India’s oldest Music streaming firm Gaana is leaving no stone unturned to maintain itself afloat. 

A thriving music app till just a few years in the past, Instances Web Ltd-owned Gaana is at present coping with losses, unpaid dues and an unsuccessful seek for traders thus far. 

A potential acquisition by Bharti Airtel, which owns a competing app Wynk Music, final yr rekindled its hope for a while, however the deal fell via. Airtel reportedly supplied $12.6 million or about Rs 100 crore, a steep devaluation of two.5% in comparison with its $580 million valuation in 2021. A seek for traders remains to be on, sources mentioned. 

Gaana was the highest music streamer with 30 % share of streams in India’s music and audio streaming market in 2020, as per a report by Kantar and VTON. 

Now, Spotify, which entered the Indian market in 2019, leads the market with a 26 per cent share of streams (forward of Reliance’s Gaana, JioSaavn, Airtel’s Wynk, Apple Music, YouTube Music, Amazon Prime Music, and many others.), based on a Redseer report in 2023. 

Income, losses and fundings 

Gaana amassed a lot of its viewers in less-populated tier-II, tier-III and tier-IV cities, which the platform has keenly focused with a mix of tiered pricing, regional Indian language content material and user-friendly options akin to voice-based search. It additionally launched a brief video platform HotShots in mid-2020, following the ban on TikTok in India.

The digital music platform has raised over $242 million up to now, together with $40 million from Tencent Holdings in June 2021, as per Tracxn estimates. Tencent, a Chinese language agency, had initially acquired a stake in Gaana by way of a $115m funding within the firm in Feb 2018 which went as much as 34.4% following the June 2021 funding. 

The mum or dad firm Gamma Ganna Ltd reported Rs 126 Cr ( Approx $16 million) of annual income together with losses to the tune of Rs 316 Cr (Approx $35 million), as per its FY22 filings with the Registrar of Corporations, obtained from Tofler. In FY21, losses have been within the vary of Rs 335 Cr. 

Commercial and promotional value in FY22, one of many main expenditures, touched Rs 118 Cr even because it contracted by 24.5%. 

In accordance with the corporate’s LinkedIn web page, it had 150 million month-to-month lively customers (MAUs). Sources mentioned, “The corporate’s revenues didn’t preserve tempo with the rise in MAUs. Whereas the variety of paid subscriptions grew greater than two-fold within the first half of 2020 in comparison with 2019, they accounted for slightly over a 3rd of the entire revenue.”

“It had gone behind a paywall after the setback. Nonetheless, the transfer will not be paying the dividends it anticipated, as revenues, flat for the previous three years beforehand, have remained at nearly the identical stage in FY22 additionally,” a high advert govt mentioned. 

The corporate has misplaced just a few key executives over the previous couple of years. Whereas the CEO of Gaana, Prashan Agarwal, who held the put up for 5 years, stepped down in March 2021, Director Pleasure Basu and Po Shu Yeung resigned in June and Sep 2022. One other director Mitesh Sampat retired in Sep 2021 with none extension. 

Instances Web didn’t reply to e4m queries with regard to Gaana’s devaluation and losses. 

“As of FY22, the Firm’s internet value is absolutely eroded. These occasions and situations point out a cloth uncertainty associated to the going concern of the Firm. The Firm has already taken numerous measures aimed toward bettering the monetary situation of

the Firm, inter-alia, proposed sale of Gaana enterprise enterprise as a going concern on droop sale foundation on a debt-free and cash-free Foundation,” the corporate said in its monetary assertion. 

“The Firm has undertaken numerous value financial savings initiatives to preserve money, which features a full restructuring of enterprise i.e. transferring from an advertisement-based mannequin of income to a subscription-based mannequin, re-negotiation of the phrases of the settlement with all of the labels, and many others. Additional, the Firm has additionally signed an settlement from its Holding Firm Instances Web Restricted of seven,500 lakhs for subscription of optionally convertible debentures Collection B1,” it additional famous. 

“It’s turning into more and more tough for audio streamers to monetise their service primarily because of the rise of different digital platforms akin to ecommerce and quick movies. By way of subscription, OTTA can do little as shoppers will not be able to pay. A lot of shoppers want free audio service akin to YouTube AvoD, Airtel Wynk and Amazon Music which comes free with Amazon Prime membership. Subscription payment can’t go down additional as platforms have to spend so much on royalties. Maybe that’s why Gaana couldn’t scale up its subscription and advert income,” says analyst Karan Taurani.  

A high govt of a world media company mentioned, “Person preferences and consumption habits evolve quickly, demanding fixed innovation and customized content material curation. In the event you fail to handle altering market dynamics, your development could be hindered.”

MX Participant

The video streaming platform MX Participant was initially developed by Karan Bedi in 2011. Bedi is at present the CEO of the agency. 

It was acquired by Instances Web Restricted (TIL) in 2018 for about $140 million. Following the acquisition, MX Participant raised $110 million in its Collection A spherical from Tencent at a valuation of over $500 million, as per Tracxn.

MX Participant noticed important development in recent times, with its reputation pushed by a variety of video codecs, reliability on low-cost Android smartphones, and unique content material choices. It additionally permits its customers entry to dwell cable TV channels and information channels at no cost. 

“At that time, it had an edge over its rivals because it already had a big buyer base, greater than double that of premium streaming providers. As an A-VOD service, MX Participant was in a position to thrive amongst younger audiences who have been eager on viewing video content material on cellphones with out shelling out massive subscription charges.” consultants instructed e4m. 

Nonetheless, it began dropping floor to different gamers akin to Amazon Prime Video and Netflix who invested closely of their content material and on the similar time launched cheaper plans to woo the Indian viewers. Macroeconomic headwinds that impacted digital promoting globally in FY22 got here as an extra blow to the Indian OTT participant.   

Firm’s annual losses mounted to $70 million (approx Rs 500 Cr) over the working income of $36 million and bills touched a whopping $134 million (Rs 1,000 Cr) in 2022, as per firm financials, reported by Inc42.  “This means near Rs 4,500 Cr have been spent in three years, but the enterprise went from dangerous to worse,” an skilled mentioned. 

Like Gaana, MXP additionally noticed exits of key individuals over the previous couple of months akin to COO Nikhil Gandhi and Senior Director and Head of Strategic Partnerships Aditya Jhamb.

The streaming service was placed on block by TIL early this yr. As per newest Comscore rankings, JioCinema’s attain has touched 29.2% in comparison with 22 % of MXP as they occupy the highest 2 and three positions with YouTube being number one. 

“MX Participant was an aggregator of a giant number of gamers, together with information gamers however its valuation dipped because of a spread of causes. First, MX Takatak misplaced steam when Instagram picked up in India. It couldn’t scale up its AVoD enterprise the way in which it was speculated to. Then, different aggregators like YouTube expanded their attain. The surge of JioCinema, which supplied content material freed from value and later streamed IPL as properly, induced an enormous blow to MX Participant,” Taurani factors out. 

In accordance with a latest ET report, MX Participant has signed a content material take care of DistroTV for an in-app integration. DistroTV provides greater than 270 channels worldwide and 180 in India. The event raises hope that MX Participant would regain its market place. 

An e mail despatched to Bedi and Instances Web acquired no response.