Soundbuzz continues to be the country’s only player straddling both the mobile and internet mediums, and general manager India operations, Mandar Thakur is bullish about the company’s prospects.
Thakur says any competition in the online digital music space would be welcome because it would only grow the market; for a long time there wasn’t been any other player except Soundbuzz in this business.
As the company moves towards its new venture of having a DRM free online store, Thakur speaks his mind about Soundbuzz’s plans, the industry scenario and the fast changing Indian music consumer, in a chat with Radioandmusic.com’s Aparna Joshi.
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Excerpts:
How did Soundbuzz start?
Soundbuzz was started in 1999 by Sudhanshu Sarronwala who used to head MTV operations in the Asia Pacific, and given the founders’ backgrounds in the music and media industres, it was but natural that they get into the music internet space. That was pre-Napster, and we navigated a lot through choppy waters till we figured what it was that the industry really wanted.
Today, we are the only digital music distributor that plays both online and mobile. There isn’t any other company in the Asia Pacific and Australia – the markets that we operate in – that has both mediums.
After seven years of operations, we are the only player that still does the online business, and continue to invest in the online business. Now it’s a reality that both the mobile and online mediums are converging; at one point what were two clearly different mediums of digital music distribution are today converged, and that’s been our biggest advantage – the fact that we are a niche player because we do music and we are available on both platforms.
Has the burgeoning mobile industry helped in a large way?
In India, digital music is mobile. In countries like Japan and Korea, internet means mobile. But here the scenario is very different.
How well does an online store work for you?
While we remain bullish on the online business, we are basically capitalising on the convergence of mobile and the internet. We have a faily large library of music and this same library appears on our various consumer sites like Tata VSNL and Airtel and we keep adding to this library every day. Today, our library stands at around 850,000 to a million tracks and there’s new material is being added every day. It’s the largest collection of music across the region. Besides, Soundbuzz essentially is a B2B company, and our partners are the ones who mainly interact with the final consumers.
Our job is to provide the backend, the content, the DRM. The key requirement is a massive library of material, a reasonable cost structure, flexibility of formats. But although broadband connectivity is growing by leaps and bounds, it’s still a long way from being big numbers in India. Secondly, the billing mechanism is also a hurdle – people buy a lot of things on the Net in India, but still seem reluctant to pay online for a tangible piece of IP. We have tried to simplify matters by allowing payments by credit card as well as billing through service providers, the way a mobile phone bill is paid.
Thirdly, the consumer’s own acceptance of the medium. Unlike in the West, in India, the mobile has come in before the PC did – so the mobile has been the first touch point for consuming music in a different way. Now, with the convergence of the two mediums, companies like ours stand to gain, because of dual delivery mechanisms and our huge online library…
What kind of downloads find the most takers ?
Mobile downloads are far, far ahead of online downloads. On the online side, from a few lakh, we will probably touch a crore in revenues by 2008-09. Compared to that, the mobile industry touched revenues of Rs 1026 crore in 2006. The plain vanilla ring tones are and will continue for some time to add to the mobile revenues. But now that the mobile phone has become the one pipe route through which the consumer can consume so many services, he is also able to download a single track that he may fancy or catch on air any time he wants.
Does that spell the end of the music album as we knew it?
I don’t think so. Truth to tell, albums are a good proposition. It’s just that have morphed into something else. The relevance of putting an album out is receding.
Earlier it wasn’t economical to put one song out. You were forced to make a product that someone would put in more money for. An artiste today is free of these shackles. If he has a couple of songs, he can even put them up on the Internet. From the consumer’s point of view, he can put together individual songs and compose his own playlist. So, yes, the traditional concept of an album is changing.
How does internet piracy change the rules of this game?
Piracy will not go away, it remains. Consumers need to be given a better choice of legal downloads and easier modes of payments then you can beat the pirates at their own game. The pirates face the same problem as we do – the penetration of broadband for instance. At another level, we have tied up with record labels and associations globally to fight piracy – we help them with the intelligence required to combat piracy.
What about the DRM free store that you are planning to launch?
DRM is a set of rules that owners of the IP have put in place. DRM has helped combat piracy as well as allows you to experiment like allowing you to burn a CD once or 10 times. In the online space dominated by Apple versus Microsoft, it’s been a problem. But in an emerging market like India and on the mobile which has emerged as a frontrunner, the DRM works differently. The telecom companies and handset manufacturers have come together to form the Open Mobile Alliance (OMA) – a common architecture on which to base the codes to write your DRM, which works across handsets. But the debate whether a DRM free world is best or not will continue till all the stake holders are convinced of its worth.
We are investing in a DRM free store because we feel it’s the way forward. Right now, we are in dialogue with certain labels in terms of all formats. We hope to launch the store soon.
How will it affect pricing?
DRM free, I think, will eventually bring down subscriptions. Currently, the pricing is not very affordable. In the case of the iTunes stores, the DRM free zone has a higher fidelity, but we really don’t know how it might turn out here. Some record labels have been highly enthusiastic about the venture.
You have a large part of the music industry with you. Is it Bollywood music that rules the roost throughout India?
Strangely, as you move into the interiors, a very different kind of music starts selling. Regional music could well be the lifeline of the music industry in the coming days. While south Indian music is the second largest category in Indian music, the largest is a combination of north Indian and Bhojpuri music. More important than the formats are the mechanisms of discovery of different kinds of music, which are simply amazing. In addition, the modes of delivery of music, be they ringtones or caller tunes are becoming increasingly innovative and simpler for the end user, helping the market grow exponentially.
Does India figure as one of your big markets?
India and Australia are our two largest markets. Australia is like a hidden bomb – it’s a great music market, people are willing to pay a lot for music.
Overall, we sell 2.5 to 3 million ringtones per month across markets, a majority of these out of India. Now of course, the ringtone market isn’t that simple either – there are ring back tones and other services – so it’s better described as mobile products. A majority of our online sales come out of Australia, which is our biggest online market. In fact in Australia , it’s a 50 50 scenario, with mobile and internet sales nearly equal in volumes.
India, on the other hand, is a purely mobile market.
