Business News Digital Top Stories

Indian streaming service Gaana goes premium-only after acquisition talks stall

By | Published on Monday 12 September 2022


Indian streaming service Gaana has gone premium-only, seemingly after talks with Bharti Airtel, a big tel co in India, about a possible acquisition fell through. It’s a bold move in a market where the vast majority of consumers use free tier streaming services.

Gaana, alongside JioSaavn, is a major player in the Indian streaming market, having gained a significant userbase before the arrival of global rivals like Spotify and Apple Music into the market. Originally launched by Indian media conglom Times Group, the Chinese web giant Tencent has also become a financial backer in recent years.

Reports of a possible acquisition of the service by Bharti Airtel began circulating last month, but that deal has seemingly stalled. And an email from Gaana’s Head Of Content And Partnerships, Sachin Kamble, sent to the firm’s music industry partners last week, seemingly confirmed that that development has caused the shutdown of the platform’s free tier.

According to Reuters, that email said that, because Gaana had not been able to “bring in fresh investments … we are [now at a] crossroads – wind down or find a way to continue … we have decided to give this another try. Hence, we have closed streaming for free users today and [are] moving to paid-only model. We will need your support on this, else we will have to shut down completely”.

Despite that email sounding somewhat pessimistic, a spokesperson for the music streaming firm insisted Kamble’s message has been misinterpreted, telling reporters that “these statements are being read out of context – Gaana is a strong business that is increasing its focus on subscription business with an intent to be a lasting company for years to come”. Meanwhile, Gaana CEO Sandeep Lodha told Reuters by text message that “we are not shutting down”.

For the music industry, premium paid-for streaming has long been the priority, with the free tiers run by various services often seen primarily as upsell platforms, despite efforts by the services to generate decent ad income from their free options. That said, in some markets, and especially emerging markets, the free tiers still dominate in terms of user numbers.

And while there are some in the industry who would like to ultimately see the free tiers much more restricted in terms of functionality – or phased out completely – few would expect such moves to begin in markets like India. So it will be very interesting to see how many of Gaana’s millions of free tier subscribers upgrade when they get a message telling them they now need to pay, and how many simply switch to other services still offering a free option.