Homegrown providers of online music streaming platforms are increasingly capitalising on proliferation of data penetration and consumers’ shift to entertainment on-the-go to capture a slice of the growing over-the-top market, which is pegged to touch $662 million by 2020, according to estimates drawn up by BofA Merrill Lynch.
Digital app Jio Music from Reliance Industries and Saavn, a leading global music OTT platform, have integrated to create JioSaavn app, a process which was started earlier this year to create South Asia’s largest streaming, entertainment and artist platform, Reliance Industries said in a release on Tuesday.
The combined entity is valued at over $1 billion. With the integrated JioSaavn app, users can expect a suite of new in-app products and music experiences, including an interactive lyrics feature, localised vernacular display, custom integrations with concerts and live events, as well as exclusive video content to roll out over the next few months, RIL said.
Monetising music is easy on the digital platform as either companies get cash upfront for using the rights or they get a revenue share if anyone streams music online on platforms like Saavn, Gaana.com etc, according to analysts at BofA Merrill Lynch. Experts at Deloitte say revenues from digital music industry including streaming, downloads, other format revenues, subscription and ad revenues will cross Rs 3,100 crore by 2020.
“The biggest trend emerging in the music industry in India is that consumption is rapidly shifting to mobile devices. At Gaana, over the last one year, we’ve seen an accelerated growth in adoption, engagement and consumption on mobile devices. The growth of streaming services is indicative of consumers preferring legitimate streaming over pirated music, primarily for a superior, convenient, multi-device hassle-free experience. Access to millions of songs, anytime, anywhere is the ‘in’ thing with today’s digital consumer,” the Deloitte report quoted Pawan Agarwal, business head of Gaana.com.
As data usage becomes ubiquitous, media consumption habits of consumers are witnessing a seismic shift. Telecom and technology companies across the world sense this as an opportunity to cater to this burgeoning subscriber digital base by building a footprint across the content part of the value chain, KPMG said in a report.
Since the launch of 4G services by Reliance Jio in September 2016 at disruptive prices, data consumption has emerged as the primary source of revenue growth for telcos as data costs have approximately reduced by 90% since then. To drive data consumption, telecom operators are increasingly looking at content as a differentiator, both in terms of consumer acquisition and retention.
While operators like Airtel, Vodafone and Idea have looked to aggregate content across traditional television and video OTT apps, Reliance Jio is pursuing a two-pronged strategy of both aggregating content and investing in exclusive content through alliances with media companies across the value chain, the report said.
In the coming days, telcos will try to have integrations (like that of Jio Music and Saavn), whether in form of acquisition or deep partnership as a ‘key part of their data consumption strategy’. Given that half of the country is yet to adopt use of internet, music will be a key lever to drive the growth, said Jehil Thakkar, head media and entertainment, partner, Deloitte.