Business Today

Nod to a digital beat

Most young Indians have known nothing but digital music but that has done precious little for the music industry. That may be changing, slowly.

Kushan Mitra        Print Edition: March 6, 2011

When popular Indian folkrock band Indian Ocean released its album 16/330 Khajoor Road last year, it decided to take a lesson from the British band Radiohead. In 2008, the alternative rock band had allowed fans to download its album In Rainbows from its website and pay whatever they had "thought fit". Indian Ocean went one step further - its fans could download the entire album for free.

"There have been loads of downloads this time," beams Sushmit Sen, the band's guitarist. Sen has an interesting point to make: despite giving away the album for nothing, thanks to a tie-up with whisky brand Johnnie Walker which sponsored its website, Indian Ocean actually made seven times the money it made from its previous best-selling album Kandisa, released by Times Music in 2000. "Tell me why should we sign up with a (music) label again," asks Sen.

Rishi Khiyani, CEO, Indiatimes
With the increased reach of highspeed broadband connections, and with new 3G networks - expected to enhance connectivity to mobile phones and computers - the Indian digital music space will only get more exciting. But the question every music content owner, operator and music distribution channel is asking is, will this excitement translate into revenues.

Jasmeet Gandhi, Head of Services Marketing, Nokia India, jokes about the time he went to watch the film Rock On with his daughters. The film, which captures the life behind the scenes of a rock band, ended with a message on the screen imploring users not to download pirated copies off the Internet. "My normally reserved elder daughter started laughing and said 'who are they kidding!'," Gandhi says, adding that the problem for music - and movie - companies in India today is that a large proportion of their users see "downloading off the Internet as a birthright".

Rock band Indian Ocean allowed fans to download its new album 16/330 Khajoor Road for free from their website, and actually made more money than the physical format release
Even if the Internet cannot be directly accessed by many people, at least in a high-speed form, the proliferation of Secure Digital, or SD, memory cards has exacerbated the problem. Over 95 per cent of mobile phones sold today have SD memory card support and therefore also have a music player. In any major mobile retail market, like Delhi's Gaffar Market, hole-inthe-wall shops selling memory cards with pre-loaded, mostly pirated content are a common sight. Service provider Vodafone and mobile retailer Spice Digital have experimented with pre-loading legal content on phones and enabling users to download in their stores. But it is still early days.

Shireesh Joshi, Director, Marketing, Bharti Airtel, admits that this is a problem. "We have had legal full-track downloads from a wireless application protocol, or WAP, site for some time now and downloads have been quite less compared to our customer base."

It is not even a problem of cost, as most tracks cost just a rupee. But if not cost then what? Gandhi believes the problem is the user interface, which is why Nokia has spent a lot of money developing its Ovi Music Store. And while the experiment of unlimited Digital Rights Management protected music has failed in most countries for the Finnish phone giant, India is one of the countries where it is keeping the store alive. "Songs should not only be cheap but have to be available easily. We have worked hard in doing that, and we also have worked with the operators in designing data plans that do not dramatically increase the cost of the song you download," says Gandhi.

The last point is well taken. Even for songs with Ovi Music Unlimited, Nokia's music download service - users of certain devices can download songs for free for a year - usurious data rates mean a fourminute song download over some data networks could cost you around Rs 50 in data charges.

But if the concept works, the sky is for the taking. Apple's iTunes store in the US is the leading music retailer there by a long margin. KPMG pegged revenues from the Indian music industry at Rs 780 crore in 2009, predicting it to touch Rs 1,400 crore by 2014 - driven by digital music. The share of digital music in the total revenue pie would go up to 63 per cent from the current 29 per cent, the consultancy firm had said.

This growth hinges on monetising what today are mostly illegal downloads. One way could be downloads on the mobile phone. Airtel has not become India's largest music retailer on the back of nothing. For certain services where there is no technological alternative, legal downloads still matter. Caller Ring Back Tones, or CRBT, is the most popular with one in five Indian mobile users availing of the service by paying Rs 30 a month and Rs 15 a song, according to Medianama.com - a site that tracks the digital content space. After text messaging, says Nikhil Pahwa, editor of the site, CRBT is the biggest mobile value-added service. Even there, the news is not very good. "CRBT growth is stagnating," Pahwa points out, "and whenever there is a free alternative, India's penny-pinching mobile users gravitate towards that option."

Is the future streaming?
In the US, services such as Pandora and Spotify allow users to stream an endless number of songs from the web onto multiple devices for free. Indiatimes is about to launch a new service called gaana.com that will do the same.
Part of the problem, says Gandhi, is that the Indian music industry is dominated by the movie industry. "The shelf life of a song is very low; a hit song will at best be remembered for around six months. So, the idea is to make as much money in that period."

And because piracy spreads the popularity of a movie and the music is released often a couple of months ahead of the movie - it is often looked upon benignly. "A movie ticket costing more than Rs 100 or a few rupees for a song, what would you prefer as a movie producer?" says a music distributor on condition of anonymity. Even Indian Ocean's Sen believes downloads, even if illegal, help the band reach out to more fans than ever before and that is showing in attendance for the band's live shows.

Even though some states, notably Punjab and West Bengal, have an artiste-led music culture on the whole, artistes do not have it very good in India when it comes to revenues. The proposed new Copyright Act is expected to solve these problems to a degree giving artistes some rights over their creations.

In fact, Nokia hopes to redress this situation by starting Nokia Music Theatre soon. Similar to the Coke Music Studio, pioneered across the border in Pakistan, the concept will have artistes of all hues coming to studios and jamming together creating a whole new repository of content. "We will then use our Ovi Music Store to distribute the songs," says Gandhi. While the model may not be a longterm one, it could start a new trend.

Yet another model that could emerge is ad-supported music that people can listen to off the 'cloud' - music that is hosted on the Internet and can be accessed from any Net-connected device. Services such as Pandora and Spotify already exist in the US and Europe.

Here, Indiatimes is taking the lead with Gaana.com around the corner. "We will add a social dimension to music listening," says CEO Rishi Khiyani. The concept is simple: sign on to the service using Facebook Connect, listen to songs, share them with friends and take suggestions from the music recommendation engine. The service, under alpha testing now, expects to go live in late March or early April. And users who want to store their songs offline would also be able to download songs legally off the service and load it across several devices.

It remains to be seen which model succeeds in the digital music space in India. But one thing is for certain, India would have found its own unique solution for making money from digital music.

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