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  Technology   In Other news  25 Mar 2018  India's Reliance beefs up music streaming service with Saavn deal

India's Reliance beefs up music streaming service with Saavn deal

REUTERS
Published : Mar 25, 2018, 10:46 am IST
Updated : Mar 25, 2018, 10:46 am IST

Reliance will buy a stake in Saavn from its shareholders for $104 million.

Analysts say Jio is betting on entertainment and sports content to boost users’ spend on data.
 Analysts say Jio is betting on entertainment and sports content to boost users’ spend on data.

Oil-to-telecoms conglomerate Reliance Industries is buying a stake in Indian music streaming service Saavn and will merge it with its JioMusic app to create a new entity it said would be valued at $1 billion.

As part of the deal, Reliance will buy a stake in Saavn from its shareholders for $104 million. It also plans to invest up to $100 million, $20 million of it up front, to expand the JioMusic-Saavn combine, both sides said in a joint statement on March 23.

Saavn’s existing investors - including Tiger Global Management, Liberty Media and Bertelsmann — will retain a holding in the new music services, according to the statement. Reliance, controlled by India’s richest man Mukesh Ambani, did not disclose the size of its stake in the JioMusic-Saavn combine, but it said the $1 billion valuations for the merged entity included a $670 million valuation for JioMusic.

Reliance’s Jio telecoms business has been India’s fastest-growing phone carrier since its launch in September 2016. It disrupted the market with discounts and free voice offerings while expanding its library of Indian films, music and TV shows.

Analysts say Jio is betting on entertainment and sports content to boost users’ spend on data. It has agreed on several partnerships by buying stakes in Indian film studio group Eros International and Bollywood production house Balaji Telefilms.

Tags: reliance, saavn, telecom, jio