Managing director, Saregama India
In an era of Netflix, Gaana and YouTube, where keywords like chord cutting and artificial intelligence rule the roost and where marketers are frantically rushing about trying to find the next best thing for millennials, here is one company that is walking a different path. The fact that new technologies come and wipe out older ones has not affected it one bit as it went back in time and unleashed a portable digital music player ('digital' being the concession to technology) that is taking the older generation by storm.
In May of 2017, Saregama India launched Carvaan, a music player for the older generation with 5,000 preloaded songs from the past. In just five months it became the talking point between generations. In Carvaan the young found a perfect gift for the older generation. The inclusion of Bluetooth and a USB port meant that the former also looked at it with interest. The most interesting point with Carvaan is this: the songs play in shuffle mode with no option for the listener to search and select a song they want. Available in two variants (at Rs 5,990 and Rs 6,390), the product offers a lean-back-and-listen experience to the consumer compared to a more hands-on role that consumers are used to in this digital age.
Going retro, the player has three buttons classified by artist, mood and a collection of 50 years of Binaca Geetmala, Ameen Sayani's highly popular show of the 60s and 70s. Saregama (formerly HMV) sold 95,000 units of the Carvaan between launch day and September 2017 (roughly Rs 57 crores in value terms). It hopes to sell 100,000 units every quarter in this financial year - which means that its October-December sales could touch Rs 60 crore. Extrapolating this estimate would mean that Saregama's sales from Carvaan alone would be close to its top line of Rs 182 crores three years ago.
Our afaqs! reporter spoke to Vikram Mehra, managing director, who feels that the market for a portable player like Carvaan is 25 million Indian homes (in value that works out to Rs 15,000 crores, if each household bought a Carvaan). In this freewheeling conversation with Anirban Roy Choudhury, Mehra, a former STAR India and TATA Sky man, talks about going against the flow with an anti-internet hardware invention, why they decided to invest in a physical product and how the target audience (both old and young) responded.
What made you conduct the research that led to the launch of Carvaan?
In the first quarter of 2015 - just after I joined - we conducted a massive qualitative research across 23 cities to find out the music consumption behaviour of the Indian consumer across states.
Why we did the research is because we were saddled with the perception that 'nobody wants to consume music, nobody wants to pay for music and music consumption is not happening.' Now, coming from the entertainment world of Tata Sky and before that STAR (India), I found it difficult to believe that because what I saw from Tata Sky and Star is that music is the backbone of every family in India.
So, what were the findings?
The standard feedback that came from people who are 35-40 plus was that 'we love Asha, Kishore, Rafi, Lata' music and that for us, is the real music; but our problem is you Mr HMV. You have just kept it with you and you are not putting it out in the market'.
But your music is present in all major streaming platforms...
Many people began telling me that they were scared of apps and the like. They were apprehensive about what would happen if they pressed a button. All apps are designed for the younger, tech-savvy generation. Older people were asking, 'What if I press something and I get charged? What if something gets forwarded unintentionally? If an ad pops up what do I do with it?'
After the interactions, we understood that everybody who grew up in the 60s, 70s and 80s were still looking for a lean-back listening experience. When developing technology, we assume that everybody wants a lean-forward, more involved experience - yes, there is a group of people that love this, especially the younger crowd.
The other bunch of people say that 'music is something that should run in the background and please don't ask me to intervene after every two minutes; I just want to turn it on and keep on playing it out there'. This is what we caught on to...
So, how did a device that looks like a transistor radio turn out to be the solution for the problem?
Nobody came and told us that they wanted a particular physical structure. The insight was that they wanted a lean-back experience. So, we started figuring out what was available. Compact discs were on their way out and even if I make them, there are no CD players to play them.
Our first attempt to test the waters with older people was a product called 'music card'. It went with the basic philosophy that since USB ports are available everywhere, a USB port-based drive would be easier to play. The music card has done reasonably okay, but it did not solve the problem. People started using it in cars. Another problem was that it was the tech-savvy crowd working in the private sector in cities like Mumbai, Delhi or Calcutta that were using it more.
Why did it not work the way you wanted it to?
The music card will play only if you take the card, put it in a USB slot somewhere on the TV and then use the remote control to change the mode of the TV. Older people were not comfortable doing that.
We realised that the product served a need, but only for those who are more aware of the tech. It was not serving the person sitting in Bareilly, Jaisalmer, Jodhpur or Lucknow. That was the genesis of Carvaan.
Carvaan is often criticised for the lack of options it provides. For instance, it does not allow me to listen to a particular song at a particular time...
That the songs will play in a random order is a conscious call we took. We did not want to give the choice of going in a linear fashion because we realised that in the old radio days you never knew which song would play next. Hence, you end up being exposed to songs that you might have forgotten. Remember that line in Forest Gump? 'My mom always said life was like a box of chocolates. You never know what you're gonna get.' That is the experience we wanted to offer with the player.
Carvaan is not for those who say 'Now I want to listen to Lag Jaa Gale and Mere Sapnon Ki Rani'. Saregama's content is available on every major streaming platform. There are apps for those who want to listen to a particular song at a particular time.
Your advertisements position Carvaan as a gift device. Was that deliberate?
The joint-family concept is breaking in our country and it has been breaking at a fast pace over the last decade. The common phenomenon is that while the parents are staying somewhere else, their children are working in Mumbai, Delhi, Pune or Bangalore, away from home.
When you stay away from your parents, you may want to gift them something on an anniversary, a birthday or on Diwali. The size of the non-wedding gifting market in India (formal and informal) is about $20 billion, which is massive.
When you are gifting your parents, you never give them sweets; you gift a watch, a phone, a shawl or a shirt. There came the second consumer insight. 'I want to gift my parents something and I am bored of gifting the same traditional, impersonal gifts. I want to gift them something personal. What is it that I can gift?' The answer to that question is - Carvaan.
But if your product is for the older generation why do you have Bluetooth and USB features in the device?
The 60-year-old should not wait till his son or daughter gifts something. Our understanding is that people who are a little older, especially those who have retired, stop spending on themselves. They worry about how they will manage the rest of their life.
They have a problem with indulging themselves with a gift meant just for them. If you tell them that the product is for them alone, they will be like 'accha hai yaar' but I can do without it. However, if I start giving them an emotional reason - which is relevant to their children or grandchildren - it will work. That's why we have Bluetooth and USB functionalities added in the device.
Tell us about your regional expansion, you have already announced the Tamil version. What's next?
We launched with Hindi and then followed it with a Tamil version which is priced the same as the Hindi one and has the same number of songs. However, the Tamil version of the player has been modified slightly - in place of the Ameen Sayani button is one for Carnatic Music. There is also a button dedicated to devotional music (Hindu, Christian and Islam). We will launch a Bengali version in the next quarter and Marathi in the quarter after that.
How do you decide on the markets? Is it a decision based on the content you have? Do you have enough to do more regional versions?
Consider Bengali. We are sitting on the biggest catalogue of Rabindra Sangeet (songs written and composed by Rabindranath Tagore), we even have a huge catalogue of Nazrul Geeti (songs written and composed by Nazrul Islam). We are putting all of that in the Bengali version.
In Marathi, we have a lot of Lavani music (a genre that is very popular in Maharashtra). Then we have Asha tai, Lata didi and we will put all of that in as well. We will launch in other markets too. What decides a new launch is the marriage between the demand and size of the market and the catalogue we have. Just now, we are exploring Punjabi, Telugu and many other options.
What explains the launch of Carvaan Mini. Is that also based on a consumer insight?
The Mini version is not a consumer insight but a dealer insight. The dealers came to us and said that there was a large Bluetooth speaker sale happening in the 25 to 40-year age group.
They want something which can travel with them and they are also interested in listening to the most popular songs of that era. We launched two minis - legends and MS Subbulakshmi. The mini that is doing very well is the MS one and we have all the MS songs recorded so far in the Tamil Mini version.
Isn't the price a little steep at Rs 2,290 for 251 pre-loaded songs? How do you justify that?
The Mini is a great Bluetooth speaker which will compete on sound quality and features. The songs are there to add value and the future versions will have an FM radio in it too. A good Bluetooth speaker in the market costs around Rs 2,000-2,500 - that is why we priced it at Rs 2,290.
You have shared your projection of 100,000 units per quarter. How are you placed on that?
The target market that we have defined for ourselves is the SEC A, B, upper strata of C, and R1. This is 23-25 million homes, people who love their older music and we are sitting on that bank. Success depends on our ability to market the product to that customer. Apart from that, we have Indians outside the country. We have launched in the US; we are getting into Canada and the UK in this quarter itself.
You rate consumer insights very highly. Is that what keeps you going?
We start thinking that we can run marketing sitting out here in our glass offices. I firmly believe if you want to understand what customers want, you have to go out of your offices and go to the customers' homes and not just one or two. It needs to be a regular process because as we climb up the social ladder and get fancier positions as corporate executives, we start believing the world is what we know and that the world is people like us. That might not be a true representation of how things function and that is why, since 2005, I make sure that every month I visit 25 customer homes. I plan to continue that process.
This interview was first published in our magazine afaqs! Reporter on January 16, 2018.
A Note From the Editor
The one thought that leaps to mind after reading Vikram Mehra's interview is this: "is old the new 'new'?"
In a market where noise levels of pitching to millennials are deafening, the story of Saregama India's portable music player, Carvaan, comes as a whiff of fresh air. In the always-connected digital world, one would not have imagined that retro songs, arranged randomly in a box, would reverberate so resonantly with consumers and revive a brand's fortunes so spectacularly.
Mehra and Saregama had a simple insight: music can be taken to the people and not necessarily the other way around. Taking a contrarian point of view and sticking to their guns paid off handsomely. Saregama chalked out its course quietly with an eye on the older consumer while others fought for slices of the under-30-consumer market pie.
That begs the question: are there other categories in which marketers could tap the older consumer? Music has more examples. In December 2016, sales of vinyl records in the UK overtook money spent on digital music purchases, for the first time in history. This after almost dying out somewhere around 2006.
The gaming industry witnessed the return of old consoles. Atari, Game Boy and Sega Megadrive have made reappearances much to the joy of old gamers. This year's CES 2018 saw Nintendo's original Game Boy come back 28 years after it was first released when computing firm Hyperkin revealed an upgraded version in Las Vegas.
The mobile industry too had its share of retro re-releases when Nokia reintroduced its 'classic' 3310 handset. Such launches brought back fond memories and not just for people who buy them. But nostalgia is not the only reason behind the success. Marketers like Mehra don't leave things to chance. On the ball always, Mehra makes it a point to visit 25 consumers, in their homes, every month.M Venkatesh