After the failure of acquisition talks with Airtel recently, Times Internet-owned music streaming platform Gaana had gone behind a paywall completely. That is clearly not paying the dividends it expected, as revenues, flat for the past three years previously, have remained at virtually the same level in FY22 also.
In FY22, Gaana’s revenue from operations remained flat and stood at Rs 118.53 crore from Rs 117.88 crore in the previous fiscal year (FY21), according to its annual financial statement with the RoC.
Advertising income was the largest source of revenue for Gaana which increased 15.7% to Rs 78.16 crore in FY22 from Rs 67.57 crore in FY21. It also provides subscription services for ad-free streaming of songs and podcasts which shrank 7.8% to Rs 24.02 crore in FY22.
Income from service platform fees was reduced by 39.9% to Rs 14.58 crore in FY22. The company’s income from Interest on fixed deposits decreased 34.7% to Rs 7.75 crore in FY22, pushing the total revenue to Rs 126.3 crore.
On the cost front, content was the largest expense for Gaana which accounted for 41% of the overall cost. This cost decreased 5.7% to Rs 181.78 crore in FY22 from Rs 192.78 crore in FY21.
Advertisement and promotional cost was the next major expenditure for the music and podcast streaming application even as it contracted by 24.5% to Rs 118.8 crore in the last fiscal year (FY22).
Employee benefit expenses and IT infrastructure costs were up by 11.5% and 115.3% respectively to Rs 57.14 crore and 12.1 crore in FY22.
Gaana has an agreement to share services with Time Internet Limited under which it receives services related to management functions, IT support, hosting, bandwidth, helpdesk and more. The company added Rs 33.6 crore as the cost of shared services which pushed the total expenditure to Rs 442.3 crore in FY22.
With a saturated scale and almost the same expenditure, losses of the company contracted 5.7% to Rs 316 crore in FY22 from Rs 335 crore in FY21. On a unit level, Gaana spent Rs 3.73 to earn a single rupee in FY22.
Gaana has raised over $200 million to date and as per Fintrackr’s estimates, the company was last valued at $530 million when it raised $50 million from Tencent in 2020.
Much like the OTT apps like Disney Hotstar that discovered a significant market by tying in with telecom providers, even if at a discount, music streaming apps like Gaana too need the ride piggyback on telecom networks to get reach and paid subscribers. Competition at the top end has only got tougher, with Spotify also available in the country now. With Airtel pushing its own Wynk app, Jio having Saavn, and even Vi having a tie-up with Hungama Music, Gaana certainly has its work cut out to crack the market for its growth.