Music streaming app Gaana, the largest in terms of market share in India, is eyeing to turn operationally profitable in three years, riding on new user acquisitions.
The platform, which has a 45 million strong library, now has 152 million monthly active users (MAUs). Prashan Agarwal, chief executive officer of Gaana, said he expects this to increase to 165 million by the end of the current fiscal (FY20), and by 2021 Gaana hopes to scale to 225 million MAUs.
Paid users are still a small percentage of the total user base, but are growing rapidly, claimed Agarwal. “We have grown almost four times (in terms of paid subscribers) in the last one year,” he added.
He said both the paid subscription revenue and advertisement revenue were growing at 100 per cent. “We think in the next two to three years, this business will be in the investment mode. Effectively, we are looking at an Ebitda (earnings before interest, taxes, depreciation and amortisation) positive business by 2023.
At present ad revenue is around 65 per cent of total revenues and by 2023 the revenue break-up would be even between advertisement and subscription. Over 90 per cent of users would continue to be on the free tier.
“Four years from now, we expect the market would get to around 600 million users and by that time we expect a 6-7 per cent (or around 40 million) paid subscribers across the ecosystem and we should have the majority of that,” Agarwal said.
Gaana currently enjoys a 30 per cent market share (as of January) according to OTT Audience Measurement Insights, an audience measurement service launched by WPP-owned media measurement platform Kantar and audience measurement technology company VTION.
The Mumbai and Delhi markets are top for music streaming platforms and they are saturating. But beyond these two, the top 20 markets are growing at a healthy clip and so are hinterland markets.
Content available across music platforms are from music labels and are non-exclusive in nature. “We have original content under Gaana originals and at this point the plan is to use this as a tool to acquire customers. The content, however, is not behind paywall. Gaana has till date launched 380 originals in the last two years. And we will continue to launch at a similar rate,” Agarwal added.
Paid users get high quality music, option to download, listen offline, and an advertisement-free experience.
Gaana is investing in technology to build scale for machine learning and recommendation, which powers about 22 per cent of consumption.
“After looking at user behaviour, we curate songs and recommend. This has seen huge success. From a current 22 per cent the idea is to take this up to 30 per cent,” Agarwal added.
Gaana has over 92 per cent brand recall, he said. The platform is also focussing on non-music content like podcasts.