Indian telco Reliance Industries is merging its own music-streaming service JioMusic with independent player Saavn, in a deal that it says values the merged entity at more than $1bn.
It’s promising that the resulting business will offer “global reach, cross-border original content, an independent artist marketplace, consolidated data and one of the largest mobile advertising mediums”, with Reliance investing a further $100m to fuel that growth and expansion.
Saavn’s three co-founders are staying on to oversee the business, for now at least, while shareholders including Tiger Global Management, Liberty Media and Bertelsmann have sold their stakes to Reliance, which says it paid $104m for those stakes plus part of the shares owned by the co-founders. The telco claims that the deal values JioMusic at $670m.
Reliance Jio director Akash Ambani said that the merger “will be instrumental in expanding Jio-Saavn to an extensive user base, thereby strengthening our leadership position in the Indian streaming market”, with Reliance suggesting that there’s “a massive addressable market opportunity of more than 1 billion users in India and globally” for the combined businesses.
Saavn co-founder Rishi Malhotra offered similar sentiments. “Our alignment with Reliance enables us to create one of the largest, fastest-growing, and most capable media platforms in the world.”
One piece of context for this deal is the anticipated launch of Spotify in India, possibly as soon as this summer, while Amazon’s Prime Music recently launched there. So there’s an ‘Indian services consolidating to meet the international competition head-on’ angle here. See also the recent $115m funding round led by Tencent for Times Internet-owned Gaana.
Local news site Medianama picked out another question though: JioMusic is only available for Reliance’s mobile customers, whereas Saavn is ‘operator agnostic’ – will that continue? The claims of a billion-strong addressable market suggest that it will.
Meanwhile, the announcement’s mention of “one of the largest mobile advertising mediums” suggests that Reliance sees ad-supported free access continuing to be key to Saavn/JioMusic’s growth, even if premium subscriptions also continue to be part of the package.