Reliance Industries Limited (RIL) and Saavn, in a surprising turn of events, have announced a strategic partnership for a new media platform which will integrate both JioMusic and Saavn. Valued at roughly more than $1 Billion, the new entity will be headed by Saavn’s co-founders, Rishi Malhotra, Paramdeep Singh and Vinodh Bhat. While the companies didn’t reveal any specific details about the forthcoming platform, Reliance, in a press release, said it will be focusing on “global reach, cross-border original content, an independent artist marketplace, consolidated data and one of the largest mobile advertising mediums.”
In addition to that, the telecom operator will be acquiring a partial stake in Saavn with an investment for $104 million. The existing stakeholders including Tiger Global Management, Liberty Media, and Bertelsmann will continue to retain their balance share. “Reliance will also invest upto Rupee equivalent of US$100 million, out of which Rupee equivalent of US$20 million will be invested upfront, for growth and expansion of the platform into one of the largest streaming services in the world“, added Reliance further. JioMusic and Saavn are two of the most widely used music streaming services in India with the former being at the second spot sustaining over 18 Million users. While JioMusic has grown due to its complimentary services and exhaustive content, Saavn has been betting on originals and exclusives.
India’s music streaming industry has had a lot of activity in the last few months with a slew of overseas players jumping on board. A couple of weeks ago, Tencent said that’s it’s investing $115 million in Gaana. A day later, Amazon made its music platform available in the country as part of the Prime membership. This was followed by Spotify’s CEO confirming an imminent India launch. And today, of course, Reliance went ahead and announced it’s merging JioMusic with Saavn.
Considering the scant details, it’s difficult to comment how this partnership will impact the market. Although, one thing is clear — If Reliance manages to offer the services and original content free of cost, it’s possible Airtel’s Wynk might be finally dethroned. Operator partnerships have been able to drive numbers as clearly visible if we glance over the charts and adding that element to Saavn could just work out. This would also mean the rest of the music OTT services have another obstacle heading their way especially Spotify which is yet to arrive.
Commenting further on the announcement, Akash Ambani, Director, Reliance Jio, stated “The investment and combination of our music assets with Saavn underlines our commitment to further boost the digital ecosystem and provide unlimited digital entertainment services to consumers over a strong uninterrupted network. We are delighted to announce this partnership with Saavn, and believe that their highly experienced management team will be instrumental in expanding Jio-Saavn to an extensive user base, thereby strengthening our leadership position in the Indian streaming market.”
Rishi Malhotra, Co-Founder and CEO at Saavn, said “Nearly 10 years ago, we had a vision to build a connected music platform, dedicated to South Asian culture across the globe. Vin, Param and I always envisioned the company for the long term with an intense focus on products, data, and ground-breaking original content. Our alignment with Reliance enables us to create one of the largest, fastest-growing, and most capable media platforms in the world.”