Airtel to Shut Down Wynk Music After Gaana: Impact on the Indian Music Business

Bharti Airtel to shut down Wynk Music, its music streaming service, ten years after its launch. The decision to sunset Wynk Music and absorb all its employees into the Airtel ecosystem marks a significant shift in Airtel’s strategy in the music streaming industry. This move comes alongside a strategic partnership with Apple, granting Airtel users access to Apple Music and Apple TV+. This article explores the broader impact of Wynk’s shutdown on the music business, its consequences for stakeholders, and insights for Indian music platforms facing market challenges.

Impact on the Music Business

Shift in Market Dynamics

• Wynk Music’s closure is expected to cause shifts in the competitive landscape of the Indian music streaming market. As one of the popular domestic players, its exit may lead to increased market shares for remaining competitors, particularly global giants like Spotify, Apple Music, and YouTube Music.
• The shutdown also highlights the difficulties faced by Indian music platforms in sustaining operations against intense competition from global players who have larger music catalogs, superior technology, and robust monetization strategies.

Monetization Challenges

• Indian music streaming platforms like Wynk, Gaana, and Hungama have struggled with monetization. Wynk’s decision underscores the persistent issue of converting free users to paid subscribers in India, where the majority of users prefer free services over paid subscriptions.
• According to a 2024 EY-FICCI report, India had approximately 185 million active music streaming users, but only about 4% paid for subscriptions. This low conversion rate poses a significant challenge for platforms aiming to achieve profitability through subscriptions.

Consequences of Wynk Music Shut Down for Stakeholders

For Users

• Wynk Premium users will transition to Apple Music with exclusive offers provided by Airtel. This could enhance the user experience by offering a broader music catalog and better streaming quality, but it also means a shift from a free or low-cost service to potentially higher subscription fees.
• Users accustomed to Wynk’s features, such as offline downloads and regional language music, may need to adapt to Apple Music’s interface and service offerings.

For Employees

• All Wynk employees will be absorbed into the broader Airtel ecosystem, mitigating potential job losses. This strategic move suggests Airtel’s intent to retain talent within its organization despite exiting the music streaming sector.

For Founders and Artists

• Artists who relied on Wynk for music distribution and revenue generation will need to explore alternative platforms to maintain their presence and income streams.
• Founders of similar platforms must reassess their business models to avoid similar pitfalls, focusing on sustainable monetization strategies and differentiation from larger, global competitors.

Challenges Faced by Indian Music Platforms

Monetization Woes

• Many Indian music platforms relied heavily on advertising revenues and struggled with the transition to subscription models. The failure to convert free users into paying subscribers hindered revenue growth and sustainability.
• Rising competition from global players with deep pockets and bundled service offerings put additional pressure on these platforms.

Content Licensing Issues

• Disputes with music labels and licensing challenges led to gaps in content availability on platforms like Gaana, frustrating users and driving them to more reliable alternatives.
• To resolve these issues, platforms must secure comprehensive licensing agreements and diversify their music catalogs to retain and attract users.

Lessons for Evolving Music Startups

Adaptability and Innovation

• Startups in the music business must remain adaptable to market changes, consumer preferences, and technological advancements. Innovation in user experience, such as personalized recommendations and exclusive content, can help platforms stand out.
• Collaborations with telecom providers, tech companies, and other ecosystem players can offer synergies and enhanced value propositions for users.

Focusing on Niche Markets:

• Instead of competing head-to-head with global giants, Indian music platforms could focus on niche markets, such as regional music, independent artists, or specific genres, where they can build strong user communities and loyal followings.

Impact on Other Music Platforms

Increased Market Share for Competitors

• The closure of Wynk Music is likely to benefit competitors like JioSaavn, Spotify, YouTube Music, and Apple Music, which can now capture Wynk’s existing user base.
• YouTube Music recently increased its premium subscription prices, and other platforms may follow suit, leveraging their growing market dominance to enhance profitability.

Case Study: Gaana’s Decline

• Gaana, once valued at $580 million, was recently acquired by Entertainment Network India Limited (ENIL) for a mere ₹25 lakhs ($30,000). Gaana’s downfall, fueled by monetization struggles, rising competition, and licensing issues, serves as a cautionary tale for the industry.
• Initially successful with its viral tagline “bas bajna chahiye gaana”, Gaana failed to sustain its early momentum due to over-reliance on advertising revenues and a slow shift to subscriptions.

Airtel’s Strategic Partnership with Apple

Partnership Details

• Airtel’s partnership with Apple allows its users exclusive access to Apple Music and Apple TV+, adding value to Airtel’s premium Wi-Fi and postpaid plans. This alliance enables Apple to expand its user base in India by converting former Wynk users into Apple Music subscribers.
• The integration of Apple Music into Airtel’s offerings could set a precedent for other telecom companies to align with established global music streaming platforms, rather than running their own services.

Future Outlook

As global platforms continue to dominate the Indian market, local players must rethink their strategies to remain relevant. This includes focusing on unique content offerings, competitive pricing, and enhancing user engagement through technological innovations.

Conclusion

The decision to close Wynk Music highlights the complexities of sustaining a music streaming platform in India’s competitive and price-sensitive market. The move is both a strategic retreat and a pivot towards a partnership with a global leader, Apple, indicating a trend where local entities align with international giants to offer superior services. The insights drawn from Wynk’s journey provide valuable lessons for current and future music businesses on the importance of adaptability, robust monetization strategies, and strategic alliances in an ever-evolving digital landscape.