As listeners tune in to free-to-use apps such as YouTube and Amazon Prime Music — part of the bundled offering for Prime subscribers —, music streaming apps such as Saavn, Gaana and Wynk are betting on original content to drive listenership and revenues.
The total number of music streaming users in 2017 was 87.6 million of which 2% were paid subscribers, according to FICCI-EY. This share is expected to rise to 5% by 2020 by which time the total listener base is estimated at 273 million.
Prashan Agarwal, CEO, Gaana believes that having differentiated content helps not only to attract listeners but also improves engagement and stickiness. “It’s new to India and each player is experimenting to see what works best on their platform,” Agarwal adds.
Times Internet and Tencent owned Gaana has a rolled out some original content and has also invested in podcasts under Gaana Specials. The music streaming app is understood to have signed on exclusive deals with Punjabi artists like Diljit Dosanjh, Jassie Gill and Parmish Verma. Moreover via Gaana Originals it promotes non-film music by singers such as Shaan and Ankit Tiwari. Agarwal says he has exclusive streaming rights for Salman Khan-starrer Race 3.
Competitor Saavn, now backed by Reliance Jio, has been adding to its original content offering. Saavn Originals runs a podcast service while artist originals (AO) conceptualises, produces and distributes new music with independent artists from India and South Asia. For Vinodh Bhat, co-founder and president, Saavn, differentiated original content, a deep catalogue of licensed content and an intuitive product platform defines the platform’s strategy.
Bharti Airtel-owned Wynk has recently started offering original content. Sameer Batra, CEO, Airtel Wynk, believes that instead of signing exclusive deals with popular artists which could prove to be expensive, teaming up with regional artists is a better bet. Wynk plans to add to its regional music library.
Satya Raghavan, entertainment head, YouTube India, says the number of creators making content for YouTube is large. “This is also the reason behind over 400 hours of content being uploaded every minute. We work with artistes directly apart from music labels such as T-Series, Sony to help them get more users on the platform,” Raghavan says.
However, given the high cost of running the operations and the heightened competitive intensity — there are at least half a dozen popular streaming apps in the market —, it’s hard to make ends meet. Gaana’s Agarwal notes monetisation continues to be tough for all streaming players. “The cost per thousand impressions (CPMs) has been under pressure for the industry post the inventory glut created by the 4G revolution. Agarwal is confident this will stabilise over next 12 months with advertisement volumes and rates improving.
Acquiring customers is costly at Rs 50 per download but if there is support from a mobile services provider the cost falls dramatically — by 60 % to Rs 20 per download. According to a FICCI-EY report average revenue per user (ARPU) is estimated at about Rs 70 per user in case of music apps.
Saavn’s Bhat says sponsored content works well. “Many brands like Bira 91, Nexa and One Plus are working with us. Recently, Netflix launched a new show on their platform, which had a companion podcast resting exclusively on Saavn in India. And with Jio, we are looking to work with brands and advertisers at scale,” he observed.