While the Indian music industry is increasingly looking at the Net to combat declining sales of CDs, it is discovering that the toughest challenge is getting users to pay for something that is perceived to be free
With due apologies to Led Zeppelin, the song (no longer) remains the same. In one of the biggest ironies in the Internet space, India is a frontrunner among countries where the sale of digital music will soon overtake the physical sale of music. But that doesn’t really matter because industry estimates suggest that only 10 per cent of the music downloaded from the Internet is legal. Thanks to the lure of free content, the owners of music rights never get paid.
Here are some numbers: According to a survey by Soundbuzz, a Singapore-based digital music services provider, more than 88 per cent of the total revenue of Rs 4,100 crore projected for the Indian music industry by 2009 will come from the sale of digital music. Soundbuzz estimates that the sale of digital music for mobile devices in India will touch Rs 3,601 crore by 2009, up from Rs 450 crore in 2005.
So, music companies banking on other options to sustain their stores are caught between a rock and a hard place. But given the decline in sales of the traditional distribution formats, the country’s leading music companies have no option but to take to the Internet – even if consumers aren’t willing to pay for it.
Music distribution stores like Planet M are enabling digital downloads in their stores across the country. Planet M, an arm of Bennett, Coleman and Co. Ltd, recently revealed its plans to set up kiosks with downloading software that will allow consumers to buy digital music. T-Series, a leading music production company, announced its web store for downloading music. The web store will have digital music download options along with different types of ringtones. Users will have to pay for the tracks and they can then own the product.
Saregama, which holds the rights to more than 65 per cent of all songs recorded in the Indian music industry, is also getting its act together. In mid-August, the company declared that it will offer Hindi music online for download legally at Rs 10 per song. “As technology changes, we need to move on. We are content owners and anywhere the consumer is going, we need to follow him, whether he is moving to the Internet or MP3 for music. Saregama’s website will hit the markets in the next two-three months,” says Atul Churamani, vice-president, Saregama.
Saregama offers a customised CD service through its site, hamaracd.com. It is also looking to deliver digital content via kiosks at retail stores. Here a customer can pay cash to get a song of his choice. The firm has worked out a project running in four cities with more than 25 kiosks.
Companies like Universal Music India and Sony-BMG Music have already made their music available in the international markets by putting their content up on sites such as itunes.com and napster.com for download at a cost. On October 1, 2005, Universal Music began selling its Indian music repertoire in international markets through music retailing websites at 99 cents per download.
Then there’s Indiatimes.com, which allowed users to download music earlier, but is currently unavailable as “the website is shifting to a new, upgraded version, which will be available by the end of September 2007”, says a spokesperson. He adds that the Indiatimes music service used to get an average of 50,000 unique visitors on the music category page every day. Music contributed only 5–7 per cent of the total sales.
Even film production companies are joining the fray. Yash Raj Films’ website, www.yashrajfilms.com, offers digital downloads of audio tracks of its own films and uses the Digital Rights Management (DRM) technology that enables content providers to own copyrighted material in a digital format and use it on the basis of the licence rights given.
Yash Raj Films is even considering making its entire audio library available to consumers in a DRM-free format soon, available at a premium price, said a Yash Raj Films spokesperson. The price for each song will be Rs 12 in India and 69 cents outside India for catalogue titles, while new releases will be available at a premium price of Rs 15 or 99 cents.
Making Money while Fighting Piracy
All around the world, digital downloading of music content is perceived to be “free”, which has led to illegal downloading of music and hence its piracy. The DRM technology is a new way out for the music industry to fight piracy. DRM controls the copying and sharing of legally downloaded songs from the Internet – content owners are able to encode a song so that it can only be downloaded to a limited number of devices and cannot be copied or distributed.
The Music Matters survey conducted by Synovate in March 2007 shows that a quarter of urban Asian consumers surveyed have downloaded and saved a song from the Internet without paying for it in the past month, and 18 per cent have used a file-sharing program to share music with others.
“The Indian subcontinent is yet to experience a revolution in digital downloads owing to the general consumer perception of online transactions. The Indian consumer is more mobile savvy than Net savvy. Mobile downloads do not require credit card transactions and are thus preferred,” says Shaheen Jehani, senior manager, marketing, Music Today. But she also holds the opinion that “the serious music buff will buy what he/she likes to hear, irrespective of cost”. Music Today will also move to online music downloads by offering downloadable content on payment.
Whether it’s mobile driven or advertising supported, clearly the search is on for a new business model to make the cash registers sing.