It’s looking like 2015 will be a big year for India’s music streaming space. A week after Rdio’s arrival in the country, Saavn — a New York/India startup that was among the first to cater to India — is pushing its credentials after hiring former Google India executive and startup figure Mahesh Narayanan as its COO.
That’s not all, however, Saavn has revealed that it has 11 million monthly active users — that’s the first time that the company has gone public on its userbase in two years. Back in February 2013, it claimed 10.5 million active users, but that was during Facebook’s viral heyday when a number of services rode high with inflated user numbers generated by the social network, only to watch their figures (and businesses) crash as Facebook’s social algorithm was altered to decrease virality.
This time the numbers are for real, Saavn CEO and co-founder Rishi Malhotra told TechCrunch in an interview.
“[Those figures] were [released] almost before companies knew what stats meant. Facebook brought a lot of people into the registration funnel… [but] where we’ve arrived at now is definitive systems to see how many people touched the product each month,” he explained.
Activity-wise, four-year-old Saavn is “approaching” 200 million streams per month, after the volume of streaming increased three-fold during the past twelve months.
Malhotra said that Saavn saw 30 million people use its service in 2014. Last year also marked the first time Android overtook iOS on download figures — according to the Google Play Store, Saavn for Android has between 10-50 million downloads.
Saavn claimed that the number of users paying for its ‘Pro’ service increased 6X in 2014, but Malhotra did not disclose how many are paying versus using the ad-support free version.
The Saavn CEO did reveal that 70 percent of Saavn’s usage comes from inside India, while 90 percent of streaming is on mobile devices.
That’s an incredible data that Malhotra puts down to Saavn’s popularity in India, a mobile first market. To give an idea of how high that mobile rate is, Spotify just revealed that it sees 52 percent of streaming from mobile devices. Saavn is on the next level.
Targeting 100 Million Users
Malhotra said he believes that Saavn is on track to reach 100 million users over the next few years and, with that in mind, the company has brought Narayanan on to move things forward, particularly on the advertising side of its business.
Narayanan spent over seven years with Google India in two separate stints, which included time as the head of its mobile ad business in India. He believes now is the time for mobile entertainment services to surge in the country.
“The smartphone story is real in India. I’ve been talking about it since 2008/2009. At that time, people would literally laugh at the idea of streaming music — but, today, if you look at the growth there are already 100 million users of Facebook, which shows what is possible,” he said.
Narayanan seems to have a golden touch, too. Three of his previous startups have been acquired, with two of those deals happening just 12 months after his arrival — Sociomantic to Dunnhumby/Tesco, and AdMob to Google.
Does that mean Saavn has one year until it will be acquired?
Malhotra and Narayanan both laugh at the question, and insist that they are just starting out on an ambitious plan, but it isn’t hard to see how Saavn could appeal to potential suitors.
Rdio become the first major global service to enter India, but the writing was on the wall when it bought Saavn’s rival Dhingana last year. Dhingana was sold after it shut down following the loss of key distribution deals, but Saavn isn’t struggling and doesn’t appear to be desperate to sell which gives it more leverage.
Saavn raised a new round of funding last year, but it has never disclosed the value of its investments from venture capitalists.
Battling Global Competitors
Rdio was keen to stress its 32 million song catalogue, and position itself as a hybrid international-Indian service. Saavn offers three million songs from India and overseas, but Malhotra stressed that other factors are of greater concern.
“The competition is really YouTube and piracy,” he said. “It’s really good to have streaming competitors in the market… it shows there is demand and people are listening to music.
[But] we have a lot of confidence in the base we have, in some cases we’ll beat the number of YouTube streams for a particular song., for example.”
Rdio CEO Anthony Bay told TechCrunch last week that he believes the company’s free internet radio service will be a major driver that “appeals to many people in India” who wouldn’t ordinarily consider music streaming.
While Malhotra declined to comment too directly on the rival business, he voiced his belief that newly released music is key in India, and services like Saavn’s free tier (which is feature-full but ad-supported) work better than shuffle-based radio services like Rdio’s free offering.
“Around 70 percent of the market is new release-driven, and we feel we’ve built one of the strongest offerings. We’re basing our service on four years of data in building our product, and that gives us a sizable advantage on how to build our product and company,” he said.
With Australia-based Guvera, Line-owned Mixradio not to mention domestic services Gaana.com and Hungama.com completing the competition in India’s music streaming landscape, it will be fascinating to see how things develop this year.
India’s startup scene in general has attracted increased attention from overseas — with Yahoo, Facebook, and (most recently) Twitter making their first acquisitions in the country over the last year. With smartphone adoption growing faster in India than any other country in Asia Pacific, the addressable market for consumer startups is increasing rapidly.
Music has always been a key part of the phone experience — even with MP3s or FM radios on feature phones — and, coupled with surging smartphone sales, services like Saavn could see some serious growth in users this year. That could mean intense interest from potential suitors — such as Spotify — that are yet to enter India.
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