India is the world’s most hotly-contested music streaming market at present.
No surprise, then, that some of the biggest music technology companies in the world have launched music services in India in recent months to try and tap into this vast number of potential customers.
Spotify arrived in India in February off the back of a global content deal with the country’s largest homegrown record company, T-Series. March then saw the arrival of the Google/Alphabet-owned music streaming service, YouTube Music.
Yet both Spotify and YouTube music have a lot of catching up to do on long-established local music streaming companies.
At the end of April, Tencent-backed music streaming firm Gaana announced that it had reached a landmark 100m monthly active users (MAUs), claiming to be the first platform in the country to reach the milestone. Days later, MBW reported that sources close to local rival JioSaavn suggested it was actually neck-and-neck with Gaana, with around 104m MAUs of its own.
Spotify remember, had 100m Premium Users and 217m MAUs globally at the end of Q1 – so these were impressive numbers.
(Interestingly, a recent Deloitte report suggested that, in December 2018, there were approximately 150m audio music streaming users in India in total – suggesting some significant consumer crossover between Gaana and JioSaavn.)
“Our merger with Jio has been seismic.”
Rishi Malhotra, JioSaaavn (pictured)
JioSaavn is the result of a $1bn merger which took place in March last year between Reliance Industries-owned JioMusic and decade-old music streaming service Saavn.
JioMusic was itself a subsidiary of India’s second biggest telco operator, Jio – a global rival to the likes of Verizon, T-Mobile and Vodafone. Jio has played a key role in bringing 4G mobile coverage to India, and boasted over 306m customers at the close of Q1 this year.
Saavn, meanwhile, was founded in 2007 – by Rishi Malhotra, Paramdeep Singh and Vinodh Bhat – and attracted investment from the likes of Tiger Global Management, Liberty Media, Bertelsmann, William Morris Endeavor and U2 manager Guy Oseary.
“Our merger with Jio has been seismic, for the market in terms of scale and in terms of our ability to reach users across the country,” says JioSaavn CEO Rishi Malhotra, speaking to MBW.
Today, JioSaavn – majority-owned by Reliance Industries / Jio – runs both an ad-free and a premium tier, JioSaavn Pro, which currently costs just Rs 299 (approximately $4.30) for a full year’s-worth of subscription.
A much-talked about differentiator for JioSaavn is its focus on signing and creating its own original content – i.e. its status as a music streaming service which also acts like a record label.
In 2016, the firm expanded into making non-music Original Programming, creating audio podcasts covering topics that range from Bollywood to comedy, from storytelling to cricket.
Then, in early 2017, JioSaavn also introduced Artist Originals (AO) to release and market tracks and albums by South Asian musical talent. This AO platform is described as ‘the first full-spectrum streaming label and artist platform to develop, distribute and market South Asian talent from around the world’.
Not just South Asian talent, either: earlier this year, JioSaavn ‘signed’ a track, BIBA, created by US superstar Marshmello featuring Indo-Kiwi artist Shirley Setia, hinting at its future ambitions with AO.
Here, MBW asks JioSaavn CEO Rishi Malhotra about the significance of the merger between Saavn and Jio Music, the platform’s focus on original content, its similarities to Netflix’s model and more…
Could you talk about the significance of the JioMusic integration, and of Jio’s power as a telco in India?
Jio has taken digital to the masses, and really connected everyone. Nearly 90% of 4G connectivity in India comes through them.
At last count there were [306m] subscribers [to the Jio network], so that becomes your addressable footprint [with JioSaavn]. It’s very hard to achieve that in a country [like India], so Jio’s scale is enormous.
Music, messaging and social are the three main things that people use these devices for. So our merger with [Jio] creates a local advantage that is pretty tremendous, right?
“Our merger with [Jio] creates a local advantage that is pretty tremendous, right?”
When you couple that with the things that we do really well, which is our platform and our content, and the fact that we have a personalized service, [you] combine the best of both worlds.
The other thing is, India is a group of many, many different regions that have to come together to build those big, cumulative numbers. All of that translates into products like ours; we have to support multiple languages with editorial, with licensing, with everything.
The depth of what we’ve done over many years is really coming to life right now.
Your Artist Originals program is interesting. how do record labels feel about you releasing music and developing artists?
I would look at it this way: we’re doing for music what Netflix did for movies and moving picture. Which is to be an OTT service that works with all licenses, for everybody, our core partners – but we’re also building records and IP that we think is powerful.
The reason that we decided to do that was, really, to create a strategic advantage for us [against other streaming players]. But also because we believed in a lot of content that just wasn’t previously being surfaced.
We [monitor] a combination of [how people are] using our data, as well as our A&R teams [to inform JioSaavn’s artist signings]; we call it Artist Data & Repertoire [AD&R].
We won’t [sign] anybody who’s already on a label; everybody [we sign] is really independent, and in many way looking for a home for their content.
“We’re doing for music what Netflix did for movies and for moving picture.”
[One difference to a traditional label deal] is the way we work with these artists: everything is shared ownership. And we collaborate on all the creative. A lot of services and maybe even labels would not give an artist so much creative control.
Over the last year or so we’ve probably released about 30 records. Many of which have gone to No.1 in [India], as well as gaining international attention. And for 2019 and beyond, we’re taking things a step further.
There are a lot of artists from the US – international artists, very successful, top-of-the-chart artists – who really want to collaborate to build records with Indian producers and with Indian artists.
They’re [US] artists that you would have heard of, and you’re seeing at the top of the charts. So our whole approach to being a creative platform is to enable creators [to fulfil their creative aspirations, while] making sure that they get the economics, that they get the data, and really grow their market.
The core labels will always, always, always be our partners. We are very respectful and work with everyone very closely. What we’re doing with Artist Originals is very unique; very much like Netflix having its own original studio, but in the music world.
Is the notion of music streaming companies doing deals with artists indicative of the traditional label model becoming something of the past?
We’re in a moment where there’s a balance of the two. You have to have, of course, [sign] your core label licenses. We have over 900-plus licenses [in place] and 50 million tracks [on the platform]. [Those licensed catalogs] are going to always [drive] the core percentage of what people listen to.
Yet India has always been a work-for-hire industry for a lot of the artists [i.e. ‘buyout’ copyright deals from labels without future royalty payments]. [The Indian music market] is driven by movie distribution. So over-the-top services like ours create a whole new opportunity for artists.
“We really care about the records that we’re [making]… We’re doing things that we think can be in Grammy contention over the next few years.”
We’ve developed records that have then been reverse licensed into films. It’s just a different starting point in the ecosystem.
The whole point is, creators get an opportunity to get their works shared with the world. We let the content do the talking; we really don’t like to favorite placements and things like that. We let the [tracks] and the playlists do all the work.
We really care about the records that we’re building. We’re doing some things cross-genre and some things that are straight Bollywood. And things that are a hybrid – things that we think can be in Grammy contention over the next few years.
And again, we’re very respectful of the labels. I’m not exactly sure of Spotify’s direct licensing approach, but I believe that involves approaching artists who are already on a label, and that is not something that we do.
Can you talk to us about your recommendation algorithms and your machine learning initiatives?
Sure. [Other services] might be doing similar things with machine learning across their user base – you [monitor] a combination of user history and context and time of day, [which you can use to] deliver preferences for people.
The difference is, our 10 years of machine learning and AI is applied to South Asian content. That’s really, really important. If you’ve got a user in the north listening to Punjabi music along with Hindi music, their home screen and what could surface in their recommendations looks very different than a user in the south. Or a user in Odesk, or a user who might be in New York, or London, or Nashville, Tennessee.
“We never want to give the impression that we’re a ‘one size fits all’ [platform], which a lot of streaming services are.”
We never want to give the impression that we’re a ‘one size fits all’ [platform], which a lot of streaming services are. I won’t say the names. You have a bunch on your phone right now. We want to feel a little more personalized.
We know that we have a very large user base. But the more personal and the more one-to-one the product feels, the better off everything will be from a music perspective.
We’re not a huge company from an [employee headcount] standpoint. But the scale of who we reach is very large.
With 10 years of experience that your company has with machine learning in India, how can the likes of Spotify compete?
First and foremost, I just want to say, we take competition really, really seriously. We respect all the companies that are aiming to bring great services to a user base in India.
The intent [of those product launches] is great and we love that every one of these companies has their own advantages. If you’re Apple, part of the advantage is that you’re in the hardware ecosystem already. If you’re Spotify, you have a great product that internationally has a lot of acclaim.
One of the things that we have, that’s very, very different is that, in addition to our platform and products, competency and prowess, we have a grasp and a knowledge of how to not only deliver all of these variables and the content, but also 10 years of learnings on it.
“We respect all the companies that are aiming to bring great services to a user base in India.”
I mean this respectfully: it’s one thing to be able to achieve 500,000 or a million users in a country. It’s another thing to be able to get to 50 million and 100 million.
At that level and scale, you really have to be very bespoke about how you work with different users on different devices, with different content. You might have users in ‘tier one’ cities like Delhi and Mumbai, who will choose a few languages, which is English and Hindi and Punjabi.
But you’ll have users in a different city who would never choose those three languages, and maybe only want one of their regional languages that’s native to them. That means that you have to cut the product [and] your playlists a little differently.
There’s other layers too. Devotional content is really important to India and South Asian culture, right? So how you treat devotional content in the product has to be very different. You obviously would not put that right next to a pop song.
in 2016 you expanded your original non-music content offering. Can you tell us about how important non-music content is on the platform?
It’s been very important to us. Again, where we’ve taken the approach of really knowing the [Indian] country and the culture very well; sometimes we even say, ‘We’re not in the business of streaming, we’re in the business of culture.’
We’ve built some original programming that’s been very iconic for the country and for the users. [JioSaavn produces and exclusively distributes some of India’s most popular audio podcasts, like #NoFilterNeha, Thank You For Sharing, Take 2 with Anupama and Rajeev, Talking Music and Kahaani Express with Neelesh Misra.]
“Things are a lot more powerful when someone comes to you, and says, ‘Hey, have you watched Bird Box? or, ‘Have you seen Narcos?'”
One of the things that we always wanted to do was be a little bit different than just [relying on] the weight of a media spend.
Things are a lot more powerful when someone comes to you, and says, ‘Hey, have you watched Bird Box? or, ‘Have you seen Narcos?’ You know what I mean?
So that’s what we really aim for. You can’t forecast it, all you can do is build really, really great content make the user base aware of it, and hope that people really galvanize around it.
We spoke a little bit about competition from Spotify’s entrance to the market earlier. Do you see yourselves as the dominant streaming service in india and Has your integration with Jio future-proofed Saavn?
One of the things that is very unique to India is, often data and numbers can be interpreted differently by everybody. You have a lot of people who will announce that they’re dominant, or they have X amount of numbers, etc.
I can tell you from our streaming volume, and from our user base, in terms of the Jio data subscribers, it is pretty safe to say that we are the largest [music] streaming service in the country. But that is not the full story. You can be a large service, but not have all of the advantages that we’re talking about, or all of the depth to your products that we’re talking about.
“It is pretty safe to say that we are the largest [music] streaming service in the country. But that is not the full story.”
You need all of that to have a company that lasts. You used the phrase ‘future-proofed’. You have to always be innovating and always be building differently for the [intra-India] markets.
[I don’t doubt that] we’ll have another new competitor [after] Spotify launching very soon. We’ve always had Apple Music and Google that we’ve competed with, as well as local services.
I would say that, whether it’s Apple or Google or Spotify, when we were a private company [as Saavn] all these companies were far more capitalized than we were. Yet, we were still able to really dominate the user base and the culture and the market.
All of that doesn’t come from just capital – it comes from your approach. And that’s what we’ll continue to do.Music Business Worldwide