Indian telecommunication services firm Bharti Airtel is said to be in ‘serious talks’ to buy India-based Spotify rival Gaana.
The potential deal would see Airtel expand its music streaming offerings as it already runs a similar platform called Wynk Music.
Founded in 2011, Gaana hosts popular Bollywood, Hindi, regional, and international music on its platform.
The potential acquisition was reported on Tuesday (August 2) by Billboard, citing people familiar with the matter.
Indian daily news outlet The Economic Times, owned by Gaana’s parent company Times Group, reported on Tuesday that the deal had been completed, but it subsequently took down the story, Billboard said.
Discussions between Airtel and Gaana have reportedly been going on for a few months, according to reports published last month.
The reported talks sparked speculations that Airtel could merge Gaana with its existing music platform called Wynk Music.
Wynk Music, which costs 49 rupees ($0.62) per month for a premium subscription, recently ranked No. 1 on the Google Play Store in India, in the “Music & Audio” category, beating the global giant Spotify, TikTok affiliate Resso Music and JioSaavn by Airtel rival Reliance Jio, according to Indian telecom news portal TelecomTalk.
Gaana, on the other hand, charges 99 rupees ($1.25) per month for premium access. Despite being founded over four years later than Gaana, Wynk Music beat the former in terms of downloads in 2021. Wynk Music saw 39.4 million downloads last year, while Gaana had 26.4 million downloads, according to an analysis by India-based media platform Inc42.
If confirmed, the merger of these two platforms would allow Airtel to grab a bigger share of India’s audio streaming market that is expected to reach $870 million in scale by 2025, according to Inc42.
The popularity of Bollywood music is behind the strength of India’s home-grown music streaming apps. India-based users stream music for 19.1 hours per week, higher than the global average of 17.8 hours per week, according to music industry portal MusicPlus.
“Today, in the larger OTT ecosystem, we in our own ways are continuing to work towards growth, and bringing out larger paid communities in play.”
Prashan Agarwal ( Ex-Gaana CEO)
India’s strong appetite for music drove Gaana to “convert the consumers into paying subscribers,” according to former Gaana CEO Prashan Agarwal, in a quote published by MusicPlus in March.
“Today, in the larger OTT ecosystem, we in our own ways are continuing to work towards growth, and bringing out larger paid communities in play,” Agarwal reportedly said.
Agarwal left Gaana last year to establish an NFT marketplace called FanTiger, which in May raised $5.5 million in a seed round led by Multicoin Capital.
Meanwhile, a deal between Airtel and Gaana would provide a boost to the latter platform on its path toward profitability. The company reportedly expects to be profitable by 2023 and to reach 500 million subscribers by then.
In the fiscal year ended March 2021, Gaana posted 3.27 billion rupees ($41.6 million) in losses, slightly down from 3.52 billion rupees in losses the previous year, according to data published by Indian tech media outlet Entrackr.
Gaana’s earnings figures are not publicly available, nor are those of its parent company, which is not publicly listed.
A deal with Airtel would also strengthen Gaana’s investor base. Last year, the company raised 2.49 billion rupees from Chinese tech and media giant Tencent Holdings by issuing convertible shares. That deal valued Gaana at around $570 million to $580 million at the time, according to Entrackr.Music Business Worldwide