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BW Businessworld

'Evolving Consumer Needs Bring New Opportunities'

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Internet has changed the entire music industry. CD sales have plummeted in the last few years because of digital downloads. And this is the right time to cash in on digitalisation. In 2009, Saavn, an online music distributor re-launched its website, offering a music library with rights of over two million music tracks of Bollywood and Tamil cinema music.
Saavn is betting big on future and planning expansion including strategic partnerships with Google, Facebook, Shazam, Tata DoCoMo, HTC, Karbonn, Reliance and several other companies in India and abroad. Vinodh Bhat, Co-founder & CEO, Saavn, talked to BW Online about its expansion plans and the profitability of the digital music streaming industry.
Here are excerpts from the interview
Describe Saavn and its journey so far in India
We started Saavn in 2006, initially as a B2B distribution network that brought Indian music and movies to premier digital platforms such as iTunes, Hulu, Netflix, Amazon, YouTube, Time Warner Cable, Cablevision, and Verizon FiOS, among others. In 2009, we shifted our focus to direct-to-consumer distribution, to better serve South Asian music fans.  Saavn is now the largest Indian music service available worldwide on the Web, iOS, Android, and WAP. Everything we do is driven by the passion for music we share with our listeners. Music is such a rich part of our culture, especially Indian culture, and we felt compelled to create a service that was commensurate with that importance and celebrated its vibrance.
There have been several milestones since we started the journey; some of the recent ones include partnerships with tech leaders like Facebook, Shazam, and Firefox, and with telecom operators such as Airtel, Vodafone, and Tata Docomo. 
Most recently, our digital and TV ad campaign ("Here's to the Music") was a tribute to the Indian audience and tothe music that touches everyone's lives - from a baby to the world's biggest superstar. It has been our most challenging (and exciting) creative project to date. We scripted over 30 different scenes, filmed for 12 days, and recorded 5 hours of footage to build 90 seconds that truly capture the essence of love, life, and music.
Which are the areas in India where you see maximum demand/downloads/login coming from and what is the future thrust area of the company likely to be?
Within India, the maximum demand comes from the metros - Delhi, Mumbai, Bangalore, Pune, Hyderabad, Kolkata, Chennai, Ahmedabad, Indore, Noida, etc. We will likely continue to see growth in the metros, especially in those areas where regional content is popular.  In fact, we are making our products language-enabled to answer the growing demand in smaller metros, like the demand for Punjabi content in Chandigarh and other cities in Punjab. 
What is the level of your operations in India as you are a South Asian Company and how important is India as a market?
Our users are split 50-50 between India and outside India (this would include NRIs, members of the South Asian diaspora, and non-South Asian appreciators of South Asian music). Outside India, we have large pockets of listeners in London, New York, Karachi, San Francisco, Singapore, and Toronto. 
India is our largest market, and probably the fastest growing as far as digital consumption is concerned - it's certainly the market where we're seeing the most growth and potential.
How do you select films and songs? Do you pay to the copyright holder? How much do you have to pay them?
We have a dedicated content acquisition team that licenses content from the copyright holders, be it a record label or a publisher. 
What kind of movie songs is available at Saavn?
We currently provide music in 11 different languages, in all kinds of genres, including Bollywood, devotional, ghazals, pop, punjabi and even comedy and dialogues. Our regional cinema selection includes Tamil, Telugu, Punjabi, Marathi, Bengali, Kannada, Malayalam, Gujarati, and Bhojpuri; of course, there is Hindi music; and English/International music (this last one is available for streaming in India only).
India has so many sites to download songs, what is unique about Saavn? How do you differentiate from others?
At Saavn we take pride in doing a simple thing extraordinarily well. We listen to our users at every step to make sure they have the highest level of consumer satisfaction, backed by strong technology.For example, Saavn Pro enables music lovers to enjoy their favorite tunes commercial-free and offline.  
What are your revenue expectations in the Indian market? 
We don't disclose revenue or revenue forecasts
What is your source of revenue? Please explain about your sales strategy for India? 
Our revenue comes fro three sources: Advertising, Subscription and Integration into mobile carriers' data plans. We have a unique advertising model for brands called IMPACT, where one brand gets 100% share of voice on Saavn, with no competing brands or distractions.Our clients include key brands such as Hyundai, Lay's, Pepsi, Samsung, Intel, Sandisk, Vodafone, and Domino's, among others, and we have been sold out for the last six months. Our subscription offering, Saavn Pro,gives listeners ad-free, offline access to their favourite music.  
Last but not least, we work very closely with many mobile carriers and integrate into their data offerings. We have tied up with Tata DoCoMo, Airtel, and Vodafone to offer customised data plans to consumers. We recently announced carrier billing as well - this enables millions of Saavn Android users to access our premium Pro music experience, effortlessly. Previously, Saavn Pro was available only to credit and debit card account holders, but now, anyone with an Airtel or Vodafone account can get Saavn Pro. 
How profitable is the digital music streaming industry?
According to a recently launched study by Mahindra Comviva and Ovum, the global digital music market is set to reach $9 billion in 2014. Over the last decade, consumers have been empowered with both portability and connectivity, and the growth of the digital music industry has been very much connected to smartphone penetration. Evolving consumer needs have brought about a whole new opportunity for digital purveyors - and those who serve their audience properly will be able to win back that revenue lost to rampant piracy. 
How many downloads and logins does Saavn see on a daily basis? 
Saavn Music for Android and iPhone has been downloaded more than 10 million times, and is used by over 10 million monthly active users. 
What is your team size and how do they work?
We have a team of over 70 dedicated professionals in our New York, Mountain View, Mumbai, and Delhi offices, who work very hard and very closely, despite geographic distance and multiple timezones! 
What is the future of digital music companies in India?
Over the last 7 years, the digital music industry has evolved from rudimentary handset personalisation features (such as ringtones and ringback tones) to an immersive, on-demand, curated experience for any gender, age, or geography. We expect further developments in this field to address customisation - so that each listener enjoys a truly personalised experience with little to no effort.