Times Internet-owned music streaming service Gaana, which leads the Indian market by number of users, recorded a 27 percent drop in revenues to Rs 121. 22 crore for FY19.
According to official filings, losses widened, too, owing to increased promotions and marketing spends aimed at acquiring more users. Gaana’s losses in FY19 quadrupled to Rs 193.2 crore from Rs 46 crore in FY18.
However, subscription revenue, an indicator of a loyal customer base, grew at an impressive 2.4X from Rs 10.8 crore in FY18 to Rs 26 crore in FY19. Paid subscriptions drove about a third of Gaana revenues, while the rest came from online advertising.
The growth in subscriptions coincides with the rising adoption of paid content services in India, with the music-streaming market estimated to reach Rs 3,100 crore by 2020, according to Deloitte. By then, the number of listeners are slated to exceed 270 million.
Earlier, in March 2019, Gaana became the first music-streaming service in India to cross 100 million monthly active users. Prior to that, in February 2018, it also raised $115 million in funding from Chinese internet giant Tencent.
The service competes with the likes of JioSaavn, Spotify, YouTube Music, Apple Music and others in a cluttered music-streaming space. Gaana CEO Prashan Agarwal had revealed that the company is now looking to double its user base and turn profitable in the next four to five years.
By then, it believes, India’s music-streaming market will have about half a billion users, “a majority” of which Gaana is confident of on-boarding.
“As of now, only 10 percent of the Indian population is consuming music online. But it is one of the hottest sectors for advertisers looking to tap into an engaged and primarily millennial audience. As the number of users goes up, there is significant potential for increased advertising revenues on the back of customized branding solutions,” he said.
“We are well-capitalized to fund our rapid expansion slated for the coming months,” the CEO added.