When the satellite radio broadcaster WorldSpace went bust a few years ago, it came as a huge disappointment for lakhs of Indian music lovers who had subscribed to the only paid radio network in the country. Besides being ad-free, WorldSpace offered a slew of genre-based radio channels which literally stood out in a world of commoditised FM channels, spewing out all-too-identical musical content round the clock.
Now, armed with a new business model, a group of ex-WorldSpace executives are looking to revive the service offering after licensing the brand from the new owner (US-based Yazmi).
Mathewkutty Sebastian, former managing director for India and the Middle East at WorldSpace, recalls, “We were literally on the streets when WorldSpace shut down.” But then, he and a few other colleagues had found that the service had not lost its tremendous emotional appeal. Its subscribers, as well as business associates, wanted to have it back and Sebastian decided to find a way to revive the service. Consequently, 80 former employees from the entertainment/content space joined hands and Timbre Media was born.
When asked, why the name ‘Timbre’ has been chosen for a music business, the explanation comes forth readily. ‘Timbre’ is derived from a French word that stands for the characteristic quality of a musical note or sound or tone, produced by a particular instrument or voice.
“As we had always stood for quality and our reputation had also been built by the quality of our music we offered, we decided to name our company Timbre,” says Sebastian, co-founder and CEO of the company. Incidentally, Timbre Media is only using the brand name of WorldSpace and nothing else. There is no connection between Timbre Media and the WorldSpace Radio channel.
“We began Timbre Media with whatever little savings we had. The cash component was pooled by a few senior employees. But a lot of employees, who could not contribute cash, were willing to contribute in kind. Many of them worked for less than the market rate; some helped in getting the infrastructure in place and others helped with the contacts. It was a collective effort and everyone pitched in to help.
“Let me give you a small example of how everybody helped. Initially, it was really tough getting an office space that would be within our budget. We went around the city looking for some suitable space, but couldn’t find one that matched our requirements and fitted our budget. Finally, we approached the landlord of the WorldSpace office with whom we had a good relationship. And he let us use the office space for a couple of months without charging any rent. Later, he settled for a rent which was much below the market price,” details Sebastian.
“In the same fashion, even getting our first client was fortunately an easy task, compared to what the start-ups usually face. Our heritage has been a clear testimony for our projects. Wherever we went, people knew us and the kind of work we had done at WorldSpace. So there was no need to sell your ability and capability to potential clients,” says Sebastian.
However, as far as banks and other financial institutions are concerned, no help is available from anyone. “As much as it is said that banks encourage new companies, they also require paper work, collaterals and various other things, which we could not provide. So, with whatever little money we had, we simply set sail,” recalls Sebastian.
The Bangalore-based firm has just sold 10 per cent stake to Saregama India Ltd as part of a content-sharing and distribution deal that will see the revival of WorldSpace again in India. Timbre is looking to launch the services by the end of September or early October, Sebastian has told VCCircle.
“For us it’s a great tie-up, primarily because Saregama is the oldest and the largest music company in this country and the vast & varied music archive Saregama has is something that no one else owns. It has 100 years of music rights for almost everything – from the national anthem to the latest hits,” explains Sebastian.
The re-launch will start with 40 stations and eventually have as many as 120 stations, including sub-categories, according to a Forbes report. Saregama will also play a major role in marketing Timbre’s services across various platforms and regions.
Timbre’s Plans: Music Across All Digital Platforms
Timbre Media has been positioned as an audio content factory which aims to produce and distribute a number of genre-based radio channels across various platforms in India and abroad.
The company also specialises in programming radio content for corporate entities, FM stations, DTH service providers, telecom industry, armed forces, hotel chains, commercial establishments, retail outlets and, of course, individuals.
According to Sebastian, the company has three focus areas. First of all, it is keen to create a genre-based, high quality radio channel, which is unique, different, compelling, and is available across all possible platforms – DTH, cable, mobile and broadband Internet.
This is good news for users as the music content can be accessed on any platform of their choice. Unlike the previous subscribers of WorldSpace Radio, you need not buy a separate device to access the music. Just choose your platform and the content will be delivered by your platform provider.
But is there a preferred platform for the company – a segment where it is more bullish?
“We prefer all platforms and intend to be bullish across all segments. The new WorldSpace will be streamed through mobile phones, the Internet, cable operators and direct-to-home television networks, as we believe all these sectors are equally important,” says Sebastian.
The second focus area is to provide customised content for the corporate and community radio, and also meet the communication requirements of an organisation.
“Also, Timbre wants to tap the FM segment, where we want to provide our expertise, do programmes, manage shows and give advisory support,” adds Sebastian.
FM And WorldSpace
Recently, the Indian Cabinet has decided to auction 839 private radio station licences across 227 towns and cities, following a second-phase expansion when it had granted more than 200 licences. This is, indeed, great news for Timbre as the company will have further opportunities to provide content. With 880 FM stations operating across the country, the number of listeners is bound to grow exponentially and the FM sector will be a key growth area in the entertainment space in the next 10 years.
Says Ashish Pherwani, associate director and segment champion (radio), Ernst & Young, “I think the auctions were long overdue. If you look at the current presence of FM stations, they are mainly concentrated in tier I cities and the reach is very less. With the new licence auctions underway, it will give advertisers a wider reach at a lesser price, compared to the audio-visual or the print media.”
Once all the licences are sold, the number of stations will increase four-fold to more than 1,000. Although it will take three to four years to launch all these stations, the industry will be able to double the revenues over the time, Pherwani added.
At present, the Indian radio industry (which has 36 operators) tots up a turnover of Rs 1,200 crore a year. Private radio stations contribute Rs 850 crore-Rs 900 crore while AIR accounts for the rest. Radio’s share of the overall advertising spends of Rs 30,000 crore is a little over four per cent. With the implementation of phase III, FM radio will cover 90 per cent of the entire country, an opportunity that no advertiser will probably ignore.
Currently, India’s key FM radio station operators include HT Media Ltd, Entertainment Network India Ltd, Sun TV Network Ltd, D.B. Corp. Ltd, Jagran Prakashan Ltd, B.A.G. Films & Media Ltd, TV Today Network Ltd and Mid-Day Multimedia Ltd.
Timbre, however, does not feel that the explosive growth of FM stations will toughen the competition, as FM caters to a large audience and broadly offers a musical potpourri, instead of focusing on specific genres.
“At WorldSpace, we provide genre-based music, targeting specific listeners. Most importantly, our form of business is subscriber-based unlike the FM, which is advertisement-oriented business”, adds Sebastian.
Growth Plans
When asked about expansion plans and pricing point, Sebastian says that the company is currently in talks with various platform providers, including DTH, broadband, mobile and cable operators. However, the contracts will be finalised in a few weeks’ time and the pricing will be fixed after that. “But everything depends on the type of contract we enter into,” he adds.
The audio content company does not have any plan to raise funds at this point. “We must roll out the service first and then wait for another six months to reach a certain level of maturity. Looking at the developments, we can go in for the next phase of growth and raise capital,” he details.
However, the company has been generating revenues since August last year by rolling out programmes for individual customers and FM stations, besides providing custom solutions to corporate houses and programming & production services to media houses.
Timbre Media currently employs 80 people, all former employees of WorldSpace, and has six studios in Bangalore and two in Mumbai. The company also has teams operating in Kolkata, Hyderabad, Delhi and Mumbai.
The Bottom Line
The one-year-old start-up will bank on nostalgia as a key marketing tool when it launches the consumer services in the next three months, but it will also face the challenge of getting people to pay for something that’s otherwise free.
Timbre’s decision not to tie up the music service to a single platform like the radio has its advantages, but it will take some doing to make people choose other platforms for listening to customised, genre-based music, and also pay for the same.
“In India, majority of the people are cost-sensitive guys and I don’t think they will want to pay fees to listen to the radio,” said a senior executive of the music industry on condition of anonymity.
But Timbre may yet surprise music-lovers with its offerings. After all, WorldSpace did manage to get on board a whole lot of people who subscribes to genre-based and ad-free music channels. In fact, when it shut down at the end of 2009, it had around 4.5 lakh customers in India. So the musical resurrection may very well find a lot of takers when Timbre Media rings in the WorldSpace Radio once again.