Being listed amongst the largest music services in the world, South Asian Audio Visual Network (Saavn) has been known for its wide catalogue of songs being offered in a unique free listening experience to users across the globe. But moving in step with changing times, the service recently launched its paid subscription model to help sustain the digital music ecosystem in the long run. Having received a positive response initially, the service is now inclined to develop more such products for its users in the long run.

In a quick chat with Radioandmusic.com’s Chandni Mathur, Saavn co-founder, president and COO Rishi Malhotra talks extensively about paid subscription models and the future of digital music services in India and abroad.

Excerpts:

Saavn is currently undergoing a lot of changes. Is this part of your 2013 strategy to stay ahead in the space?

We are always evolving the needs of our users in all the markets we are present in. Innovation needs to be the key in development of content. We are very comfortable taking risks and building great technology for users to enhance their experience with Saavn. Our aim is to stay focused heavily on design, as that is what drives traffic towards a particular service. If you need to capture the user within the first 10 seconds of them visiting their site, you need to have a good design to attract them.

Tell us about your premium service Saavn Pro?

Saavn Pro is our first premium subscription product. I believe that this is the finest product we have ever built. It provides a unique experience for the premium subscribers by giving them an advertisement free environment even on mobile devices. This is just the beginning of our strategy and we will continue to develop more features for the premium service in the near future.

How is it different from the free service? Do you think it will be able to garner as much attention as the free service did?

Free services are very vital in the digital music market. Even for our users, we have kept a free trial of the service. It has been noticed that more people prefer to go for free services rather than paid ones. So the need to develop that ecosystem is now emerging. We understand the balance between free and paid. You need free services for usability and it is also good for the advertisers. Our advertisers like KFC, Bose and more feel free services are very important. Coming back, I feel that once you have free, then later you can slowly introduce layers of paid and you will then have a bigger user base to convert from. We now need to build products keeping both the models in mind.

What kind of a model have you developed for users?

We launched the service on iOS and are working on the Android platform. We are focused towards a single price point of USD 3.99 per month driven by the fact that the content is priced much lower than most other services. Since we have recently launched, the subscription price is restricted but in another six months from now, we will develop more tiered subscription packs.

In terms of the content offered, we provide the same catalogue of songs to our users on pro as are available on the free arm of the service. But the difference between both is that the pro service is devoid of any audio advertisements and features a ‘music only’ environment. It has a high bit rate audio of 128-300. Moreover, the user can use the service anytime and anywhere regardless of the connectivity. This has given us good results in US.

Being an offline and ad free music product, how do you aim to garner revenues from the same?

Our business model is a blend of different revenue streams. We garner revenues from advertisement supported streams along with recurring revenue drawn in from subscriptions.

Do you feel that streaming services will not hold as much tract as download services in the future?

Infact I feel the opposite will happen. Streaming services have introduced unlimited content to users and they will always continue to remain strong in the market. A download audience is always present and I think that both will manage to co-exist in their respective space.

What kind of differentiated content are you offering to users on mobile? What were the challenges in developing this model?

The bulk of our audience is on smartphones and other mobile devices now. So we are also in turn focusing on developing a great experience for them. We chose iOS as the platform to launch on because the payment ecosystem is easier there. There were some challenges we faced in developing this product which included streaming size and the processing power. But Android is very critical to us and we will work on that platform very extensively in the coming months.

Mobile music today has become an integral part of entertainment. Your views

Yes mobile music is indeed very big today with a major part of entertainment being driven towards the platform. Similarly for us too, the first stop is mobile and we are currently focused on building the right technology keeping the change in mind. We have currently added around 50,000 users on Saavn mobile. Apart from that, even content security is very important for us.

On iOS, we currently have a million users, and a triple of that on Android. Our service has witnessed 20,000 installs a day on mobile platforms. We feel that iOS and Apple is building a great ecosystem. This in turn is helping the user base and ad base grow largely and thus, revenues have also grown in time.

What is the market size of mobile music? Do you see growth?

India is a very different mobile music market than most others. Music is a kind of culture in the country. There are around 700 million handsets in India, so that is the size of the market. Yes we do see a huge growth in the Indian market, but it is more about the data plan growth. That is the most essential factor that will determine the kind of results it will post in the future. There need to compatible data plan offers for users, which allow them to access the services efficiently. But inspite of that, we do see a vertical growth in the Indian market.

Do you think digital music services are actually making profit? Where do you see them five years down the line?

Yes digital music services are making good profit. The growth trajectory there is good with the smartphone penetration increasing and data plans also becoming beneficial for the users. We have also witnessed that people spend more than four hours a month on Saavn. We now plan to layer more content for users in the long run and we are on the path to achieve it. Within the next five years, you will see digital music services layering in music videos and films.

With services like Pandora, iTunes and Spotify entering the market what are your views on the music space?

This is an amazing time for music globally. Advertisers are now embracing music, while data plans are also being based well. India is one of the largest markets here and we are proud to have built a good brand there. There are lots of new services that are emerging but the competition is healthy and will in turn only help the digital music platform to grow in the long run. I feel that YouTube is the most competitive service.

But while the music space is largely growing, there are also some challenges on the path to success. Piracy is amongst the most daunting challenges the digital music space faces. It has always been a problem, but it is also a natural indicator of the demand of content. If a service delivers a legitimate experience to users, they will change and stop accessing pirated websites and content. The number of piracy is imbalanced in India and is unfair to the artiste.

Any plans of exploring your music content further through partnerships and more?

We do have important deals which we will be announcing within the next month. Our content partners are very good and we work very closely with them. Distribution is also very important for us and in the long run, we aim to add Saavn to additional platforms like Windows Mobile and BlackBerry 10.

You also recently expanded your catalogue with international music. What kind of growth did you witness since the launch?

We are always aiming to expand our catalogue and want to get in as many tracks as possible in our overall repertoire of tracks. We recently added international music to our catalogue which is currently available only on the web platform. It will soon be available on mobile also. It is very critical for us to provide a great music experience and the biggest global artistes to our users on Saavn. We currently feature tracks in nine languages and are trying to get in more over the next few months.

Tell us about the total number of users on Saavn and how do you aim to further the movement in 2013?

We have over 10 million users across the world and the future is very bright. We have a good user experience and this is just the beginning. We are sure there will be remarkable growth this year. India as a market is also an exciting place right now and music is best here for streaming as well as downloading services.