How data is helping India’s oldest music company Saregama revive its fortunes

India’s oldest record label pulled a retro number on the fans of its music last month. In May, the company launched a retro-styled device called Carvaan. It was packed with 5,000 songs and had the charm of the good old radio.
If you end up liking most of the songs on it and if you find the songs the player picks for your different moods are perfect, it’s no accident. There’s some nifty tech and data analytics that’s gone into making it just right.

“It looks very simple from the outside, but some interesting technology has gone into it,” says Avinash Mudaliar, who serves as VP, Product and Technology at Saregama India. (Aside: Carvaan is a play on the karwan in Persian, which is also the root for the word ‘caravan’ in English.)
Before we get into the making of Carvaan and how it is emblematic of the changes afoot at the company, here’s a bit of context. Saregama was the big boy in the era of gramophones, and later in the years of cassettes and compact discs. But music sharing, piracy, streaming, and the internet threatened the future of the company, just like many others in the industry.
“For the longest time, the industry was just moaning saying how digital happened and the industry got destroyed. Piracy did that to us. Now we are slowly learning that digital is a huge positive spin to us,” says Vikram Mehra, managing director, Saregama India.

Saregama’s revenues and profits haven’t dramatically grown in the last five years. Source: Moneycontrol, Company filings

Tuning into data

Around 2014, Saregama said it wanted to sell to consumers directly. In 2015, the company commissioned studies to understand audience behaviour. What was the soundscape like? Were there any underserved niches it could enter?
By 2015, the company added album art as well as metadata to its catalogue, which was now fully digitised. Imagine a company that started in 1901, which recorded the first-ever music track in India, and has a music catalog of over 117,000 songs in 14 languages.
The effort was going to pay off for Saregama. Digitised tracks and consumption data across various channels would become the foundation of a data platform, that is now core to the way the company launches new products.
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“Every time my content gets used, the data shows back. That gives us a great opportunity to make models,” says Mehra. Many of the company’s new launches are guided by data and gleaned by expert curators.

“This marriage of technology and human touch is a hallmark of how Saregama operates now,” said Mudaliar. At the core of every new product Saregama launches is insight driven by data.
Saregama gets data from nearly 134 partners including YouTube, Gaana, telecom companies that offer songs as caller tunes, and the company’s own apps and services. Saregama’s music is consumed through over 1.1 billion consumption points a month across channels and tracks. This data is fed into an analytics software that gives managers an understanding of consumption patterns.

“We used a year of consumption data to create the long list of songs. This unified view was used as the starting point for preparing the list of songs for each channel,” said Mudaliar.
Saregama’s in-house experts then refined these lists to create various bundles for consumers. “Generating the initial long list using data helped bring data-driven objectivity and overcome any risk of chances of personal biases from creeping in,” Mudaliar told FactorDaily.
In 2015, the company revamped its website Saregama.com, to sell “safe and virus free music” for as low as Rs 2 a track. The company also started selling lossless file formats for audiophiles with high end music systems. Earlier this year, the company launched the Saregama Music Store.

To differentiate its content, Saregama looked away from mainstream Bollywood music and focussed on Saregama Classical and Saregama Devotional. This is an area where the company, by virtue of it being one of the oldest players in the market, has a distinct catalog.
It also launched streaming apps with paid subscriptions.
To address smaller cities and rural India, where app and internet penetration wasn’t yet big, the company launched Saregama Music Cards in 2016. These cards were simply memory sticks with music. It was done to reduce piracy.

The Making of Saregama Carvaan

The latest from Saregama is Carvaan, a product that has been in the making for more than a year and is flying off the shelf real quick. The company said it can’t share exact numbers (being a listed company, it is bound by disclosure norms) but said that it was among the fastest selling goods on Amazon and it was having difficulty keeping up with demand.
Carvaan’s music catalog is premised on another one of those underserved niches. Indians aged over 50, who loved to listen to Kishore Kumar and Lata Mangeshkar and the great singers of the past. “Research showed that people in the 50 years-plus age group still yearn for their Kishore, Lata and Rafi songs and are finding it difficult to get access to their old music,” said Mudaliar. The older generation wanted easier ways to listen to music.

The plan was to load the device with evergreen songs, make it simple to operate and also evocative enough when it comes to design. For added measure, the company threw in USB and Bluetooth support. It also plays FM radio.
Over 5,000 songs from Saregama’s massive catalogue were shortlisted with the help of its analytics platform. “We used a year of consumption data to create the long list of songs,” says Kumar Ajit, vice-president of sales and marketing at Saregama. He was previously the head of analytics at dish television operator Tata Sky (managing director Mehra is also a Tata Sky alum).

The device currently doesn’t connect to the internet. While that sounds contrarian in the age of internet of things and music platforms such as iTunes and Pandora, that’s also the beauty of Carvaan. There is scope to take the product experience one level up. “Retro and digital is a very good mix. If it gets married into a model which is self learning (whether connected or not) and auto recommending, I think it’s a killer product,” says Rahul Chari, the founder of mobile payments company PhonePe. Chari launched Flyte, the mp3 download platform for Flipkart, in 2012. Think of Carvaan as a limited Pandora complete with intense curation and self learning algorithms.

An Apple-sque move

It’s not just the packaging of Carvaan that’s Apple-sque. If you look closely, this is smart strategy by Saregama. By now, most music industry players have realised that the battle against music sharing, streaming and piracy is a losing battle. Many of them have started finding ‘adjacencies’ to their core business to expand. For Saregama, its catalog becomes a “complement,” as Harvard Business School professor Bharat Anand describes in his book The Content Trap and Carvaan (or other products that come along) becomes a money spinner.
It’s a move from the Apple playbook. Apple made almost no profits from $10 billion in music sales on iTunes between 2002 and 2013, Anand points out. But that’s not the way to look at it. “Think of songs on iTunes as a standalone product and you’ll charge as much as possible. Think of them as complements and you’ll charge as little as possible. That’s because iPods were how Apple made its money,” Anand writes.

The advent of digital music has also opened up new doors for the company. “The music part of our business has been growing steadily in the last two years it’s all courtesy to digital,” says Mehra, declining to share a breakup of its digital music business. It not only allows the company to penetrate markets that it would have otherwise foregone (think of a Rafi fan in Uganda or a Mukesh aficionado in Russia), but also lets the company mine data to sell its music better. For instance, the data generated by caller ring back tunes from one operator can be used to predict which song will do well on another operator in the same state. Similarly, data helps Saregama create better playlists for its Youtube channel which gets close to 100 million views a month. “You use customer insights to keep improving,” says Mehra.
While it’s yet to be seen how many takers its new products will find, Saregama’s stock seems to be responding well to its complements strategy. Carvaan, it seems, is just the start of a new beginning for the 116-year-old company.
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Update: 15 June 2017, 2.03 PM IST: Updated to change Avinash Mudaliar’s designation as VP, Product and Technology at Saregama India.