Reliance Industries (RIL) will make investment as part of its strategy to combine Saavn, a global music OTT platform, with its digital music service, JioMusic.
The value of combined entity is over $1 billion, with JioMusic’s valuation touching at $670 million. RIL will develop the integrated business into a digital media platform targeting global reach, original content, an independent artist marketplace, consolidated data and mobile advertising medium.
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Spotify, which is going for NYSE listing, had 157 million active users as of Dec. 31, including 71 million paid subscribers who access ad-free versions of the service.
Apple Inc’s streaming music service has 38 million paid subscribers.
Amazon.com, Alphabet Inc’s Google and others are in the global streaming music business.
Amazon Music Unlimited has about 16 million paid users. It offers access to about 40 million songs to its Amazon Prime members for about $8 per month, and about $10 for non-members.
Akash Ambani, director, Reliance Jio, said: “The investment and combination of our music assets with Saavn underlines our commitment to further boost the digital ecosystem and provide digital entertainment services to consumers over a strong network.”
RIL will also invest up to $100 million for expanding as the music streaming services in the world. The company will continue to operate the over-the-top media platform available on all app stores.
Rishi Malhotra, Paramdeep Singh and Vinodh Bhat, the three co-founders of Saavn, will continue in their leadership roles and will drive growth of the combined entity.
RIL is acquiring partial equity stake from the existing shareholders of Saavn for $104 million, while these shareholders retain their balance stake. Tiger Global Management, Liberty Media and Bertelsmann, among others, are the shareholders of Saavn.
The deal will combine the streaming media expertise of Saavn with the connectivity and digital ecosystem of Jio. Reliance Jio is the largest 4G telecom operator in India with nearly 170 million 4G subscribers.