Yesterday, telecom operator Bharti Airtel, which once laid claim to being the largest music company in India, pulled the covers off Wynk, a rather impressive, Internet based music streaming service, which, at best, allows streaming of a maximum of 500 songs for Rs 129 per month without data charges. Vodafone had launched its own music streaming service in December 2013. The application has been developed by BSB, a company founded by Airtel’s promoter group Bharti Enterprises. In February 2014, neither Airtel not BSB had responded to an email sent by MediaNama, requesting confirmation about the music service, which had been expected to be launched by March 2014.
Our take on Wynk
1. Violating App Store and Play Store Guidelines?
Airtel allows subscription and purchase of music from within the application. To us, it appears that the company is thus violating restrictions placed by Google and Apple on apps purchased from their platforms.
The Play store guidelines state, regarding in-app purchases:
- Developers offering additional content, services or functionality within another category of app downloaded from Google Play must use Google Play’s in-app billing service as the method of payment, except:
- where payment is primarily for physical goods or services (e.g., buying movie tickets, or buying a publication where the price also includes a hard copy subscription); or
- where payment is for digital content or goods that may be consumed outside of the app itself (e.g., buying songs that can be played on other music players).”
The Apple App Store policy states:
11.1 Apps that unlock or enable additional features or functionality with mechanisms other than the App Store will be rejected
11.2 Apps utilizing a system other than the In-App Purchase API (IAP) to purchase content, functionality, or services in an App will be rejected
11.3 Apps offering subscriptions must do so using IAP, Apple will share the same 70/30 revenue split with developers for these purchases, as set forth in the Program License Agreement
11.13 Apps that link to external mechanisms for purchases or subscriptions to be used in the App, such as a “buy” button that goes to a web site to purchase a digital book, will be rejected
11.14 Apps can read or play approved content (specifically magazines, newspapers, books, audio, music, video and cloud storage) that is subscribed to or purchased outside of the App, as long as there is no button or external link in the App to purchase the approved content. Apple will only receive a portion of revenues for content purchased inside the App
11.15 Apps may only use auto-renewing subscriptions for periodicals (newspapers, magazines), business Apps (enterprise, productivity, professional creative, cloud storage), and media Apps (video, audio, voice), or the App will be rejected
An Airtel executive told MediaNama that the app went through the review process with both iOS and Android, and they reviewed both and approved both. Note that neither App store has carrier billing enabled with Airtel. Airtel might get back to us with more details, and we’ll update then.
2. Almost as open as an Internet service: Wynk is impressive because it lacks the typical product myopia one has associated with telecom operators in the past, which restrict streaming to its own network, with the intent of monetizing usage by the kb or minute, depending on whether it is provisioned over the Internet or mobile. In that sense, Wynk is an Internet service and not a telecom service, because it allows songs to be streamed over WiFi and well as other telecom operator networks (with limits), and incorporates both carrier billing, as well as credit card payments (via a partnership with mobile payments company Paytm, so the Paytm wallet is supported). However, it isn’t as open and the service is built in a manner that it has offers greater open-ness and advantages to Airtel users over other users:
– A “Fair Usage policy” applies, limiting free streaming of songs for non-Airtel users and non-subscribers to 100 songs, with data charges applicable. Beyond that, one has to subscribe. The subscription plans – Wynk Plus (at Rs 29 for Airtel customers, Rs 99 for others on Android and Rs 60 on iOS) allows unlimited downloads. Wynk Freedom, with data charges incorporated, and at Rs 129, limits free streaming or downloading to 500 songs, after which data charges are applicable. On the FUP, in conversation with MediaNama, Airtel executives said that “On average, users end up streaming 30 songs a month. Then we wanted a number that, from their practical point of view, is infinite. 500 is over 10 times the number across apps. We wanted an FUP value to prevent abuse.”
– Wynk Freedom is only for Airtel customers, but that’s an issue for the company will find difficult to resolv, since it can’t bundle data from other service providers.
Therefore, this slide, which they showed at the launch yesterday, doesn’t show the complete picture*:
At the core of this point is how Airtel views itself – as a network access company or an Internet based music streaming company. An Internet company would want to maximise the usage of the music streaming service, independent of bearer network. A network access service like Airtel would want to maximise monetization of usage of its network. We think it’s surprising that Airtel’s research suggests that a user listens to only 30 songs a month.” The limits to free streaming mean that there is room for independent services that focus on offering music. However, credit is due to Airtel for launching a service that is almost as open as an Internet service: it’s a step in the right direction.
3. Mobile dominates music: Airtel has music from most Indian music companies, and the breadth of music that only a telecom operator can aggregate because of the music industry’s dependency on telecom services for revenue. Responding to a query from MediaNama at the press conference yesterday, Devraj Sanyal, MD of Universal Music (South Asia), said that around 65% of their revenues come from telecom operators. Remember that until recently, online music streaming company Saavn didn’t have music from T-Series (via Hungama). Dhingana didn’t have rights to mobile music.
4. The net neutrality issues: It’s hypocritical of Airtel (and by extension, of the COAI) to complain about Internet services (which they refer to as OTT) as services that take core service revenue away from telecom operators, while at the same time, launch an app that is not core to telecom, but competes with Internet services. The COAI has also called for a level playing field, and in that context, we wonder how it is a level playing field when online services do not have the ability to bundle data packs or freely integrate carrier billing, the way like Airtel has done in this case. Among telecom operators, only Vodafone has opened up its API for carrier billing integration.
On these issues, an Airtel executive said: “Our fundamental commitment is to grow our data revenue. We would not have launched this as an OTT if we did not believe that music wasn’t fundamentally about sharing. We believe that music is fundamentally about sharing, the product is significantly compromised if customers from other networks cannot use it. Therefore, we are not saying that we will do an OTT for everything we do. On a case by case basis, if we believe that for the product to be efficacious, needs to work across networks, and is inherently critical for us to drive data growth. This is from our perspective, about making something across networks, so that sharing is enabled.”
5. Wynk may not be Ad free in the future: Airtel is marketing the services, including subscription services, as Ad Free. However, its terms and conditions clearly specify
“ The Service or Airtel’s website may contain advertising content from Airtel or any other third party. Airtel does not take any responsibility of any such third party advertising materials, and will not be liable for any of your actions or purchases or losses that you may suffer in relation to or as a result of any such advertising.”
An Airtel executive said that it’s “ad-free from a banner ad and user experience perspective, and if there is content being promoted, such as films, the policy allows us to reserve the right to do that in the future. But there is really no plan to make it an ad funded service. ” This applies to subscription services as well, and Airtel would consider promoting new movie releases in the services.
Other things to note
– Downloads are not DRM free: The application allows listeners to buy and download songs that they’re listening to, charging Rs 10 per download. The standardization of download charges is useful, and Airtel and telecom operators usually succeed where online services like Flyte have failed. However, the songs come with DRM protection, which inherently restricts transfer of songs between devices. This might curb piracy of music, but it also reduces the propensity to buy songs. Songs available have quality constraints: High Quality (128 kbps), Medium (64 kbps), Regular (32 kbps).
– Hello Tunes integration: This was expected and something that we have argued for in the past. With CRBT subscription fraud (that telecom operators in India were responsible for) having been contained by TRAI’s subscription policies, the integration of Hello Tunes allows Airtel to encourage legitimate subscription. Frankly, Airtel and other telecom operators would do well to integrate Hello Tunes subscription across music streaming services.
– Auto Renewals are available only for mobile operator (Airtel) based billing, since the Reserve Bank of India doesn’t allow auto-renewals for card based payments. Auto Renewals might work, however, with prepaid wallet systems like Paytm, which Airtel has integrated with, or Airtel Money, which Airtel owns.
– Unique identifiers can be inserted into songs:
“Unique Identifiers. Airtel may insert identifiers in the metadata that accompanies the Content and that uniquely identify it as Content you have purchased from us (“Unique Identifiers”. These Unique Identifiers may include a random number we assign to your order or copy, purchase date and time, an indicator that the music was downloaded from the Software using the Service, codes that identify the album and song (the UPC and ISRC) and the origin of the Content, and other such information. Content that includes Unique Identifiers may be marked in the relevant place from where you download the Content. These Unique Identifiers do not affect the playback experience in any way. You may not, and you will not encourage, assist or authorize any other person to, modify, reverse engineer, decompile or disassemble, or otherwise tamper with, the Unique Identifiers, whether in whole or in part.”
An Airtel executive said that “We’re not inserting unique identifiers into the content today, but it could be done.”
*Disclosure: Times Internet, which owns Gaana, is an advertiser with MediaNama