Music streaming apps turn to podcasts, video content to supplement revenue
Executives in the business say music streaming apps run on similar and fairly limited content because of which they are diversifying and exploring other streams of revenue
Last month, music streaming service Gaana partnered with Radio Mirchi 98.3 FM to offer two of the latter’s famous radio shows, Mirchi Murga and Hansi ke Phuwarey, on its online platform. Radio Mirchi is the FM service operated by Bennett, Coleman & Co. Ltd (BCCL)-owned radio broadcasting unit Entertainment Network India Ltd. BCCL also owns Gaana through Times Internet Ltd.
Music label Saregama Ltd, which runs music apps Saregama Classical, a classical music offering, and devotional music service Saregama Shakti, has also been expanding its original content library by launching a festive series of devotional songs and videos. It has added about 6,000-7,000 videos on Saregama Shakti in the past four months.
In April, music streaming service Saavn LLC launched nine original audio shows on its app and website and announced plans to launch video content as well.
Increasingly, music streaming apps are including content such as podcasts, audio talk shows and videos in an attempt to offer differentiated content and open up new revenue streams.
“There is a concerted effort from our side to bring more and more unique audio content for the listeners. The intent is to offer diverse content to customers. The engagement level goes up and we are able to monetize well,” said Prashan Agarwal, chief operating officer at Gaana.
Launched in 2010, Gaana claims 20 million active users a month and has a music library of about 13 million songs. Gaana has also been in talks with BCCL-promoted youth-centric television channel Zoom TV to expand its audio content library, which currently includes shows like The Asha Verdict with Asha Bhosle, a music review show by the singer, and a comedy show called Sit Down Comedy with Rajneesh Kapoor.
Vikram Mehra, managing director at Saregama India, said the company was expanding its content library on both apps. “We started our classical platform as an audio platform, but we have now moved onto videos as well. As for Shakti, we have been focusing on videos,” said Mehra.
Saregama Classical was launched in 2015, while Saregama Shakti was launched earlier this year.
Executives in the business say music streaming apps run on similar and fairly limited content because of which they are diversifying and exploring other streams of revenue. Moreover, audio talks and video content allows brand integration, which fetches higher advertising rates or can easily be placed behind paywalls as premium products.
Music streaming apps have two revenue models—they charge a monthly fee for some content; while for others, they serve ads to non-paying customers and generate advertising revenue.
Digital music streaming is not a viable business because of expensive music royalties in India. Music companies charge Rs10-25 crore a year for access to their music libraries.
Hungama Digital Media Entertainment Pvt. Ltd, which has limited its original content to live music show videos, artistes’ performances and interviews, charges Rs99 per month for its video content.
As for audio content, “there are brands that associate themselves with that content and integrate with specific shows or playlists”, said Siddhartha Roy, chief executive of Hungama, which claims a total of 68 million subscribers.
Similarly, Gaana and Saavn have placed some of their original content behind a paywall while ad rates for some shows have a premium attached to them.
Saregama operates on a subscription model. “We have a specifically curated content for the listeners and viewers. That’s why we try to give an unadulterated experience,” said Mehra. For Saregama Shakti, the company charges a subscription fee of Rs30 per month. It charges Rs100 per month or Rs1,000 per annum for Saregama Classical.
“The audio and video content opens up new revenue streams for the applications, considering that music is a substitutable genre. Without original content, all applications are the same,” said Jehil Thakkar, head (media and entertainment) at consulting firm KPMG, adding that original content helps the music streaming apps to integrate brands in their shows.
According to media buyers, it is a logical expansion for music streaming apps because they are still in the investment stage. “There is a big change happening in the way media is consumed with the increase in broadband penetration. The trend is clear that there will be a lot more audio and video consumption in the coming months. Revenues will turn up in the times to come,” said Ashish Bhasin, chairman and chief executive, Dentsu Aegis Network South Asia.
Bhasin added that the digital market is growing three times as fast as the overall market. “Listenership, viewership and readership is moving towards the digital space. It is nascent right now, but the overall industry is growing.”
Digital advertising is expected to touch Rs25,500 crore by 2020 from Rs6,010 crore in 2015, with a shift towards video and mobile advertising, according to a report titled The Future: Now Streaming by KPMG and lobby group Federation of Indian Chambers of Commerce and Industry.
HT Media Ltd, which publishes Mint, competes with Bennett, Coleman & Co. in some markets.