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Guvera’s ad-funded model keeps streaming music free for listeners

Since its India launch in November 2014, Guvera, an ad-funded service from Australia has 6 million users in India thanks to its 20 million odd tracks.

Written by Nandagopal Rajan |
November 1, 2015 12:59:13 pm
Guvera app, Guvera Music app, Guvera music app features, Guvera vs Airtel Wynk music app, Airtel Wynk, Apple Music, Apple Music subscription, Saavn, Saavn music, technology, technology news Guvera music app has over 6 million subscribers in India.

No one pays for streaming music in India. But can you make money out of music without getting the customers to pay. Yes, it seems if we take a cue from Guvera, one of the newer players in the music streaming market here.

Since its India launch in November 2014, this ad-funded service from Australia has 6 million users in India thanks to its 20 million odd tracks. Ananya Amin, Head of Business Development in Asia for Guvera, says his company offers expertise in advertising solutions that let brands make the best out of their service natively.

So on the app you see a lot of branded playlists and events driven by them. “Guvera has always known that emerging markets are not as willing to go for a paid service. So we just focus on the ad-funded and brand-funded model and let brands advertise natively on the platform while the users get free access,” Amin explains.

Even Guvera has a paid Platinum service, but Amin is clear that this is not something he wants to promote in a geography like India at the moment because of the limited credit card penetration.
Amin says the entire ecosystem will grow thanks to the 4G uptake in the coming months.

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“We are seeing a shift in the way people consume data and the content they use the data for. And while video and music top data use, our customers get buffered tracks that consume less data when you are listening to a song again,” he adds. The company promotes branded channels as their “primary- monetisation model”. “It is also a transformative experience for brands and we provide a non-disruptive brand experience,” he says on the channels companies like Maruti Suzuki, Amazon and Harley Davidson, which are using Guvera to reach out to prospective customers.

Guvera app, Guvera Music app, Guvera music app features, Guvera vs Airtel Wynk music app, Airtel Wynk, Apple Music, Apple Music subscription, Saavn, Saavn music, technology, technology news Even Guvera has a paid Platinum service, but Amin is clear that this is not something he wants to promote in a geography like India at the moment because of the limited credit card penetration.

But the story has not always been so good. In its annual report on the digital music industry 2015, IFPI, the global recording industry body, noted that “India continues to underperform, with a market decline of 10.1 per cent”. And they had a good reason to say this. Till the beginning of this year, there was no company that had a decent paid subscriber base in India. In fact, Dhingana, which was the first to bring the hugely successful Spotify subscription model to India, had to shut down in early 2014.

But 2015 seems to be changing India’s music preferences. Everyone from Saavn to Gaana and Airtel’s Wynk now come with paid packages and there seems to be a growing base of users who are willing to pay for the ability to be able to store songs on their devices, better bit-rates and an overall superior experience. And when Apple announced the availability of its radio services in India, there was another surge, thanks mostly to the fact that subscription rates in India were much cheaper than global ones.

Read more: Apple Music to Saavn: The music streaming services that deliver all the right notes

In 2014, the subscription services segment of online music streaming in the US alone recorded $799.0 million, according to MarketResearch.com, and accounted for 73% of the market’s overall value. The remaining 27 per cent would have been from ad-supported streaming. This is the segment that is seeing accelerating growth globally – up by 38.6 per cent in 2014, a significantly higher growth rate than the 16.6 per cent increase in 2013.

Meanwhile, the monetisation push is likely to happen with mobile wallets like PayTM and FreeCharge which will lets users buy a song or an album in one click. The two-step credit card process, for those who have it, often becomes a barrier for impulsive purchases the online space thrives on. Here, services will need to crack the pricing model ensuring that they get a million people to buy a song at a throwaway price in a flash, than get them to make a larger purchase decision.

Globally, revenues from streaming accounted for 32 per cent of $15 billion digital music revenues in 2014, up from 25 per cent in 2013.

Read more: Airtel Wynk Movies app review: An aggregator that needs a good subscription plan

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