MUMBAI: It’s been a landmark year for the music industry as with digital sales overtaking physical in 2009. Though the industry is on a growth trajectory, some impediments in the ecosystem are keeping it exploiting its true potential. With the imminent onset of 3G and wireless broadband and the concomitant meteoric rise in financial costs, does the industry see new business models emerging to keep the music business viable?
The landscape of the international mobile market includes three avenues namely ringtone, mobile tones, CRBT, mobile radio and WAP data services With 3G there is an addition of one more vector which will be the beneficiary to all forms of video content and enablement of off-portal business. As proved India is a big market for music but how does it reach audiences via digital and how does the industry earn from it was discussed during the power packed panel on the Digital Evolution. It had some major heavyweights like Eva Buschkrei from Vodafone Essar ltd, Nokia’s Viral Oza, Lloyd Mathias from Tata Teleservices Ltd., Hungama Digital Media’s Neeraj Roy, Prashant Bahadur from The Orchard, S L Saha from the Indian Record Mfg Co Ltd., Sanjay Uppal from OnMobile Global Ltd, T Suresh from EMI Music India and Vipul Pradhan from PPL. The panel was moderated by Ralph Simon.
Overall, the industry sounded very bullish about 3G and was certain that it will add to the existing users but also addressed that there are certain other related issues that need immediate actions
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A digital music pioneer, Neeraj Roy spoke passionately about the issue and said that there was â€?cautious optimism’ which the announcement of 3G. “There isn’t sufficient spectrum allocated and networks are already working. Hence there is optimism but there is a sufficient amount of cautiousness too.” he added.
Sanjay Uppal added that Content aggregators need to provide the users a good user experience as 3G pops up in the country. The industry needs to deliver consumers feature phones without complexities and it also needs to satisfy consumers at the bottom of the pyramid.”
Expressing his views Vipul Pradhan said, “There are four pillars that help in generating revenue. Physical sales which is almost diminishing, non-physical sales (music played in public arena cafes and hotels), radio and digital which includes internet and mobile. Physical is dead and the death knell was recently signed by radio hence the only non-physical and digital medium is available for exploitation. If ringback tone can do a business of Rs 30 billion, streaming industry has the same potential. 3G will generate a lot of money….
Viral Oza said that 3G can help in consumption of new data and adding new users. “Existing consumers will consume more and more people will be added to the consuming universe. Also content aggregators, content providers and handset manufacturers need to maintain a symbiotic relationship…
The panel also stressed that there has to be simplicity in the devices and new services – only then will the audience lap it up. Prashant Bahadur accepted this adding, “3G will allow consumers to access content in a multitude of ways. Each bracket will find ways to consume. But what we need to do is take care is that the user experience is easy.”
He also gave the example of streaming site Spotify and its growing popularity in Europe, how its user friendly features let more than half a million users join in a short span. He added, “We need to provide ease of use of service to customers even from content point of view.”
Regional music has made a tremendous contribution in the mobile/digital market. Unfolding the story about the growing contribution of regional music S L Saha said, “Regional music was largely ignored when digital mobile market started. We had to juggle our way out for the first couple of years our presence was inconsequential. But when the spectrum opened up the market became more receptive to regional music.” He also added that rural market today is much larger than urban and needs to be tapped.
T Suresh added, “Provide the users with a wide range of genres and see how the percentage of Bollywood for which there is a huge foul cry, shrinks. Provide them with easy navigability and search results and they are ready to consume.”
A lot was discussed about what kind of pricing model should be adopted. With both the content aggregator and content provider wanting to usurp a greater chunk of the pie. We keep losing one odd per cent of the total revenue here and there, and ultimately it amounts to a big loss,” Uppal said.
Roy also mentioned though 3G has a lot potential it is not such a thing to feel euphoric about. There are a other avenues like video portals, music streaming, gaming that also have to be tapped. “Digital will no longer be limited to mobile device. Intel has close to 137 devices to be launched soon and there are devices other than mobile that will soon be available. This will add to the current user base of 70-75 million to 300 million as expected.”
He further added, “3G is a double edged sword. With right pricing we can get a whole new data base and expect users to consume a lot more.” He also said that more brands should be brought into the scheme of things. “There are 62 brands that identify with music. We need to tap them.
The panel also added that a platform needs to be developed where there is openness and transparency in the billing system, something that content providers have always asked but which has not been forthcoming. I always wonder why payments and settlements take so long,… said one of the panelists.
Uppal added that while it is possible to send out reports and payments quickly, the only limiting factor was the fact that technical reconciliation with the telcos takes time.
