Listening to music without paying for it is nothing new (remember the gadget called radio receiver). But this time around, a bunch of Indian firms are trying to replicate the success of Spotifys and Pandoras of the world with desi music. Techcircle.in looks at the top players and what differentiates them from the competitors on the next browser tab, also available for free. But first, here is a roundup of the industry and the market opportunity these online music streaming sites are chasing.
The most striking thing about music is that it is one media segment that has gained the maximum traction in the digital arena versus the physical product. According to International Federation of the Phonographic Industry (IFPI), as much as 32 per cent or almost a third of the total revenues in the music industry came from digital sources in 2011 â€“ much higher than comparable numbers for other media segments like movies, newspapers and books. So the world is moving faster towards digital music, which is also apparent from the decline in revenues from physical albums, compared to the growth in digital music sales. Digital music revenues were up 8 per cent to $5.2 billion in 2011, as per IFPI.
The Indian market is a tiny speck in this but still mirrors the trend. According to FICCI KPMG Indian Media and Entertainment Industry report 2012, the local music industry hit revenues of Rs 900 crore ($160 million) in 2011, up 5 per cent over 2010. The industry witnessed 19 per cent Y-o-Y decline in sales of physical music (CDs and cassettes) although there had been 24 per cent jump in sales of digital music in the same period.
There are essentially three types of digital music content on offer legally â€“ music streaming, Internet radio and downloadable digital music.
The third format is the latest among the three and India's largest e-commerce firm Flipkart.com has already launched Flyte â€“ arguably the first legal digital music store in the country (read here and here for more).
Internet radio, where users can choose genres with streaming music stations rather than pure music-on-demand, is a still-emerging concept in India (although in the US, Pandora has had success with its service). But at least two Indian startups are looking to build a presence in this space. While Radiowalla has just launched its service, another startup called Timbre Media is looking to revive the popular satellite music radio service WorldSpace in the online world.
Then there are the music streaming sites like Dhingana, Gaana and Saavn, offering Indian music (some of them also feature international music) and aggressively integrating their services with social networking platforms.
In this format, users can listen to the music for free but can't download it. Another pain point is the non-availability of high speed Internet, especially if you are accessing these services through mobile Internet. However, this issue can be resolved soon with next-generation 3G and 4G services being rolled out by the Indian telcos besides the slow but steady expansion of broadband, connecting computers to the Web. The end point is that â€“ streaming as a service represents a market opportunity.
As of now, all these players have ad-supported or other business models for generating revenues but none has taken the bold step of launching a paid subscription platform, a trend that is gaining traction in the developed markets. Here's a quick report card on each of the key players and how they are spinning the virtual disc to churn out money.
Launched in February 2007 by the Shinde twins, Snehal and Swapnil, Dhingana features a 3.5 million-strong inventory including Bollywood and other Indian music and covers as many as 35 Indian languages (Hindi, Tamil, Telugu, Kannada, Malayalam and Bengali, among others). The firm is working with more than 350 music labels.
Headquartered in Sunnyvale, California, the company has its India office in Pune and currently has more than 12 people on board of whom six are operating from the US and the rest from India. By the end of 2012, the company plans to scale up its team to 20 and will hire more marketing and sales people.
According to Dhingana, it also offers adaptive streaming to ensure that users who have slow Internet connections are automatically shifted to lower bit rates while those with better speeds can listen to higher quality music. Dhingana apps are also available on Facebook App store.
The service is ad-supported and 30 per cent of the company's revenues come from direct advertisements â€“ mainly sold as premium display ads and visible when a user is on the player page, album page and playlist page. The remaining 70 per cent come from selling its inventory to ad networks, which shows that the mobile apps of Dhingana are critical to its business.
Headquartered in New York, Saavn (short for South Asian Audio Video Network) was set up by Rishi Malhotra, Vin Bhat and Paramdeep Singh and debuted in May 2010 with 150,000 songs. It attracted a million users in the first six months and has scaled up quickly since. As of June 2012, the company had 1 million unique visitors, according to comScore, and 8.33 million page views. But Saavn says it is catering to 10 million active visitors per month and offering songs in Hindi, Tamil, Telugu and Marathi. The company is also operating from Mumbai and Silicon Valley.
Saavn provides dynamic audio bitrate adjustment for better streaming on any connection (EDGE, GPRS, 3G, 4G and Wi-Fi). The company has released its feature phone app in June, with a catalogue of 1.1 million songs. Apart from an integration option with Facebook, Saavn is the only South Asian digital music company that has a partnership with Google. It is also available on Facebook App store.
Saavn makes money from ad revenues against streams of licensed content. Various brands like Samsung, Google+, Hyundai, Pantene, Lay's, Pepsi, Domino's Pizza and Nokia are its key partners.
Besides a variable upfront fee, record labels get 30 per cent of Saavn's gross. On the other hand, brands advertising on Saavn â€“ both on the Web and the mobile â€“ also get an extended reach to its sister properties like SmasHits.com and Saavn's YouTube channel.
Gaana, a music streaming site from the Indiatimes stable, has more than 10 million songs to choose from, making it the biggest in terms of music choice. It has 2.9 million unique visitors in June 2012 (as per comScore) and at 19.2 average minutes per visitor, Gaana claims to be one of the leaders in terms of the time spent per visitor. It is available for Windows 8 store, HTML5 Web app for iPad and the Web.
With a vast repertoire of popular Bollywood, Hindi, regional and international music (the only one catering Latin, Funk, Folk, Reggae, Rock and Roll, Jazz and more), Gaana is currently available in 38 markets worldwide. It also offers music suggestions, based on the album that a user is listening to, thus enhancing the overall experience.
The site runs on brand sponsorship-based business model. This includes site skins, brand channels and pre-roll (jingles) for clients in order to generate revenues. For instance, it is integrated with brands like Tuborg and Toyota, where they have playlists associated with the brand.
(Edited by Sanghamitra Mandal)