Plug in, pay, download: digital music vending hopes to rock

Plug in, pay, download: digital music vending hopes to rock
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First Published: Mon, Aug 20 2007. 12 39 AM IST
Updated: Mon, Aug 20 2007. 12 39 AM IST
You can call it a music refill on the go.
Mango DVM plans to launch a network of 50 digital music vending machines across Chennai by early next year, part of a very ambitious plan to install 400,000 vending machines across India by the end of 2010.
These kiosks—located at airports, bus and railway stations as well as retail locations—will sell digital music for Rs12-15 a song.
Customers can load the music of their choice onto a variety of devices, such as MP3-enabled mobile phones, portable music players, data storage flash drives or even compact discs. The digital vending machines, sourced initially from Via Technologies, Inc., a Taiwanese company, will have a touch screen to offer interfaces in Tamil, Malayalam, Kannada, Telugu, Hindi, Marathi, Gujarati and Bengali, apart from English.
Mango Digital Vending Machines Network Pvt. Ltd (Mango DVM), the start-up that plans to sell digital music, has raised Rs50 lakh in seed capital from five angel investors.
The investors, at the Chennai Fund, which supports early-stage entrepreneurship in Tamil Nadu, are charter members of The Indus Entrepreneurs, a global network that supports?entrepreneurship?am-ong people of Indian origin.
Mango DVM director R.S. Ramkumar pitched his business plan to investors at the final round of a business plan competition organized in May by the department of science and technology and chip maker Intel Corp.
Digital music sales are growing rapidly in India, making it the second-largest marketfor digitized music in Asiaafter South Korea.
According to a survey by Soundbuzz Pte. Ltd, a Singapore-based digital music services provider, more than 88% of the total projected revenue of Rs4,100 crore the Indian music industry will earn by 2009, will come from the sale of digital music.
“CD sales are dropping like a stone, but not music sales,” says Atul Chitnis, who is a mentor to online independent radio station Radio Verve in Bangalore. Industry estimates indicate that sales of CDs, audio cassettes and other physical media in India are declining, halving from Rs1,000 crore in 2005 to Rs500 crore by 2009.
In response to this trend, retail music stores such as Planet M, a Bennett, Coleman & Co. subsidiary, plan to roll out kiosks with downloading software that will allow customers to pick up digital music at more than 75 stores countrywide by the end of 2008. Bennett, Coleman & Co. also publishes The Times of India and The Economic Times.
In Chennai, Giri Trading, an audio company that sells cassettes and CDs, operates kiosks for digitized devotional music at both Chennai airport and adjacent to the Kapaleeswara temple in Mylapore, which is a hub for devotional merchandise.
“It is the old juke-box model, except that now customers can pick their music and load it onto the media of their choice, be it a CD or a USB port,” says S.L. Saha, secretary of the South India Music Co., (SIMC) an apex body that represents 23 music recording companies in south India, and has a catalogue of more than 30,000 songs that it has licensed to digital music providers such as Mango DVM, Giri Trading and even mobile phone firm Reliance Communications Ltd.
SIMC will have a revenue-sharing model with Mango DVM, according to which, Rs6 from every song sold at a Mango vending machine for Rs12 will go to SIMC.
“It is about how simple an interface can vendors offer,” says Saha, adding that a customer at a digital vending machine must be “just three clicks away” from getting a song of his choice.
Mango DVM is also banking on the growth of mobile phones in India to spur the sale of digital music.
“As mobile subscriptions touch the 300 million mark by 2010, we hope to get a 20% share of that consumer base,” says Ramkumar, who also plans to install his range of digital vending machines at stores selling consumer electronics and mobile handsets.
Consumers can choose a bundled option by picking 50-100 songs loaded onto a portable media player or mobile phone of their choice. “We will offer consumer finance for these purchases with instalments of about Rs200 per month in partnership with banks,” says Ramkumar.
Soundbuzz estimates that the sale of digital music for mobile devices in India will touch Rs3,601 crore by 2009, up from Rs450 crore in 2005.
“As investors, we see potential in the retail consumer sector where technology-enabled solutions are made available to the common man and Mango DVM has a potential to reach the mass market,” said K. Pandia Rajan, chairman of MaFoi, a human resources consultancy, and an angel investor in Mango DVM.
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First Published: Mon, Aug 20 2007. 12 39 AM IST
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