Digital music fans get more for less

If you had Rs 99 in your pocket, then what would you buy — a music CD with limited songs or an unlimited music download subscription from websites like Hungama? Probably the latter and Neeraj Roy, CEO and managing director of Hungama, believes so, too.

That is why he is asking customers to dump the idea of purchasing CDs and instead opt for digital music downloads that will cost less than Rs 100. As consumer satisfaction with music downloads skyrockets, Hungama along with BSNL has created an On Demand Entertainment Storefront that allows BSNL broadband consumers to seamlessly download entertainment content onto their PCs and, soon, onto their mobile phones, too. Over 10,000 users have already registered on BSNL’s music store, which is still in the beta stage.

Roy believes it is the portability that has encouraged users to download digital content. “When you buy content from Hungama.com on your mobile phone or on PC, you can actually take that music with you across digital devices, such as your PC, mobile phone and digital music players.” Users can also import their downloaded DRM-wrapped content to various devices, which is in contrast with Apple iTunes content that is exclusive to iPod and iPhone users or Nokia Music store which can be accessed on only Nokia devices.

Indian Music Industry (IMI), a non-profit industry organisation, observes that users will grow the market by popularising the non-physical formats like digital downloads, royalty income and ringtones. Taking a cue, T-Series has launched the music of its latest film Blue, in the form of pen drives and micro chips starting at Rs 425, with a capacity of 1GB. Bhushan Kumar, chairman and managing director, T-Series, is hopeful that music launch of films on the digital platform would give consumers legitimate content and curb piracy. Online sales involve lower distribution costs and eliminate a retail margin of 15 to 20 per cent. Perhaps, that is why T-Series is being optimistic about its digital music initiative.

India’s 52 million Internet subscribers, expected to be over 200 million by 2011, have become a crucial market for the Indian music industry.

Legit downloads increasing KPMG’s Consumers and Convergence III survey affirms Hungama’s confidence in digital downloads. “Those Indian consumers, who use mobile gaming and download music onto their mobile phones seem satisfied with their user experience,” notes Rajesh Jain, head of Information, Communication & Entertainment at KPMG. Music, according to KPMG’s survey, seems most attractive to mobile phone users, with close to 95 per cent Indian consumers downloading it onto their handsets.

Mobile music has overtaken music sales for companies like SaReGaMa that generates 50 per cent of its revenues from ringtones offered through its catalogue. “Consumers have warmed up to ringtones, ringback tones, full-track audio and video downloads,” says Arvind Rao, CEO and co-founder of OnMobile, a leading value- added service (VAS) player. Rao also predicts that prices of mobile VAS will fall by 25 per cent in 2010, which, in turn, will bring new users to the present 45 million VAS users.

Already the size of the music market on mobile phones is very big. The legitimate market, as per IMI estimates, is around Rs 300 crore that includes products like ringtones (monophonic and polyphonic), true-tones, ring-back tones, full song mobile downloads, music videos, etc. Rajiv Hiranandani, country manager, Mobile2Win, feels, “With more than 400 million mobile subscribers and approximately 50 per cent of the phone models in the market capable of music transfers, mobile subscribers will have the best of VAS delivered to their screens.” Mobile users in India can look forward to value-added services, such as sharing songs during phone calls, listening to an audio stream during a call, or sharing a play-list that contains click-to-buy links to a music store.