Amazon turns up the volume in the Indian digital music space

Now streaming.
Now streaming.
Image: Reuters/Francis Mascarenhas
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India’s digital music scene is having its moment.

Over the last one week, India has seen at least two international e-music majors step up their game, while a local one has raised fresh funding.

On Feb. 28, the world’s largest e-commerce company, Amazon, launched it’s ad-free streaming service, Amazon Music, in India. The service, available on both Android and iOS, boasts a catalogue of tens of millions of songs in English, Hindi, and several regional Indian languages like Punjabi, Tamil, and Bengali.

On the same day, Chinese internet giant Tencent led a $115 million funding round for the Times Internet-owned music streaming platform, Gaana. While Tencent already backs India’s leading startups Ola and Flipkart, Gaana is the current industry leader with over 60 million monthly users.

And just a day before these announcements, there were reports that Swedish digital music company Spotify had set up an office in Mumbai last year. The firm revealed having employed over 300 persons in India.

The heightened activity has only fuelled the boom further in the space. Several Indian e-music companies have attracted global investors in the last couple of years. For instance, in 2015, Saavn secured $100 million in a round led by Tiger Global while Xiaomi led a $25 million round for Mumbai-based Hungama the following year.

Aside from domestic music streaming firms and international brands, India’s big telecom players like Reliance, Airtel, and Vodafone, too, are launching their own services.

“Music streaming has lagged the video market uptake in India. That’s counter-intuitive since music uses lesser bandwidth than video,” Yugal Joshi, vice-president at Texas-based consulting and research firm Everest Group, told Quartz. “But now digital streaming is starting to get its due attention. People who matter have realised it is a market they have to invest in.”

Amazon versus the rest

Amazon, the latest entrant, believes it is well-poised to dominate the market, courtesy four years of learnings from the US market, where the service launched in 2014, and the 28 other markets where it’s now available.

“We think the curve is going to be steeper in India, the adoption will be really quick,” Sean McMullan, director of international expansion at Amazon Music, told reporters during a press conference in Mumbai.

But each of the other contenders in the space have been present in India for a while. Saavn began operations in 2009, Gaana began streaming in April 2010, Hungama launched its app in 2013, and even Apple Music has a nearly two-year headstart.

“Amazon and Apple, who have their own ecosystem and die-hard fans, are largely safe. The Indian guys that don’t have the same brand presence may face challenges. But then again, most of these are backed by companies with deep pockets,” Joshi said. “This is not a market for 10 players. But when the consolidation happens, it’s too early to tell.”

The likes of Gaana and Saavn are already going big on launching originals, giving new talent a launchpad. Although Amazon did create original content for its video platform, it has no such plans for music yet.

It could still gain an edge in the price-sensitive country, though.

The music service is thrown into the mix for Prime members at no additional cost. For the Rs999 ($15.33) annual membership, which already includes free two-day shipping and on-demand video content, users can now stream music as well. Compared to the over Rs1,100 annual subscription of its pure-play music rivals, Prime’s offering gives users far more bang for their buck. Bharti Airtel owned Wynk is free for Airtel customers but costs Rs120 monthly for others.

Moreover, Amazon is entering the fray with an impressive catalogue, thanks to the plethora of partnerships it has inked with major labels—T-Series, Zee Music, Warner Music Group, Times Group, Sony Music, and Tips Music—in the months leading up to the Music launch.

And not to forget its regional push. Local-language content has already helped Amazon win over India’s Prime Video audiences and its approach to Music is no different. ”You have music talent performing in multiple Indian languages,” Sahas Malhotra, director of Amazon Music India, said, giving the example of artists Shreya Ghosal and A R Rahman. The platform has music spanning geographies and time. As algorithms learn a user’s preferences, their recommendations get more nuanced accordingly.

“It’s still day one for us,” Malhotra said, echoing a phrase often used by Amazon CEO Jeff Bezos. “We’re going to get a lot more information (as people use the service) so we’ll keep refining this experience.”

For all digital music players, the draw towards India is big since the number of online music users in the country is rapidly rising. The population of listeners was an estimated 27 million online in March 2015. By March 2020, this figure is expected to surpass 270 million, consulting firm Deloitte said in its “Digital Media:Rise of On-Demand Content“ (pdf) study.