Over-the-top services or third party apps such as streaming apps and messaging apps have been a nightmare for telecom operators globally. India has been no exception and we have seen the growing frustration of Bharti Airtel - the largest cellular service provider in the country. First the telecom operator pushed the TRAI to formulate regulatory framework for messaging apps like WhatsApp and later it managed to convince them to do so. Thankfully the proposal has been pushed aside.
To compete with the OTT services and meet the growing data consumption demands of the users in the country, Airtel said it is targeting six categories including social networks, video, music, gaming, e-commerce and travel, where it would look to develop its own products. Working on this strategy the company recently launched its first cross operator product in the form of music streaming app Wynk wherein customers of all telcos can access over 17 lakh songs in eight languages, reports ET.
In doing so Airtel says that it has become the first operator to introduce a OTT mobile application in the domestic market, which will work across all mobile players enabling customers to stream and download songs. Interestingly Vodafone had launched its own music streaming service in December 2013 powered by Hungama’s platform.
Airtel states that the ad free version of the app lets users stream songs online and tune into internet radio. With Wynk Plus, users can enjoy unlimited in-app song downloads and play music offline at Rs. 99 on Android and Rs. 60 on iOS. Airtel customers using Android phones can have an introductory price of Rs. 29 on this.
Wynk Freedom subscription at Rs. 129 is available only to Airtel customers in 3G circles using Android phones which allows them to get all-inclusive unlimited streaming and download of music without incurring additional data charges. Airtel customers can pay for all purchases on the app using their Airtel balance or bill. Other customers have the option to pay using online banking.
Indian mobile users data consumption is driven by entertainment with music driving the most data usage. Airtel being the leading operator in India wants to capitalize on this but does it really make sense to launch a streaming app in a market which is already bleeding?
This leads to two primary questions:
1. Isn’t partnering with existing streaming players a better solution?
Bollywood music streaming business has been the bleeding sector. Last year we saw Bollywood music streaming startup Dhingana closing down and later on being acquired by Rdio. Flipkart shut down Flyte since it wasn’t driving required returns.
This leaves us with two major players in the streaming business - Gaana backed by Indiatimes and Saavn. Gaana, while featuring music in 21 languages - Hindi, English, Telegu, Tamil, among others, has a catalog of more than 3 million songs. Last year Gaana had partnered with the South Indian Music Companies Association (SIMCA) to acquire music from 79 regional labels which gave the firm access to over 55,000 songs covering film, Carnatic and popular devotional music in Kannada, Malayalam, Tamil and Telugu languages.
Saavn (acronym for “South Asian Audio Visual Network) has rights for 3 million tracks. The firm recently added 800,000 tracks from international artists to its catalog via licensing agreements with Warner Music and EMI.
Both the companies have a strong grip in the streaming business in the country with a strong technology backing the services across all available platforms.
Rather than creating competition in the market, wouldn’t it have made more sense for Airtel to have a partnership with the existing players user base. Definitely Airtel will package the offerings in a lucrative way but right now it isn’t offering anything out-of-the-box in comparison to its competitors, neither in quality nor in price.
While the app is ad free right now, my belief is that it is an introductory offer. In fact the Android pricing of Rs. 99+ data is an introductory offer too. Medianama reports while Airtel is marketing the services, including subscription services, as ad free, its terms and conditions clearly specify that, “The Service or Airtel’s website may contain advertising content from Airtel or any other third party.”
However, an Airtel executive has stated that there is really no plan to make it an ad funded service. What could happen is that the company may push sponsored content related to its offerings which wouldn’t be that bad after all!
With the consumer being the smartest lot, it would be interesting to see if it is ready to switch to Wynk which is in its initially days but already labelled as the largest Indian and international music destination.
2. Will other operators follow?
Vodafone has already done it but will other operators like Idea, Reliance, Aircel, etc. follow suit. Messaging, the most talked about of all OTT services, has witnessed continuous partnership with telecom operators.
Airtel also states that where products already exist, the company would support it, distribute it and where is doesn’t exist, it will build its own. Interestingly it developed its own music streaming app when the market already has a few. In the near future it is being said that Airtel may also introduce video. E-commerce is other area where it wants to play a larger role. Wonder if it is also planning to launch its own messaging app in the near future to compete with WhatsApp in India.
With India being the actively growing smartphone market operators might think that building their own products could be a lucrative plan. But rolling out a robust product and holding users for their offerings beyond lucrative data packages would be a challenge. We will have to wait and watch the move that other operators in the country take.
Wynk is in its early days, while Airtel is looking for competitive packaging, data consumption rates for 3G and 2G services are still heavy. Besides the quality of songs on mobile kill the experience for a music listener. Right now high quality songs are only of 128 Kbps. Which leaves us with a big question mark on Wynk’s success going further. Only providing for a huge music library and easy billing won’t be enough for motivating today’s smart consumer to switch to your product.
Wonder if the large music labels are also going to jump into the streaming market which is yet to make profits globally?