Gaana plans to raise funds for expansion
The move comes just weeks after music streaming service Saavn raised $100 million in fresh funds from venture capital firm Tiger Global
New Delhi: Online and mobile music service Gaana, operated by Times Internet Ltd, is evaluating external funding options to scale up operations, after being backed by media firm Bennett, Coleman and Co. Ltd (BCCL) since its inception five years ago.
“We are evaluating inbound offers for external fund-raising,” said Satyan Gajwani, chief executive at Times Internet, the digital arm of the Times Group. The Times Group has invested $25 million in Gaana till date. Gajwani did not disclose the size of the deal or potential partners.
The move comes just weeks after music streaming service Saavn raised $100 million in fresh funds from venture capital firm Tiger Global. The new investment values Saavn at $300-400 million, according to a Mint report on 8 July. Saavn has raised nearly $126 million till date.
Gaana, which is the No. 1 music streaming app, according to data from Google Trends, managed to race ahead of eight-year-old Saavn within two years of its launch. Gaana has crossed 22 million downloads across Android and iOS and clocked 16 million monthly active users. Saavn, founded in 2007, has 14 million monthly active users, up from 11 million in the first quarter of 2015, and expects to cross 20 million by the end of the year.
“The total user base in this category is still very small. The opportunity is so much larger than where we are right now. In India, most people typically have four to five apps on their phone. WhatsApp and Facebook take the two top slots, music usually comes into this list before e-commerce and that’s what defines the potential of this category,” said Gajwani.
Times Internet is putting its money into building a large product and technology team at Gaana as well as focusing on content acquisition and marketing. Typically, a music app developer in India spends around ₹ 50 crore on content acquisition from music labels such as T-Series to build up their music library. “What’s worked for us so far is our focus on music discovery. We want to help you find music you didn’t know you would like. So we upload lots of content, scroll lots of playlists done by really good curators, we have 10 live radio stations powered by Radio Mirchi (the radio station owned by BCCL), 5,000 automatic radio stations,” said Gajwani. Gaana currently has a library of 10 million songs across Hindi, regional and international music.
According to media experts, both Saavn and Gaana are considered category leaders for music consumption. “This category was on its deathbed five years ago, but the digital environment has got it back on its feet. It is in line with peers in the e-commerce industry,” said Smita Jha, leader, entertainment and media practice, PricewaterhouseCoopers India.
Jha added that venture capitalists would put their money behind music streaming services owing to their large customer base, significant engagement levels and repeat consumption. “Its repetitive consumption and a significant amount of users are also paid customers,” said Jha.
At present, both Gaana and Saavn have locked horns with two new marketing campaigns running simultaneously.
Saavn recently collaborated with Prasoon Joshi and the McCann-Erickson team on “They Listen to Me”, a series of five television commercials that promote Saavn’s social features: “Tag, Chat, Follow, and Share”. This marks Saavn’s first ad campaign simultaneously launched in Hindi, Tamil, and Telugu. “Now airing on key networks across India, the new creatives demonstrate how people of all walks of life are empowered by Saavn through the app’s new social features,” said a company spokesperson.
Meanwhile, Gaana has launched its second ad campaign on 21 June with the tagline “Dil Ka Gaana”. The ad captures and follows a love story between two characters. The song for the campaign has been composed by Amit Trivedi and sung by Ash King and Neeti Mohan.
Though Gaana isn’t profitable at present, it aims to reach over 150-200 million users in the next few years. In the coming weeks, Times Internet is likely to launch new product features on the app to make Gaana more accessible, added Gajwani.
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First Published:24 Jul 2015, 12:15 AM IST
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