One of the most-discussed ideas in today’s record business is the concept of Spotify ‘becoming a record label’ by signing and developing artists.
While Daniel Ek‘s company has so far made no real noise in that area – paying for its own mood-playlist fillers aside – there is another streaming service that’s being open about its venture into label land.
Saavn, founded in the US in 2007 but with strong connections in India, has just released a third single — ‘Tum Jab Pass’ by folk/pop artist Prateek Kuhad — as part of its Artist Original series.
The programme aims to provide a worldwide platform to independent artists from South Asia, via a distribution deal with The Orchard. Music released under AO is exclusive to Saavn in South Asia.
The company has all its tracks mastered at Sterling Sound in New York, and offers artists marketing, PR and radio plugging — just like a record label.
“It’s not about tying artists down to long term deals, but making them feel like we are here to support them and the independent music scene in India.”
neal sarin, saavn
An A&R team of 13 in New York is led by Neal Sarin as Associate A&R Director (pictured, left).
He tells MBW: “We use Saavn as a platform in the marketing and promotion of our artists as much as we can, but we also try to add as much additional promotion as the major and independent record labels provide.
“We are currently in the process of setting up and building the partnerships that will allow us to do that.
“It’s really about providing a holistic experience for these artists and making them feel like they are part of a family.
“It’s not about tying them down to long term deals, but making them feel like we are here to support them and the independent music scene in India.”
Saavn’s move into A&R started last year after co-founder Paramdeep Singh (pictured, right) noticed an increase in the amount of independent artists who were asking how to get music onto the platform.
“It went from few a day to hundreds a day,” he explains. “We spoke to a lot of our label partners, and found that the industry didn’t really want to work with artists that didn’t fit into the ‘hit’ Bollywood formula.
“Meanwhile, you have all these talented artists that need a way to get their music out there.”
The Saavn team decided to experiment with electronic artist Nucleya, who was the first to be promoted through its Artists in Residence programme.
After partnering with Saavn to promote his album and the later release of an EP, Nucleya saw his stream count leap from a few hundred to rivaling the likes of Justin Bieber on the service.
“Instead of just supporting artists through promotion, we want to help them develop their music and get it out there on economics that are favourable to them, and that they can’t find anywhere else.”
paramdeep singh, saavn
“By December he was on the cover of Rolling Stone India as the biggest trending artist,” says Singh. “We believe that the Saavn platform was a really big part of that entire launch from what we saw with our data.
“After that, we brought Neal on board to develop the programme.
“Instead of just supporting artists through promotion, we wanted to take it one step deeper and help them develop their music and get it out there on economics that are favourable to them, and that they can’t find anywhere else.”
Saavn has 20 million monthly active users worldwide.
Some 18m of those are in India, where it offers an ad-supported and paid streaming service priced at Rs.99 ($1.50) per month. (Within SAARC, most users are monetized through advertising and sponsorship.)
A premium-only tier is available to the rest of the world priced at $4.99.
The service offers a catalogue of over 30m tracks, and aims to cater primarily to a South Asian audience with the Bollywood, Punjabi and Telugu music that it’s secured through partnerships with local labels, as well as English-speaking major and independent label content.
“The South Asian diaspora is estimated to be between 20-25m worldwide, and there’s a second generation audience beyond that too,” Singh explains.
“There is about 4m South Asians in the US, where we have over 1m monthly active Saavn users. We believe that we can convert a meaningful percentage of that into subscribers.”
In India, streaming is growing fast against a backdrop of consistent piracy: according to the IFPI, India’s recorded music business grew by 26.2% in 2016 to US $111.6m, but was only the world’s 19th biggest market.
However, the arrival of smartphones priced under $100 alongside the launch of an India-only 4G network by telecom Reliance Jio is laying the foundation for future growth.
Saavn’s local competitors in India are Gaana, Hungama, Wynk, and the recently launched JioMusic that’s exclusive to the users of Reliance Jio.
“For the first time in five years, we are seeing our subscribers in India using the service more on mobile data connection than they are on wi-fi. it’s an inflection point for streaming services and for Saavn.”
Singh adds: “For the first time in five years, we are seeing our subscribers in India using the service more on mobile data connection than they are on Wi-Fi.
“I would say it’s an inflection point for streaming services and for Saavn. We have seen tremendous growth as a result of that.”
Here, MBW chats to Singh and Sarin to find out what’s in it for Saavn to sign and develop artists – and how the move affects its relationship with traditional record labels whose content it relies upon to function…
You mentioned that you sign artists to deals that are “favourable to them and that they can’t find anywhere else.” What are those deals?
Singh: Our deal with the artist is essentially 50/50 both on the sound recording and publishing. We fund the development and then recoup.
Are you only interested in working with artists from South Asia?
Sarin: We are definitely focusing on South Asian artists. But they could be in India, the UK, Toronto or LA. There isn’t any rule as to where these artists are.
We want to create a home for South Asian artists, and bring in artists that maybe aren’t South Asian to collaborate and create music that’s never been heard before.
How important is language?
Sarin: We are finding the right balance between English, Hindi, Urdu and Telegu. The AO programme is new so we are testing the waters and using the data that we collect, analysing it and learning from it.
It’s really about finding out what our users, who are predominantly teenagers, want. We then base our strategy around that.
It’s like being a lean start up. We’re constantly adjusting and optimising to make sure our records get as much attention as possible.
Signing and developing artists is a role that major and independent labels have traditionally done. How do you ensure that you’re not treading on the toes of companies you have licensing deals with?
Sarin: We’ve been very transparent about it and in my opinion, it’s something that’s imminent. There is a slight shift in the roles of companies in the industry and what they do. I don’t think what we’re doing is a surprise to anybody.
“[Streaming services signing artists] is something that’s imminent. There is a slight shift in the roles of companies in the industry and what they do. I don’t think what we’re doing is a surprise to anybody.”
There is a lot of respect for our partners in major labels and artist development companies. At the end of the day, we’re doing this for the music—to promote Indian artists globally. We want to change the perception of Indian and South Asian artists around the world and give people a voice.
Singh: We were one of the first companies to bring our label partners [in South Asia] online and help them understand metadata.
We’ve been fully transparent with them but at the same time we’re also very open to taking the best of both worlds.
If one of our label partners wants to further develop an artist’s career with us, we are happy to combine what we can both do and create a better outcome for the artists that we’re working with.
What do you make of the notion that there’s very little money to be made from new music and artist development, and that the real cash is in back catalogue?
Singh: The music industry is like a bunch of little breadcrumbs that come together at the end of every month into a loaf. It’s about small amounts of money that are made on each part of the catalogue that creates volume of revenue for the industry.
“The music industry is like a bunch of little breadcrumbs that come together at the end of every month into a loaf. It’s about small amounts of money that are made on each part of the catalogue that creates volume of revenue for the industry.”
Unless you’re putting out Drake’s next biggest hit, it’s fair to say that there may not be a lot of direct revenue as a result of single songs. But from the artist perspective, what results is a fan following, the ability to identify where your fans are and tour in those places. That creates a platform to further build a career.
Despite the fact that we are giving economics that I don’t think anyone has ever really offered to an artist, [streaming] is not necessarily going to be the driver of revenue for their careers. That will come from the platform that the releases create for the artist thereafter.
So what’s in it for you as a business?
Singh: We distribute the content globally, and these artists are only available on Saavn in South Asia. There is a brand halo effect that develops as a result of that.
We saw that last year when we started putting out original audio shows for the first time, and it has further developed now we’re doing the same with music.
Sarin: We live in an age now where artists partner with businesses—whether that’s Frank Ocean working with Chanel, where they created a fun ad with his song [the brand used lyrics from Ocean’s song of the same name for an Instagram marketing campaign]. That’s not a traditional brand awareness tactic, but creates network marketing effects by getting the song out there.
We want to affiliate ourselves with what we believe is the next generation of talent in South Asia, and get these artists to feel like they are part of the family.
They then evangelise the brand but in a very natural way. We don’t have a contract saying, ‘You need to give us this many tweets’. That’s not how we function.
We are here to support careers and when you reach out to artists, and you empower them in a very authentic and organic way that is not contrived, they like that.
In exchange they naturally promote the brand—tell their friends about it and share their songs. Then, when an Artist Originals release gets over a million streams and people are talking about it and sharing, Saavn is the brand that’s associated with it.
“if you have artists out there saying Saavn is great, it really works in our favour. Not just to get more paying subscribers, but to enhance our branding and how people see us as a company.”
If you have artists out there saying Saavn is great, it really works in our favour. Not just to get more paying subscribers, but to enhance our branding and how people see us as a company.
Apple Music launched in India in 2015, and Google Play recently arrived in the territory. Do they have a chance of competing with local services?
Singh: They are both subscription driven services in a market where it’s still early for subscription services in our view. That’s why we’ve been building an ad-supported base over there.
“Apple Music and Google Play are both subscription driven services in a market where it’s still early for subscription services in our view.”
Apple specifically is a very small platform in India. India is an Android driven market and Apple is catering to iOS users. Google is a brand that we don’t think is local and is a brand that isn’t like Saavn, that’s the reality.
What are you future ambitions and plans for Saavn?
Singh: We are continuing to build and innovate on the product, adding more and more features, using AI, machine learning and algorithms to improve our recommendation engines for users. We’re also layering in more elements that makes Saavn more valuable to a user as they spend more time in the platform.
We’re going to continue to build great new audio content with our original shows and Artist Originals, and our subscription push is working well, globally as well as in India.
Saavn is on a path towards becoming a very healthy company from a financial perspective as a result of it.
“Saavn is on a path towards becoming a very healthy company from a financial perspective. we’re excited about the future.”
We’re in a place where market conditions and our overall business strategy have come together to a very good point and we’re excited about the future.
Are you profitable yet?
Singh: Not yet, but a clear path towards profitability is there.
Music Business Worldwide