How the Battle for the Indian Streaming Market Will Heat Up in 2019

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Mumbai, India skyline.

As two prominent Indian streaming services -- Saavn and JioMusic --  join forces and relaunch as one, Spotify faces an even bigger challenge as it readies to launch in the world's second-most populous country.

"It is absolutely a game changer," said Paramdeep Singh, co-founder and executive vice chairman at JioSaavn, told Billboard over a Skype call recently. "We are anticipating that we'll add tens of millions of new users on top of the existing base of Saavn and JioMusic every month. Right now, we're projecting north of 100 million monthly active users on JioSaavn at the end of Q1. We're planning to leverage the growth of the Jio network, and their ecosystem at large, to be able to drive a lot of these users."

The partnership, originally announced in March 2018, set JioSaavn's valuation at over $1 billion, and officially launched Dec. 3. Reliance Jio is one of the largest telecom companies in India, with 252 million broadband subscribers as of October 2018, and is part of the massive Reliance Industries conglomerate. Saavn is one of the first Indian companies to shift to streaming music. They started in 2007 focusing on aggregating and distributing music, before pivoting to streaming with the launch of their website in 2010 and app a year later. All existing Saavn and JioMusic entities will now be known as JioSaavn, with the company in the process of migrating users to the new platform.

"We'll be making sure all their playlists, downloads, all their content is migrated and it's a seamless experience," said Singh.

Music streaming is a crowded market in India, with both Indian and international companies vying for space. Indian media have been reporting about Spotify's impending launch for months: there were initial reports global streaming leader had planned to buy out a local service around a year or so ago, though it hasn't to date. A small number of users have already been using Spotify in India through VPNs, or Virtual Private Networks, software that disguises a computer's IP address so that it can access websites from a masked location. CEO Daniel Ek confirmed Spotify's entry to India in March, without revealing a timeline.

But meanwhile Google Play Music has been amassing a growing share of the streaming market, while Gaana, Amazon's Prime Music, Wynk, and the new JioSaavn are already competing as well. YouTube remains the most popular. Apple Music, too, is available, offering their service across platforms and devices (including Android), and priced at Rs. 120 ($1.7). Apple doesn't disclose its Indian subscriber numbers, but Indian artists and journalists tend to follow it closely.

JioSaavn, like Saavn before it, offers a free ad-supported model, in addition to a subscription service priced at Rs. 99 ($1.40) per month. The Saavn and JioMusic apps will be phased out over the next month, with users expected to update or download the new app. Prior to the integration, Saavn and JioMusic had a combined user base of over 25 million monthly active users, out of which approximately 4 million were paid or bundled users. Users on the Jio network get a free three-month trial of the paid service, which includes 45 million tracks.

"We're also toying with the idea of a potential mid-tier, maybe a less expensive version but with limited functionality, just to be able to create an additional step towards subscription. We want to migrate users eventually, in the long-term, to a subscription environment," Singh told Billboard, adding that the company would continue to retain its ad-supported model as well.

In late 2017, Saavn management was in the process of raising a strategic round. In the past, they'd received money from their financial partners such as Tiger Global, but in this instance, they were looking specifically for a strong strategic partner.

"Every other streaming service has now either gone public, or is imminently going public, or is backed by the majors. So in order for us to continue to grow and compete, we needed some kind of competitive advantage," said Singh.

Formal discussions with Jio began after they were reintroduced to Akash Ambani, director at Reliance Jio, through the Bollywood actor Ranbir Kapoor, who has been a partner at Saavn for many years -- Kapoor, Singh recalled, insisted they talk since they both had similar ways of approaching things. A big part of JioSaavn's growth is expected to be off the back of the growth of the Jio network, which is expecting to double or triple its base in the next few years.

Beyond the rebranding and onboarding of the existing user base to JioSaavn, they also plan to expand the functionality of the platform.

"We have a number of things we plan to add, which include lyrics, music videos, certain live streaming integrations. Over the course of the next year, we're going to continue to add more functionality and features into the product," said Singh.

JioSaavn For Business, for instance, will look at the retail and hospitality music industries, and attempt to streamline and digitize the process of royalty payments and collections in the country.

Instead of limiting themselves to music streaming, JioSaavn wants to continue Saavn's vision of expanding the overall industry. Artist Originals, an initiative by Saavn where they work with young, independent artists to help them record and release music, will continue.

"Artist Originals is absolutely a core part of our business and strategy. We're going to continue to invest and help promote independent artists. We're actually also working on developing deeper collaborations between independent artists in India and the western market as well. It's not just about them reaching touring status; we want to make these artists from India into global superstars, and we believe it's possible," he said.

Singh pointed out how the role of the film industry, Bollywood in particular, is unique to India, in that it propels much of the music industry. Unlike in the west, the culture of "superstar" musicians -- like Drake or Beyoncé -- hasn't really existed.

"In India, it's either Shahrukh Khan or Salman Khan. There's never been a music artist, at least in recent times, that's ever been even near that level of fame and superstar status. We believe that's now going to change with the emergence of the internet and streaming platforms or Instagram and YouTube, which continue to penetrate the market. It's going to help pave the way. We're absolutely supportive of all Bollywood and film music, but we believe independent music is just as important."

They also intend to create an ecosystem for artists to earn their livelihood through JioSaavn, be it through live streaming concerts or by allowing artists to upload music directly to the platform eventually, and providing them opportunities to interact with fans and engage with them through fan commerce. For now, artists have to go via a distribution partner to upload their music, but they do have access to a dashboard that provides them analytics and insights into how their music is being consumed.

What sets JioSaavn apart, according to Singh, is the reach that the Jio network provides. While they have been able to capture early adopters in the tier-one cities in India, thanks to their first-mover advantage, Singh feels the partnership will help make JioSaavn a household name even across tier-two and tier-three cities. "We believe our greater distribution and penetration across the market is going to open up even more opportunities for regional music players and indie artists, and help drive the landscape, which has been heating up over the past few years," he said.

Their founders are based in New York, because Saavn originally served as distributors and as a bridge between the Indian and American markets. However, today they've used that location as a competitive advantage, providing them greater access -- they count Bono, U2, Madonna as investors -- and they have in the past struck deals in India with Google, Facebook, Shazam, Snapchat, Twitter, among others. They have an office in Mountain View, Calif. as well, housing their core engineering team. JioSaavn is available globally for Indian music, and any given month will see users from over 150 countries accessing it, according to Singh. Their international music catalog is restricted only to South Asia, though they are in the process of expanding to the Middle East as well.

"We've been collecting data for almost a decade in India now," said Singh, noting how in India, a very high number of users tend to listen to music in more than one language. "That's a very unique facet, which doesn't really exist in many other countries around the world. Which means our entire product, and the way we present content to our users, depends on the users' choice and the languages they've expressed an interest in."