On 28 February, when Times Internet Limited’s (TIL) music streaming service Gaana, announced its fresh $115 million fundraising round led by Tencent Holdings, it represented an important moment in India’s streaming wars with two distinguishing elements. First, the entry of one of the world’s largest tech companies in the sector. And second, the timing of the announcement: it came in the wee hours of the morning in India, on the same day Amazon launched its Prime Music. The funding round, sources familiar with Gaana say, values the company at $250 million.
Tencent has been exploring investment options in India’s growing digital entertainment sector. Particularly, in gaming. But in music, it saw an easy starting point given its sheer dominance in the space in its home country, China. Under Tencent Music and Entertainment (TME), it owns and controls three of China’s largest music streaming services: QQ Music, KuGou and Kuwo (in that order).
“After the Spotify deal last year, India was clearly on their radar. They were in talks with one other service besides Gaana before they closed the deal in late January,” says a senior executive in a Mumbai-based media company, requesting anonymity as he’s not authorised to speak to the media. The deal assumes more importance since Tencent is expected to spin-off its music and entertainment business through an initial public offering (IPO) later this year.
But beyond the fundraising and the impending IPO, Tencent’s ambitions lie elsewhere: to create India’s first music streaming service with over 100 million users, also one of the major reasons for teaming up with Gaana. It was a decisive first step. In December 2017, Gaana claimed to have 60 million users, making it the largest streaming service in the country, ahead of rival Saavn, which, at the time, had a reported user base of approximately 25 million.
But executives closely involved in several music streaming companies maintain that these numbers are often inflated and that as a thumb rule, the actual base typically is half of what is reported. App Annie data accessed by The Ken for January 2018 revealed that Airtel’s Wynk had 21 million active users, followed by Jio Music at 18 million. Gaana and Saavn, the data showed, had 17 million and 15 million active users, respectively.
Where does it leave Saavn, Gaana’s great rival and once a market leader in India’s music streaming wars?