Reliance Industries to merge Jio Music with Saavn, create $1 B music-streaming platform
The combined entity will take on the likes of Gaana, Amazon Prime Music, Apple Music, Wynk, and the soon-to-be-launched Spotify in India's fast-exploding music-streaming space.
In what is possibly the biggest transaction in the Indian music-streaming market so far, Reliance Industries has inked a strategic deal with New York-based music-and-artiste platform Saavn to merge its own digital music offering, Jio Music. The deal is valued at $1 billion, with Jio Music’s implied valuation at $670 million.
Reliance will acquire partial stake from Saavn’s existing investors, Tiger Global, Liberty Media and Bertelsmann, at an investment of $104 million. It will put in an additional $100 million to make the resultant entity, Jio-Saavn, a top music-streaming platform globally, Reliance said in a statement.
Of the $100 million, $20 million would be invested upfront, and Saavn co-founders Rishi Malhotra, Paramdeep Singh, and Vinodh Bhat would continue to “drive growth” in the new entity.
“The integrated business will be developed into a media platform of the future with global reach, cross-border original content, an independent artist marketplace, consolidated data and one of the largest mobile advertising mediums,” the companies said in a joint statement.
Akash Ambani, Director, Reliance Jio, said:
“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.”
Saavn’s strong presence in nearly 200 global markets (it is the only streaming service to feature in the Top Grossing App charts in India, US, UK, Canada, UAE and Singapore) coupled with Reliance Jio’s expansive network in India is a handsome combination.
While Saavn is a veteran in the music-streaming space with tens of millions of songs and thousands of artistes on its platform, Jio Music has been the fastest-growing music app in India, notching up millions of listeners who can access its content for free if they have a Jio connection, which is rather ubiquitous in itself. Jio has also signed up several international and Indian music labels (across 20 languages) to distribute their music.
With a massive addressable market size of over 1 billion users in India and globally, Jio-Saavn plans to “invest aggressively to accelerate growth that would benefit all aspects of the ecosystem, including users, music labels, artists and advertisers.”
Rishi Malhotra, Co-Founder and CEO of Saavn, said:
“Nearly 10 years ago, we had a vision to build a connected music platform, dedicated to South Asian culture across the globe. We always envisioned the company for the long term with intense focus on products, data, and groundbreaking original content. Our alignment with Reliance enables us to create one of the largest, fastest-growing, and most capable media platforms in the world.”
Jio Music and Saavn have come together at a time when global internet behemoths like Amazon and Tencent are taking giant strides in the domestic audio-streaming space. Amazon recently rolled out its Prime Music service to Indian users, while Tencent Music invested $115 million in Saavn-rival, Gaana. Last week, music-streaming giant Spotify too confirmed that it would be launching soon in India.
Besides global players, that also include Apple Music and Google Play Music, there are popular homegrown services like Wynk, Hungama, Eros Now, etc. Music-streaming revenues from India are projected to cross Rs 3,100 crore by 2020, according to Deloitte. There are now more legitimate listeners of digital music than ever before. The market too is tailored for consolidation and disruption like never before.
Pankaj Makkar, MD, Bertelsmann India Investments (Saavn investor) wrote in an email to YourStory:
“India’s digital media segment is undergoing a massive transformation. I am confident that Jio’s increasing telecom and internet market share, coupled with Saavn’s leadership in the digital content space, will redefine media and digitainment for a New India.”