While much of the attention has been focused on the SMS Spam guidelines from India’s telecom regulator TRAI, another directive is looking to address subscriptions to content and billing practices. These guidelines will have an impact on the mobile music business – namely caller ringback tones and mobile radio. MediaNama spoke with Neeraj Kalyan, President of T-Series, one of India’s largest music labels, about how these guidelines impact their business, and what they are doing about the guidelines:
MediaNama: What part of your music business comes from mobile?
Neeraj Kalyan: Mobile contributes around 40%, and the rest is from Radio, TV and Physical put together. With these guidelines, the overall business – the music on demand, CRBT push by way of Outbound Dialer will get affected to an extent, but nothing drastic.
MediaNama: How does it impact your business?
Neeraj Kalyan: If you look at the overall objectives of the guidelines, it is extremely laudable, because people have been extremely upset about the calls and SMS’. At the same time, we also have to understand marketing (using) SMS push as well as VAS. You can’t expect a guy to basically wake up in the morning, and expect that he is only thinking about selecting his song for his Ringback Tone, or for downloading a song. To download, he has to send an SMS (email) or a fax. That is absurd. How many times have you done that?
MediaNama: Let’s leave aside email and fax…
Neeraj Kalyan: Even on SMS. What percentage of people in India know how to send an SMS?
MediaNama: You tell me…
Neeraj Kalyan: Very few. It’s a single digit percentage. 40% of the population in India is BPL (below poverty line). You can’t expect them to send an SMS. So the basically, the objective with which it has been done is good, but the TRAI has to make a complete differentiation between all the services. Otherwise, there will be a negative impact on the growth.
MediaNama: Have you seen any impact so far?
Neeraj Kalyan: It is too early to gauge any impact, but in the long run it may have an impact on growth.
MediaNama: We’ve heard rumors that renewals have been affected by as much as 50% in some circles where this directive has been implemented…
Neeraj Kalyan: What I’m saying that the growth will be affected. You always have new subscribers coming in.
MediaNama: But hasn’t there also been an instance of false billing in the market, where money has been deducted, or people have been subscribed without their consent?
Neeraj Kalyan: In every business and every sphere of life you have black sheep. But, because of one guy, you cannot penalize the entire industry.
MediaNama: Then what’s the solution?
Neeraj Kalyan: There have to be guidelines, checks and measures to be taken care of, but giving sweeping guidelines, that they have to confirm and reconfirm it every month…
MediaNama: But reconfirmation is only if they haven’t got sufficient balance, right? If you’ve a Rs 30 subscription and there isn’t sufficient balance, say only Rs 15, then for billing a customer for those Rs 15, you have to get a confirmation. If there is sufficient money anyway, you get charged.
Neeraj Kalyan: The marketing push which the VAS industry was giving will go away. The growth of the music VAS industry will go away. It will get affected negatively. But the industry is mature, to come out with solutions for this.
MediaNama: What would be your solution? What should the TRAI directive been like?
Neeraj Kalyan: The entire industry is being penalized for the actions of 2-3 black sheep in the industry. Because of them, the entire industry cannot be penalized. The solution is self regulation. Like even in the TV industry, you have the IBF and self regulation.
MediaNama: There was a warning signal given last year with press star to copy directive last year, but that was not paid heed to.
Neeraj Kalyan: But the way it has been tabled, is not good for the growth of the industry.
MediaNama: What part of the value chain were the black sheep?
Neeraj Kalyan: some small time service providers. An organized company would never ever do something like this.
MediaNama: So there was no pressure from mobile operators to increase VAS revenues at the circle level?
Neeraj Kalyan: There are ways to increase revenues, but not debiting it like this. If it is coming from the operator, it doesn’t mean that you start debiting them. It means you have to improve on your marketing. That happens only with small timers.
MediaNama: How are you looking to address the situation?
Neeraj Kalyan: We are evaluating the impact as of now, and we should be able to come up with some solutions. As of now we it would be too premature. We need some more time.
MediaNama: What is the way forward from here?
Neeraj Kalyan: There have been some meetings with the TRAI,and they have assured us that they will look into the grievances of the VAS industry, and we’re expecting some sort of directive from the TRAI on this.