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Trends in the digital music segment in 2014

Online music in India continued to be dominated by Bollywood music in 2014. However, many services are offering offline modes in a bid to get more revenue and keeping in mind that YouTube will be offering similar services soon.  We look at some of the trends that we’ve noticed.

Trends and developments in 2014

– Telecom operators get into the online music streaming business: Bharti Airtel, the countrys largest telecom operator, this year launched Wynk, an Internet based music streaming service which allows streaming of a maximum of 500 songs for Rs 129 per month without data charges. We were impressed with Wynk because it lacked the typical product myopia associated with telecom operators in the past, which restrict streaming to its own network, with the intent of monetizing usage by the kb or minute.  We have some doubts that the service might be in violation of Google Play and Apple Store’s policies. More on that here. Prior to this, Vodafone had also started a music service.

This puts telecom operators in an enviable situation of competing with online music streaming companies, while still controlling the access to these services. Net neutrality will be critical for ensuring that there isn’t unfair competition from telecom operators. They already have data bundling, which is something that their competitors can’t do.

– Offline modes and videos: Hungama, Saavn and Gaana have started pushing their offline and video modes for their services. This is mostly done on their paid premium  services.  For example, Saavn tied up with e-commerce player Snapdeal to offer Android users making purchases through Snapdeal’s mobile site free subscriptions to their premium service for two months. Hungama’s new offline mode gives songs with higher bitrates of up to 320 Kbps. The offline mode allows user to cache unlimited songs and videos to their phones for offline listening/viewing and Hungama claims that it’s the only service which allows offline videos. Gaana this year added a music video section. Hungama also tied-up with Aircel to offer its ad-free PRO service free for two months to Aircel subscribers.

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This seems to be a way to pre-empt competition from YouTube as the video giant is working on a paid service called Music Key to enable offline listening. YouTube is also looking to expand on its existing massive catalog of music for -video-free songs and has been signing up with record companies for the same. However, it is also interesting to note that MixRadio users in India will no longer be able to renew their unlimited download subscriptions for offline listening.

– Regional music catching up: Pawan Agarwal, business head and vice-president at Gaana told Medianama that regional music consumption is growing faster than Bollywood music, although the latter still dominates the online music scene in India. For example, Digital distribution company Believe Digital has signed up with India regional record label, Aditya Music India for distribution of its music catalogue across international digital platforms, including iTunes, Spotify, Amazon, Deezer and Pandora among others. Aditya Music’s catalogue includes Telugu, Tamil and Kannada film songs along with Carnatic classical songs, devotional and folk songs. Gaana earlier this year has launched mobile apps which allow users to access categorized music according to language, artists and genres.

– Rdio buys almost-defunct Dhingana: US-based music streaming website Rdio has acquired Indian music streaming website Dhingana in March this year. Dhingana had shut down its operations in February 2014 a couple of months after the biggest music label in India, T-Series, decided not to renew its contract with the company. With the acquisition, Rdio gets an Indian user base that was using Dhingana. It was among the three more popular music streaming services, along with Saavn and Gaana. While the user base would have moved on to its competitors now, Rdio can enter the Indian market and offer it their services, with their content, as well as international content.

– T-series ends exclusive approach to mobile: Saavn and Gaana this year got the rights to stream over 133,000 tracks from T-Series catalogue on mobile, essentially ensuring that the mobile catalog isn’t limited to Hungama alone. With the current deal, they can stream songs from the company’s mobile app and even cache them for offline listening with a pro subscription.

Funding activities  in 2014

-Hungama Digital Media Entertainment has raised $40 million in an investment led by Bessemer Venture Partners and participation from the existing investor Intel Capital. Hungama CEO Neeraj Roy told the publication that they plan to use this investment to upgrade its mobile apps and integrate with banking systems for loyalty programs.

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-Music streaming service Saavn has raised an undisclosed amount in funding from Hong-Kong based hedge fund Steadview Capital.

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