It’s Friday, so you know….music apps.
Anyway, Saavn’s party may well be over. For a long time, they’ve enjoyed a fantastic lead over the competition. It could be due to a lack of product differentiation or perhaps it’s just Times Internet’s massive advertising advantage that Gaana has gained a massive 9.4% market share while Saavn’s lost a bit over 5%.
This may not seem like much but remember one thing — in music, more customers = more advertising. Therefore, for Saavn to keep growing they need to keep spending money, for Gaana to keep growing they just need to convince BCCL to print a few more ads.
Since Saavn doesn’t really have revenues to speak of, this means they need to keep raising to keep growing (sound familiar?). Gaana also does not have any significant revenues to speak of, but it does have BCCL. Which as we know can just keep printing ads.
In fact if attrition rates are anything to go by (and they are) then Gaana’s metrics are nearly as good as Saavn’s — a little better if we account for the faster growth.
Is there still room to grow? Yes of course, the reach of both players is still in less than 20% and both are still growing. Gaana is just growing faster than Saavn.
As we noted in a news letter earlier this week, the reach of content apps will continue to grow as new users enter the Indian market. Streaming is the future of the music industry & eventually one or more of these businesses will survive. The question is will Saavn’s investors keep pumping in capital? They need an exit, Times Internet does not. For them this is part of a multipronged strategy to enter the digital future.
Have a great weekend.I had plans for tonight. Now I have a 9am meeting tomorrow.
Thanks for your time,
Ashish
- Team KG
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You can reach me on ashish@kalagato.com
