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Music to my ears

Music to my ears
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First Published: Mon, Apr 23 2007. 03 10 AM IST
Updated: Mon, Apr 23 2007. 03 10 AM IST
Sony Ericsson’s latest advertisement for its new Walkman phone touts exclusive songs by Robbie Williams and Asha Bhosle. Sony Ericsson has partnered EMI Music India to bring the songs on select Walkman music phones, launched in February. Ericsson has also partnered mobile network operator Hutch to make one of Robbie Williams’ songs available as a download for Hutch subscribers.
Similarly, Nokia has teamed up with singer and composer A.R. Rahman to premiere his first English composition, Pray For Me, Brother, on its N91 series. These tracks are available only to those who buy the phone or subscribe to the service being offered by the particular telco.
The tactic not only underlines a clever marketing strategy by the mobile phone makers to woo consumers, but also the growth of mobile music in India. From mobile handset makers to network operators to music companies, everyone wants to make the most of the growing mobile music market. Industry experts say mobile music will be one of the biggest drivers of digitalization of music. Music phones, they say, are growing faster than other handsets.
“Our Walkman series portfolio contributes significantly to the total sales. The two most popular handsets in the Walkman series, the W810i and W700i, have features such as mega-bass, special stereo headphones and track ID for music recognition,” says Sudhin Mathur, general manager, Sony Ericsson Mobile Communications, India.
Other mobile handset makers are also trying to optimize the potential of music to boost sales. In 2006, Nokia shipped almost 70 million devices with integrated music players.
“Given the huge potential of mobile music devices, various industry stakeholders such as original equipment manufacturers, content developers and service providers are beginning to adopt a strategic approach towards developing this domain by offering rich music content on mobile platforms,” says Vineet Taneja, director, multimedia, Nokia India.
Interestingly, downloadable music currently forms a small part of mobile music sales and experts say it will take a few years before it becomes big. For now, a large part of mobile music revenue comes from ringtones with an average of 500,000 downloads per day.
“Most of the growth in mobile music is driven by monotones and ringbacktones,” says Mandar Thakur, general manager, Soundbuzz, an online and mobile music retailer, which provides music content to Bharti Airtel Ltd, India’s largest telephony company.
Given the growth of the mobile subscriber base, the mobile music trend is bound to grow, say service providers. “Around six million subscribers are being added every month. In the past 11 months, we have added around one million subscribers a month,” says a Reliance Communications spokesperson, who did not wish to be named.
The Cellular Operators’ Association of India, in its latest report, said mobile subscription base has grown to 121 million in March 2007, while research firms put the size to over 200 million. The Internet & Mobile Association of India estimate that the size of the mobile music market (ringtones and ringbacktones) at Rs1,026 crore for 2006.
What’s interesting to note is the role record companies have assumed in the face of the increasing digitization of music. Analysts say, globally, the physical music industry is on a decline and India, too, is witnessing that phenomenon.
According to a study by Soundbuzz in association with audit firm PricewaterhouseCoopers and the International Federation of the Phonographic Industry, sales of digital music, to which mobile music contribute more than 98%, grew from Rs450 crore in 2005 to Rs800 crore at the turn of 2006, while the physical music industry slipped from Rs1,000 crore in 2005 to Rs750 crore in 2006.
The study says that the music industry, including physical and digital, will continue to grow in India and will be worth Rs4,100 crore in 2009 against Rs1,450 crore in 2005. The growth, however, will be fuelled by mobile music, which, according to the study, will account for 88% of the music industry’s revenues in 2009.
Music industry players attribute the fall in physical sales to shrinking cassette volumes. “The drop in cassette sales has outstripped the rise in CD sales, resulting in a decline of overall physical sales of well below 10%,” says T. Suresh, general manager, EMI India.
“Cassettes cease to be an attractive format resulting in decline in cassette sales, which has been anywhere between 25% and 30%,” adds Ashwani Sharma, general manager, Super Cassettes Industries Ltd, adding, “Who would like to buy a cassette for Rs35 when you can get an MP3, which has 50 songs compressed in it, for the same or lesser price?”
Both say other formats such as CDs, MP3s and DVDs are showing significant growth and all music companies, including the regional players, are offering music in multiple formats.
Industry executives also claim that the growth of physical music has been limited because there aren’t enough retail outlets such as Planet M and Music World. “You need the right retail environment to showcase exhaustive artist-backed catalogue music,” says Vijay Lazarus, president of the Indian Music Industry and also of Phonographic Performance Ltd, which governs all music companies for non-physical products. He believes that even though digital music is growing fast, it can never surpass physical music. Digital music comprises only 10% of the world’s $35 billion music pie, he says. And record music company officials argue that a mobile platform can’t really sustain such a huge reservoir of music.
Then there are the technology issues involved in mobile music. “You need GPRS support to be able to enjoy full track downloads. And how many can afford these expensive 3G handsets?” he asks.
But no one’s actually complaining since everybody’s making money. “While music companies pocket 25% of the revenue from each download, 45% goes to the operators, 15% goes to the government and around 3-15% to service providers, depending on the technology and level of service they provide,” says Thakur.
The future, however, will see rich media products in the form of full track downloads, video downloads and ringbacktones. Taneja estimates that “over 280 million music-enabled devices would be sold by 2010” around the world. “Our research shows that mobile devices are expected to become the de facto channel for delivering music,” he adds.
Lazarus isn’t convinced by these numbers: “The physical music industry will see a further impetus in the next five-seven years with the growth of retail spaces and artiste-backed catalogue music.” Call it the digital divide or changing times, music ceases to be enjoyed in one format. It’s about variety and multiple options, says Suresh. The future will see both formats—the physical and digital—growing and often striking interesting synergies, he adds.
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First Published: Mon, Apr 23 2007. 03 10 AM IST
More Topics: Marketing and Media | Campaign |