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Music industry set to hum 3G tune
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The Indian music industry, bogged down by issues relating to piracy and illegal downloads, could get a revenue boost with of 3G.

Saregama India, which has one of the largest music catalogues in the country, is watching the scenario closely. It has already launched a Web browser designed for mobile phones which will allow consumers to access its catalogues, download and buy music from the site through their handsets. “This is beyond the existing VAS (value-added services) content such as ringtones that are available to consumers,” says Mr Apurv Nagpal, Managing Director.

The Saregama catalogue offers over 50,000 songs in 10 languages including film songs, ghazals, devotional and regional music. With 3G, there would be high-speed data transfer spawning a whole new ecosystem and creating a new revenue stream for the industry.

“Global trends have shown that the availability of 3G has substantially benefited the industry. In addition, the new mobile devices coming in the market are virtually as good as music players,” said Mr Hiren Gada, Director, Shemaroo Entertainment. In his view, the industry has to look beyond revenues from sales of CDs to fight piracy and illegal downloads.

The PwC report on the media and entertainment sector says sales of CDs, which contributed to around 76 per cent of the overall revenue of the music industry, saw a sharp fall in 2009 to 53 per cent.

This will continue with online and mobile VAS eating into its share.

“By 2014, mobile VAS is expected to contribute to over 70 per cent to the music industry,” said Mr Timmy S. Kandhari, Leader, Entertainment and Media Practice, PwC India. According to industry officials, Bharti Airtel became the largest music company with the revenues of its mobile entertainment division, Music Bharti, surpassing those of Saregama. It was estimated that 200 million downloads were completed through Airtel in 2009 with most of it coming from caller ring back tunes. Even Nokia launched its online music store where users can download music by registering on the Web site.

The company has tied up with independent Indian record labels including T-series, Venus, Tips, Big Music, Eros and Indian Music Industry . Typically, music companies syndicate their catalogues to (content-selling) counterparts such as Hungama and then sell them to operators on an exclusive/non-exclusive basis.

Telecom operators may also approach them or the production house directly. It is believed that 30-35 per cent of the revenues go back to the music industry and the rest retained by telecom operators.

“So far there is no particular revenue model for the industry as the bandwidth is slow, with the current technology. But with 3G rollout, the delivery system will change, forcing many players to relook strategies,” said Mr Gada.

The PwC report projects the music industry to grow at 28.6 per cent over 2010-14 and reach Rs 2,650 crore by 2014 (Rs 750 crore in 2009).

Source: The Hindu Business Line

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