PETALING JAYA: Astro Malaysia Holdings Bhd (fundamental: 1.1; valuation: 1.7) has launched Raku, Malaysia’s first personalised radio and music streaming service, which is available on personal computers (PCs), tablets and smartphones, with the aim of reaching 500,000 users in six months.

Astro Malaysia chief operating officer Henry Tan Poh Hock said as Raku is a totally new product, he cannot give a projection of the service’s contribution to the company’s earnings yet.

“We are not setting a new [earnings] target for that. We are taking feedback. Once we hit a certain level of threshold, we can let you know in greater accuracy the kind of expectation we have,” he told reporters during the service’s launch here last Friday.

He said Raku enables users to pick and choose the best of local and international music and radio contents with options to combine with podcasts.

“Raku looks to increase its advertisers’ value proposition by offering innovative opportunities for advertisers to engage with their target consumers,” he added.

The service is available in two versions — free or at a premium of RM14.90 per month — and is downloadable via www.raku.my for PCs, Google Play Store for Androids and App Store (US$5.99 or RM21.74 per month) for iOS devices.

Both free and premium users can listen to the existing 1.2 million songs by local and international artists in the Raku database, which will be upgraded to more than 10 million songs in three to six months.

But only premium users who pay the monthly fee — inclusive of the 6% goods and services tax — can download and save songs they want and listen to live performances in Malaysia on demand.

The service is targeted at local users as copyright issues make most of its content unavailable outside Malaysia, said Tan.

On whether the service will affect Astro’s radio revenue, Tan said “the market is big enough and the offering is slightly different”.

Tan also said there is a huge opportunity for advertisers as they can target their core audiences through the service, for example, by associating their brands with specialised playlists.

Mobile telecommunications company Digi Telecommunications Sdn Bhd is the first premier advertiser on Raku.

Astro Radio chief executive officer Jake Abdullah said the service could generate a lot of business opportunities, like merchandise for fans, among others.

Jake also thinks Raku can be a great opportunity for local artistes to be featured and that artistes could enjoy some revenue from the song downloads. Tan said the company has contracted with over 70 local artistes and will pay them a “decent portion” for the rights of the songs.

The company is now busy tying up with other content providers to get more content.

This article first appeared in The Edge Financial Daily, on April 20, 2015.