FEWER startups have had as happening a life cycle as Patari: taking off with a bang within the community of Pakistani music lovers and artists thanks to its quality tech and even better content team, and then almost come crashing down amid controversies pertaining to sexual harassment.
For those who are not aware, Patari is a Pakistani music and audio streaming platform based out of Lahore. Like Spotify but for all things local — from your Junoon playlist to discovering some folk singer from Thar. Just go to the app/website, browse through different genres, or search for a song you have been wanting to listen, create a playlist — basically similar to any other music app.
Patari had scored seed money from Sarmayacar — a Pakistan-focused venture capital.
The controversy arose when two girls came out against Patari’s founding CEO for sexually harassing them. Soon after, a tweet from the startup’s official Twitter handle announced that the chief will be stepping down. Things calmed down, but only for the time being. Months later, six people, led by the company’s COO, left Patari saying that the CEO was still active in day-to-day affairs.
Now over a year has passed, new faces have been brought and in some cases, new renditions of old ones with investor at the helm, trying to clean up the mess of what was once one of his most promising portfolio company. But what has changed since then?
Talking to Dawn, Sarmayacar CEO Rabeel Warraich – serving as the interim chief of Patari for a year – said, “After the former CEO resigned post allegations, we conducted an internal audit which found broader issues with the company culture that needed to be fixed. We then overhauled senior management, reconstituted the board (without the former CEO) and have since seen some equity transfers as well. As for the original harassment case, we are not in a position to opine on that case specifically as the incident(s) occurred outside the workplace involving individuals that were neither employed nor involved with us. The only thing we could do at the time, which we ended up doing, was to make sure anyone accused of something of this nature could not continue to have a role inside the company.”
Let’s move on and talk business though. Music platforms across the globe mostly work on a freemium model — a free version with ads for non-paying subscribers while an ad-free one for paid subscribers. Patari, however, has time and again only flirted with it and instead mostly relied on corporate sponsorships and organising music events to generate cash. While maybe profitable, it sounds more like the revenue stream for an ad agency, not a tech startup.
“We’ve been trying to introduce a subscription-based, ad-free premium service but there have been issues such as an accessible channel for recurring payments. But recently, we launched it internationally and have partnered with a local carrier billing startup to do the same for Pakistan well,” he says. That, coupled with a penetrative price structure, will help expand its reach beyond the three major cities, he hopes.
Generally, the model is to first build a platform, introduce a tech-based monetisation and then start producing content – a trend even in on-demand TV. Patari, however, jumped into content without figuring out a way to cash in the product. “We realised early on that this is where our competitive edge was so to uniquely position us vis-a-vis others, we entered content generation very early on,” says the CEO.
Another issue surrounding the company has been the non-payment to artists, with a local musician coming out in April and accusing Patari of exploiting the artist community. So what is that all about? “According to our agreement with artists, there is a very clear revenue sharing formula which is based on income earned through online channels, something we haven’t put in place as yet. As for money through events and the good old agency model, we pay the musicians whose content is used,” he explains.
They are not the only ones in the scene though. Locally, bestsongs.pk would be the biggest competitor and has millions of downloads versus only a few hundred thousand for Patari. But that’s not it, Pakistani music scene has long been patronised by Indian companies and it’s no different in the new model. Gaana and JioSaavn, for example, have more or less the same database of Pakistani music as Patari so how does Warraich hope to stay ahead of Tencent and Jio-funded startups?
“First of all, we are not just an aggregator but also create local content, which makes us different from others. Secondly, Indian companies are always very cautious about doing business with Pakistan due to fear of risking their own local market every time political climate heats up,” he says.
However, for a startup, Patari has a lot of costs beyond tech as well, such as acquiring copyrights, and royalties (when they eventually start paying them). And with a digital revenue stream not yet in place, they will have to hurry things up. But will the music and audio streaming platform finally put ghosts of the past behind and make the most out of its new life? Only time will tell.
The writer is member of staff:
Published in Dawn, June 2nd, 2019