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Vinodh Bhat

Co-Founder & CEO | 18 Sep 2013

We see digital and mobile media as a blank slate. There are parts of online and mobile media where it behaves like television, radio, print, etc., instead of services such as Google and paid search, and we think marketers are starting to understand that you can’t lump digital/ mobile all into one category. In new media, there are sites and services like Saavn that are about upstream demand creation as well as downstream sites and services like Google that convert that demand into sales.

Vinodh Bhat, Co-Founder & CEO Saavn, views the online music industry in one of its best growth phases. Bhat co-founded Saavn in 2007 and managed to bring it among the top digital music service for South Asians globally. He initiated his career 1997 as an Analyst at Donaldson, Lufkin & Jenrette and worked with a number of organisations, including Simile Software and Sportsvite.com.

In conversation, with exchange4media’s Saloni Surti, Bhat chats about the online music industry, its challenges and future.

Q. How has the online music industry changed in recent times?

The digital music industry is constantly evolving and adapting to consumer needs. In many cases, consumers explicitly tell you what they want and in other cases, it is about your team intuitively understanding behaviour and building products for people that ‘wow’ them. Over the last seven years, the digital music industry has evolved from rudimentary handset personalisation features such as ringtones and caller ringback tones to a truly immersive on-demand and curated experience designed for any gender, age or geography.

Piracy oftentimes comes up in discussions around digital music. We believe that piracy is symbolic of a larger problem – existing demand for music is not being met by the available means to consume it. Connectivity on the go, speed, choice, control, convenience, intuitive design, and an overall experience should be on par with the passion that people have for music in the first place.

India is one of the fastest growing markets for digital music, according to the latest International Federation of the Phonographic Industry (IFPI) digital music report, the Indian recorded music market grew for the third consecutive year in 2012, with digital sales overtaking physical sales. As a result of products such as Saavn, digital music has evolved to being mainstream as more and more people prefer its simple, straightforward experience.

Q. How does the royalty model work for the online music industry?

Record labels and artists have lost an incredible amount of revenue to piracy over the years. Our purpose is to help them recover what is not only rightfully theirs, but also to re-invest and grow the overall industry. In our business, we generate revenue from integrating brands into the listening experience and also through individual subscriptions to our premium product. We share a percentage of this revenue with our content owners and then use the rest to cover our operating costs.

Q. What are the major challenges as of now?

Burgeoning piracy is one of the major challenges the industry faces as a whole. At the same time, we believe that piracy is an indicator of demand and consumers are telling us that existing experiences are not simple enough and engineered to handle the many infrastructure challenges in India. Through our laser focus on product, we have started to see more consumers joining Saavn and are beginning to put a dent in global piracy.

In addition, as an advertiser-supported service, we know that consumers are not coming to Saavn because they want to buy a new car, sign up for bank account, etc. They are coming to Saavn because of their passion for music. It was initially a challenge to illustrate how brands could benefit from integrating into the premium environment that we have created. By collaborating very closely with major marketers and their agencies, we have developed the IMPACT model to help them tap the enthusiasm for music and grow their respective businesses. At the heart of IMPACT is integrating brands into the sites and applications while keeping the priority focus on the user experience. By providing 100 per cent share of voice and unique targeting features, brands become a partner to the users enjoying Saavn.

Overall, value creation starts with focus on the user. It is a constant work in progress to balance user needs with those of our advertisers, mobile operators, record labels, and device manufacturers.

Q. What are you doing to keep your TG engrossed?

Saavn is constantly taking measures to improve consumer experience. As a company, we have invested heavily in user experience and will continue to make our technology invisible to the user. For instance, Saavn streams dynamic audio bitrate adjustment for better streaming on any connection (EDGE, GPRS, 3G, 4G and Wi-Fi) so that the user experience is not impacted by changes in network signal quality. Our search algorithms are such that users can always find the music they are looking for, via the proprietary phonetic search that capably understands what a user is looking for, disparate spellings notwithstanding. We roll out updates to our apps almost regularly to fine tune the Saavn experience, based on user feedback and our own observations.

Aside to the consumer experience, we also believe that data is king. We are constantly looking at increasing our library through various partnerships. For example, we have tied up with TIPS Music to stream songs from ‘Race 2’ and ‘Phata Poster Nikla Hero’ prior to the official launch. We have also rolled out some exciting partnerships, one being with Shazam, through which the partnership gives fans of music in India a fast and easy way to find out the name and artist of their favourite tracks.

Curation is also a big part of what we do. In addition to our own themed playlists, our global editorial team works closely with celebrities and other music enthusiasts to allow our listeners to enjoy various collections of music.

Q. Do you have any plans of using gamification tools or augmented reality?

Yes, we always look at new features that enhance the overall experience of listening to music and have a several interesting rollouts planned.

Q. What is the rationale behind the decision to offer music videos and movies?

Music videos and movies are a natural extension of a ‘music-only’ service, especially in the Indian context. As we all know, most movies out of India are musicals, and the option for consumers to also enjoy music videos and movies on Saavn would be make it a comprehensive 360-degree experience.

Q. Which are the major titles you will partner with?

Saavn has partnered with Facebook, Shazam, Twitter, Tata Docomo, HTC, Karbonn and other companies in India and globally to provide music to its listeners. Also, we work closely with major brand advertisers such as Hyundai, Bose, Hewlett Packard, AT&T, Lay’s, Pepsi, and Domino’s Pizza, among others.

Q. How has the advertiser response been to the online music industry?

The Indian advertising sector is rapidly growing, especially in digital and mobile marketing. More and more brands find it essential to connect with their target audience and create excitement and demand for their products and services. Google has captured consumers at the ‘bottom of the funnel’, which is the exact moment they are ready to buy a product or service. It is other media – TV, radio, print, OOH, events, etc. – that create the demand that Google captures. We see digital and mobile media as a blank slate. There are parts of online and mobile media where it behaves like television, radio, print, etc., instead of services such as Google and paid search, and we think marketers are starting to understand that you can’t lump digital/ mobile all into one category. In new media, there are sites and services like Saavn that are about upstream demand creation as well as downstream sites and services like Google that convert that demand into sales.

To date, digital and mobile music have been a missing component in the media mix. Every marketer knows of the popularity and ubiquity of music in India, across all genres, generations, and walks of life. Over 200 brands have signed endorsements deal with major movie/ music stars. From our talks, the biggest fear that brands have is placing their creative assets adjacent to pirated music and exposing themselves to liability. As one of the only legitimate Indian music services, Saavn has created an environment for consumers to have the richest and most engaging experience with the music they love. As a result, we have created an environment that allows brands to create positive connections to their products and services through music.

Q. How has the arrival of mobile changed the game?

Mobile phones, particularly smart phones, have given immense power to users today. Fast processing speeds, intuitive user interfaces, platform stability, and 3G networks have made smartphones multi-faceted communication and utility devices that are always on. Capabilities initially limited to peoples’ desktop computers are now in the palm of their hands.

For the music industry and Saavn, this widespread distribution of smartphones leads to better experiences with music. Companies such as ours that understand media, design and technology are able to leverage smartphones to deliver highly engaging experiences around music.

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