The Rise of OTT Music Platforms and Content in India.
The OTT music platform market in India has become really competitive over the last few years and with the arrival of a big player like Amazon Prime Music and the integration of Jio Music with Saavn the competition for subscribers has reached a new level. In India there are various factors which come into play in order to increase the usage and subscriptions of these OTT platforms. Most important factor is the ARPU level of of the Telecos.
Understanding the ARPU Level in India
The Average Revenue per User is the amount generated per user by a Teleco company every month for their services. The ARPU level in India has been on a decline since the arrvial of Jio in the Teleco Market. With low tariff plans Jio has been able to garner a large majority of subscribers on their network which has become a huge problem for their rivals. The Reliance backed Jio is able to sustain the market with their fluctuating ARPU levels which has not been the case with other major telecos. Most of the major telecos have seen a decline in their ARPU levels and the projected ARPU level for the year 2018 is not so promising. For users this is good news as they don’t have to shell a lot on data and tariff plans.
Why is the ARPU level so important ?
With the arrival of 4G service in India there has been a tremendous growth in data subscribers. Although this number of data subscribers has increased over the years, the average tariff plans for using broadband and data in India have reduced considerably. Most of the major Telecos have reported enormous drops in their ARPU levels. The only Teleco which is able to sustain this market right now is Jio which reported an ARPU level around Rs. 150 which is more than any other Service operator right now. For their rivals the average industry ARPU decline may lead to merging of Telecos to create one giant Teleco Company which will control the entire Industry, leading to sudden peaks in data and tariff plans.
Rise of Music OTT Music Platforms
According to January 2018 the OTT market in India is valued over $280 Million and will keep on increasing over the next few years. Keeping aside Video platforms like Hotstar, SonyLiv and more, music OTT platforms like Saavn, Apple Music, Google Play have seen a tremendous surge in their usage and will continue over the years. The Music Streaming platforms can be classified as follows
1) Indian platforms like Saavn, Gaana and Hungama.
2) International Streaming Platforms like – Apple Music, Google Music, Amazon Prime Music and Spotify unofficially and
3) Telecom Operator backed platforms like Jio Music and Wynk Music.
Almost all Indian music streaming platforms in India are free for streaming with an Advertisement based model for revenue. Other than that most of them offer a premium subscription based membership on a monthly fee for an ad free experience along with offline streaming. Apple Music has a monthly subscription fee of Rs 120 which is the highest fee for a music streaming service in India. Other than that almost all other services offer premium monthly membership for a fee under Rs 100. Amazon Prime Music has a different revenue model and is free for their Amazon Prime users.
When it comes to Music content, Apple Music, Amazon Prime Music and Google Play are the front runners with a library consisting around 40 Millions tacks. Homegrown platforms like Saavn and Gaana come second with around 30 Million tracks. Telecom Operator supported services like Jio Music and Wynk are a distant third with around 10 Million or less tracks in their library.
The strategic Integration of Saavn and Jio Music
In March 2018, Jio Music and Saavn integrated to form a new platform in a transaction deal worth over 1 Billion USD. This business will be developed into a media platform of the future with global reach, cross-border original content, an independent artist marketplace, consolidated data and one of the largest mobile advertising mediums. The importance of this deal is that Jio gets access to Saavn’s 30 million plus Music Library in addition to their existing library. The combined platform will also build on Saavn’s award-winning Original Programming, Artist Originals (AO), which has re-defined the development, marketing and distribution of original audio content.
Reliance will also invest upto $100 million, out of which $20 million will be invested upfront, for growth and expansion of the platform into one of the largest streaming services in the world. The company will continue to operate the over-the-top media platform available on all app stores. The three co-founders of Saavn, Rishi Malhotra, Paramdeep Singh and Vinodh Bhat, will continue in their leadership roles and will drive growth of the combined entity.
Saavn leading the way in Original Music and Non Music Content by an Indian Music Streaming Service.
In 2016, Saavn expanded its content offering into Saavn Original Programming, a slate of original, non-music audio programs that range from Bollywood to comedy and storytelling to cricket. Saavn also features shows by Indus Vox Media like ‘Maed in India’ a show on Indie Musicians and their Music hosted by Mae Mariyam Thomas and also other shows like ‘Cyrus Says’. Following the launch, Saavn will continue to commission and publish new original programming, including new properties produced in partnership with both Indus Vox Media and Arré.
In early 2017, Saavn introduced Artist Originals, an original music program releasing and marketing tracks and albums by South Asian artists, songwriters and producers from around the world. Saavn is the first streaming company to conceptualize, produce, distribute and license original music with independent artists under their ‘Artist Originals’ programming.
The other player in indian Music Steaming service Gaana has also ventured into original programming by releasing Original Music by Indie Artists. Gaana Originals’ will showcase work from best of the Bollywood & Punjabi singers like Sonu Nigam, Shaan, Ankit Tiwari, Neha Kakkar, Sona Mohpatra, Tony Kakkar, Millind Gaba, Sonu Kakkar, Gurnazar, Sachin Gupta and Soham.
Bottom line: With an experienced Management team and extensive content, also keeping in mind their new formed association with Reliance, Saavn is a strong contender to win this race of Music Streaming in India even before the official launch of ‘Spotify’ the biggest Music Streaming Service in the world.