Diversity of Indian market presents a challenge to online music players

MUMBAI: After a long time Google has finally got into the online music business by launching a service. However if it is to make a mark in Indian then it will have to adapt to a market that offers diversity. There is a fragmentation of music content ownership here. There is a long tail of content owners. At the same time search, social and curated functions have to be combined for any online music service to succeed.

This was point that came out during a session at Nokia Music Connects Summit called Internet/Mobile Radio and Streaming Services. The moderator was Tag Strategic managing partner Ted Cohen. The panelists were The Orchard VP, GM Prashant Bahadur, EMI Music India MD T Suresh, music composer Raju Singh, Spice Digital head – business development and alliances ShehzadAzad, Hungama Digital Media Entertainment COO – Consumer Business and Allied Services Siddhartha Roy, Shemaroo Entertainment director Jai Maroo and Aircel head Vas Pradeep Rao.

Maroo noted the diversity challenge for overseas players looking to enter the music space here. At the same time it is easier to experiment now than it was four years ago. Today content owners with a large library would look at online services in an open way and try to figure out where it might be two to four years down the road.

ShehzadAzad noted the fact that India is a price sensitive market. According to him it took Android five years to reach critical mass here. The iPhone has not impacted India due to the price.

Bahadur noted that the challenge for international online music services looking at India is not licensing. It is about consumer experience. iTunes experience is similar in most markets apart from maybe Japan. If it wants to make an impact in India then it will have to change its approach from the point of view of genre, language perspective.

Orchard is a digital distributor of music and he says that transparency is one of the things he looks at in doing deals and looking at business models. Transparency makes it easier to license ones catalogue. His aim is not to capture a percentage of the revenue pie but to grow it. He also noted that searchability in streaming helps niche music. If you are subscribing for five bucks then it doesn’t cost much to experiment. The problem is that search engine functionality is poor in many online music streaming services. That is because they are not as data driven as Google. The social nature of a service can also help drive revenue and business. Recommendation is another critical part of the business.

ShehzadAzad noted that his company has been running a music streaming service for five years now. With even a basic mobile phone one can access the service even if he/she is in a remoter area. The challenges are how to communicate to the last mile as well as falling Arpus. At the moment the restrictions in GSM means that the quality of a song is at time limited. His company has enabled search through SMS. 10 songs are sent to a customer who is searching for something. One just has to hit the access code. This enables ease of use which is important.

It was noted pull is the sustainable model. Streaming services will make content discovery easy. They can find the long tail content that they are looking for.

Roy noted that while smartphones are not there in India in the future an ecosystem will be there for smartphones at an entry level. Also as broadband penetration and levels grow for the PCA and tablet increased selection and depth of content is coming into play.
Singh noted that music streaming allows him to reach areas where his albums are not available. Services can also be used as a demo pad. ShehzadAzad added that for somebody like Singh a streaming service can be used as promotional tool at a regional level. His service offers interactivity which allows the composer to get feedback from consumers.

At the session it also emerged that while non film music is not as big as Bollywood, it has a sticky fan base. For non film music to succeed one needs a large repository of music in one place. This would allow for recommendations. It was noted that consumption is happening in tier two, three, four towns. There is network seeding happening but the infrastructure is not there to give enough bandwith. The situation is expected to change by 2014. The important thing is that when a consumer goes to a buy a mobile phone he/she expects to be able to consumer video and audio content. That was not the case a few years back. Maroo noted that video consumption is going up on the mobile. That is significant given the fact that music gets there first in terms of benefitting from the mobile. article:

Posted by Ted • Saturday, November 19, 2011 .