Home >industry >media >Digital music industry in India expected to cross Rs3,100 crore in revenues by 2020: report

Mumbai: India’s digital music industry is expected to cross 3,100 crore in revenue by 2020, while the number of online music listeners in India is expected to reach 273 million, according to consulting firm Deloitte India in its report Digital Media: Rise of On-demand Content.

The study was conducted to analyse the evolution of the on-demand content ecosystem and its future.

The digital video subscription market (excluding advertising) alone is estimated to be around 3,500-4,000 crore by 2020, the report says. It also says the increase in online music users will be the outcome of increased demand for regional content. The paid subcriber penetration among online music users is expected to increase to 10-15%.

According to the report, social media and entertainment are the two activities on which Indian mobile Internet users spend their most time, followed by games, general search, and emails. Of the total time spent on digital media by the youth, about 21% of it is spent on audio and video entertainment, the report said.

In line with this, marketers are now shifting their advertising spends towards digital media. Around 36% of total ad spends are expected to be directed towards the digital space.

According to the report, the growth expectations for the overall digital advertising market in India, including cannibalisation of ad revenues from other traditional segments like TV, radio, and print media, show that the digital ad market will be worth 35,400 Crore by 2020.

“Increasing internet and smartphone penetration along with the rise in spends on entertainment by the youth will drive the on-demand digital content industry," said Rajat Banerji, senior director, Deloitte India.

He said the digital media consumption pattern has changed drastically compared to a decade ago when ringtones were expected to boost the music industry’s revenues. “With a remarkable improvement in mobile device technology and internet connectivity, marketers are now shifting their business models in tune with viewer preferences towards digital media, from traditional media," said Banerji.

Internet traffic originating from mobile devices has already surpassed desktop Internet traffic. The total number of Internet users crossed 254 million in September 2014, out of which 235 million users accessed the web through their mobile devices.

According to the report, the number of Internet users in rural India is expected to touch 138 million by June 2015. In urban India it is expected to reach 216 million.

The report says the video industry in India is seeing a shift towards digital content. Younger audiences are leading video consumption. This is expected to rise with improved network speeds, demand for HD (high definition) video content, along with standard definition online video streaming. The total Internet video traffic in India is expected to make up 72% of all-India Internet traffic by 2018.

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