Even as in.com, a part of Network 18 media company, has shut its music streaming business, it is too early to write off the model in India, according to experts.

The company in a statement mentioned that it has shut its music business as a part of its overall restructuring exercise of the Network 18 group.

Earlier in August, Business Line had reported that TV18 Broadcast, the company that runs CNN-IBN, IBN7 and CNBC-TV18, is going through an organisational restructuring and laid off several employees. in.com had been impacted as most of the employees who got sacked were from the content team.

in.com competes with music streaming sites such as Dhingana, US-based Saavn and Gaana.com, which offers paid services and have mobile applications. However, in.com doesn’t have these offerings.

challenges

Business Line spoke to several players in the space and found out that the while paid download model in India is facing challenges as consumers are moving to the new format of streaming music, which comes free and can be enjoyed at a click of button at any remote place such as mobile, iPad, iPod and similar devices.

Rishi, founder of Saavn, in an earlier interview had mentioned that streaming platform was a scalable model, where revenues generally come through advertising and subscription.

“Consumers in India are shifting fast to the streaming format with the penetration of smartphones and tablets. It has already happened in mature markets like the US, where we have seen consumers preferring streaming format over iTunes,” he added.

The company has seen its user-base growing by over ten times to 10 million in just three years. The total digital music industry is pegged at $400 million in generic revenues. However, the actual market size would be around $10 billion, which consists of pirated versions also.

Meanwhile, Mukund Mohan, Director, Microsoft Ventures, which invests in several start-ups, feels that while there was no problem with the model of streaming, the major challenge was economics, usage and psychometrics of Indian consumers.

He further added there has to be a revenue model, which in.com was apparently lacking, and that can come from advertising which depended more on the number of users.

Rosanna Chan, a tech geek and economist at the World Bank, reiterated that advertising could be the major challenge in streaming business and added that there is a lack of trust among consumers.

No revenue model

The problem with in.com, what experts feel, is that they don't have a revenue model.

A few months back Flipkart shut down its music service platform Flyte, which was a paid download offering. Experts attributed the closure to growing popularity of streaming music among Indian consumers.

Last year in December, Rediff had shuttered its music streaming service Soundbuzz.

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