Last week, Reliance Jio integrated its music streaming business, JioMusic with US-based over-the-top (OTT) music service Saavn, with the combined entity valued at over $1 billion. The deal will see Delaware-registered Saavn LLC become a wholly-owned subsidiary of Saavn India, and therefore, an indirect subsidiary of Reliance Industries Limited (RIL). The transaction means that RIL would acquire an 81.7% stake in Saavn India in exchange for the transfer of its music business to Saavn India. RIL will pay Rs 805 crore ($124.1 million) for the stake.

The deal would see Reliance acquire a partial stake from existing investors, including Tiger Global Management, Liberty Media, and Bertelsmann for $104 million. The combined entity, according to persons aware of the transaction, will operate under the Saavn brand. As part of this deal, Reliance will also invest $100 million. Out of which, to quote from the media release issued on Friday, the “rupee equivalent of $20 million will be invested upfront, for growth and expansion of the platform into one of the largest streaming services in the world.”

$670 million

JioMusic's implied valuation as part of the Saavn merger deal

For Reliance to bet on any business to this extent is a big deal. And in its own way market-altering, setting the stage for India’s own Cola Wars in music streaming.

Thanks to this investment, overnight, Saavn has become the #1 music streaming service in India, pipping Bennett Coleman & Co-owned Gaana, which recently had an investment round of its own led by Chinese tech giant Tencent. If the last available App Annie data (January 2018) is considered, Saavn and JioMusic should have a combined user base of 33 million, ahead of Airtel-owned Wynk with 21 million, and Gaana with 17 million. Saavn also becomes Reliance Jio’s first global product, with a subscriber base among the Indian diaspora in the US and the UK, among others. Saavn, as The Ken reported earlier this month, has been an attractive acquisition target, with global companies such as Apple and Spotify showing interest in it. But that interest went nowhere.

The impact of the Jio-Saavn deal cannot be limited to music streaming. As Jio steps out of its walled garden, 18 months after its launch, there’s more coming. Its 168 million subscribers have had access to the Jio brand entertainment but they are clearly hankering for more. Books. Television shows. Music. Movies. Live sports. Social media. Messenger. They want it all. Conspicuously, Reliance Jio is out in the market with an acquisition wishlist and an endless supply of free cash which perhaps only one other investor can match in this space.


The number of consecutive weeks JioMusic has been India's fastest growing music app for

The Jio shopping spree

Of late, Reliance has been on a relentless Amazon-like content shopping spree.


Venkat Ananth

Venkat is currently in his tenth year in journalism. Prior to The Ken, he was Deputy Content Editor at Mint as part of the newspaper’s digital team. He also wrote in-depth features on the business of sport for the newspaper. His earlier assignments include Yahoo! (as a columnist) and the Hindustan Times, where he began his career. Born in Mumbai, Venkat holds a Bachelor of Mass Media (Journalism) degree from SIES College of Arts, Science and Commerce, Mumbai and a Master of Arts degree in International Studies from Goldsmiths, University of London. He currently resides in New Delhi, where he moved nearly five years ago.

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