst the streaming service would be a solution to the long-standing problem of conversion of a free subscriber to a paid one, faced by the Indian market.
While Indian market is already cluttered with multiple home-grown brands like Wynk, JioMusic, Gaana, Saavn, and Reliance Jio and Saavn coming together, entry of Spotify will certainly spruce the already cut-throat competition.
