The internet is known for the
convenience and comfort it brings at our fingertips. Be it shopping, travel,
insurance or food, the web empowers us to do all these things with a simple
click. While online shopping is just taking off in India, online music
distribution has been around for some time and has grown over the past 5 years.
Digital consumption, distribution and availability of the catalogue in the
digital space are only a logical progression and evolution of the Indian music
market. Film music, including Bollywood and regional film music, accounts for 67%
of music sales in India. Film producers typically create an album for a film and
license the exploitation rights to a music company. The acquisition costs for
these music rights can be prohibitive and are typically 25% to 30% of a film’s
total cost. Music companies bear the entire risk for an album’s success, which
is closely linked to the film’s success. Because of the dominance of film music,
the Indian music industry is less focused on developing stand-alone artists
than in other countries. Music companies have diversified into film production, edutainment
content for children and non-fi lm music. They are also entering into artist
management to increase non-film music revenues and are exploring the concert
promotion business to meet a growing demand for live entertainment.
Already being touted as the “iTunes of
India”, Flipkart's “Flyte” platform launched in February offers users the
option of legally downloading songs for as little as Rs 6 a track while albums
are available for download starting at Rs 25. What's more is that these
downloads are Digital Right Management free implying that there are no access
related restrictions on the use of digital content after purchase and one can
download and play it on Winamp, Wndows Media Player, iTunes, PC or home theatre
system and so on. Though Flyte has widened the pool of choice for music lovers
to get their music online, it remains to be seen how the site will manage to
fob off fierce competition from free online streaming sites, pirated music
download portals as well as the throbbing mobile music download segment even as
it hopes that its “easy-to-buy-music-at-attractive-price-point” strategy will
help convert the freeloader mindset to the willing-to-pay category.
Online streaming music portals for
Indian music such as gaana.com, dhingana.com and saavn.com are some
of the popular players in this space in India. In 2011, the Indian music industry achieved a
19 per cent year-on-year decline in sales of physical music which was
compensated by a significant jump of 24 per cent year-on-year in digital music
consumed, according to a FICCI-KPMG Indian Media and Entertainment Industry
Report 2012. However, interestingly 90 per cent of the total digital music
sales have come from the mobile segment. Last year also provided users viable
options of music consumption through different digital platforms such as pay
per download, unlimited music streaming and subscription based music services.
With the emergence of these digital platforms and greater channels of music
discovery, exposure to newer genres of music is also picking up, nurturing
demand for non-film genres such as devotional and classical songs, though
there's still a long way to go, believe some users.
Apart from technological innovation,
creativity and innovation in packaging and marketing is also gaining centre
stage for these music websites in a bid to stay in the game. For instance, the
website iMusti.com is
offering an “advertisement free musical experience for 7 days” by signing up or
login in through Facebook followed by a paid model if the customer wishes to
continue.
According to a FICCI-KPMG Indian Media
and Entertainment Industry Report
2012, the Indian music industry achieved a 19 % year-on-year decline in sales
of physical music which was compensated by a significant jump of 24 %
year-on-year in digital music consumed last year. Physical sales of music
continue to slide with digital music consumption on a steady rise. This
phenomenon was more pronounced in the urban centres where mobile and Internet
penetration is higher; however regional markets were less affected.
In
India, the idea of online music started gaining a foothold around 2006-07, when
music companies such as Saregama HMV, T Series and Sony BMG started digitizing
their tracks, the online music market also started growing. During 2007,
Saregama forayed into Hindi music download business with competitive price tag
of Rs.10 per track download. In April 2008, Motorola attempted to tap the
delivery of music content on the Internet and mobile through acquisition of
Asian online and mobile firm- Soundbuzz. However,Motorola closed down its
Soundbuzz’s business within a year (May 2009). Meanwhile, illegal- free
downloads of music continued on large scale through various sites and choked
the growth of early entrants like Saregama. Later in October 2010, Hungama
Digital had launched music download service, and recently Flipkart’s Flyte went live. Others such as imusti, Saavn, Gaana, Dhingana, Hungama and NH7, have joined the streaming league
recently.
Consumption
of online music has seen consistent growth during the last 2-3 years and mobile
presents itself as an even more exciting domain, which has grown incredibly
well. The explosion of smartphones and high speed 2G and 3G connections in
urban markets has largely contributed to this. According to a survey by Neilsen
released in June this year, there are 27
Million Smartphone users in Urban India across 1 lakh+ towns. Currently, mobile
contributes around 85-90 % to the total digital music consumption in India.
In
download businesses, besides bandwidth constraints, unavailability of
micro-payment tools is a big challenge, typically to enable a song download
from Flyte or Hungama, consumers need to pay around Rs.10-15. And to pay such
small amount it is unlikely that consumer would use his/her credit or debit
card. However, emergence of mobile
based IMPS payment could solve
this payment hassle to some extent.
