The Hindu Business Line : Digital music growth threatens CD existence

Mumbai May 18 An increasing number of Indians travelling to work are getting hooked to mobile phones, iPods, MP3 players and other music playing devices.

Does it mean the end of the CD and cassette era in India? "Not so soon, because PC and broadband penetration is slow in India; but eventually it will happen," says Mr Farokh T. Balsara, Industry Leader (Media & Entertainment Practice), Ernst & Young. A FICCI-PricewaterhouseCoopers study, titled `The Indian Entertainment & Media Industry - A Growth Story Unfolds,' has suggested that the surge in digital music space is likely to overtake revenues of CDs and cassettes in the next five years.

Second largest market

A space likely to grow by 25 per cent to Rs 180 crore by 2011 will make India the second largest market in the world outpacing the physical format by 2007-end, it added.

Falling prices and piracy further threaten the conventional music space.

Despite aggressive talk of curbing piracy, the industry is losing around $53 million, according to the study.

A `Global Media & Entertainment Survey' by Ernst & Young suggests that Internet media providers are most likely to be market winners in the future.

"In India, smarter companies will adopt dual strategies of presence in physical and digitised music format. Internet media is something they can no longer ignore," says Mr Balsara.

Mr Sunil Meghrajani, Controller (Publishing & New Media), Saregama, believes that one format cannot be replaced by the other, but will complement each other, giving more choice to the consumer.

"I might want to have my music system running when my friends come over, but while travelling I may use my mobile phone or iPod."

Companies like Saregama, T-Series, Rajshri and others have a limited presence in the digitised music space.

However, 8-10 music companies are likely to enter the field in the next two years, says Mr Balsara.

According to sources, Sony BMG is looking to get into the space soon. Saregama plans to launch its dedicated music portal by June-end.

With a range of three lakh songs from its content base and music from other record labels, the company claims it will have Asia's largest music Web site with about half a million songs at the time of its launch.

"It will be a one-stop shop for all music requirements starting from downloading ringtones, purchase of DVDs and VCDs of Hollywood films, customising of one's own music CD as per choice of tracks and more," says Mr Gavin Dabreo, Marketing Head of Saregama.

Despite the concept of `anytime, anywhere' entertainment catching the imagination, mobile music is also not free from piracy. It is estimated that around five lakh ring tones are illegally downloaded in India every day, according to the FICCI-PricewaterhouseCoopers study.

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