The digital chord
Digital distribution is slowly but surely revolutionizing how people make music and how you hear it
December 27, 2012 / 16:14 IST
By Avanish Tiwary and Pranbihanga Borpuzari
Technological advancements in the music industry are ringing stirring tones for musicians. Various digital platforms like YouTube, subscription-based music services, unlimited music streaming, among others, are turning into a viable option instead of sales of CDs and DVDs. For instance, Surojit Dev, lead drummer of Delhi-based Indie band Them Clones says he is busy strategizing digital distribution of the band’s gigs performed across various nightclubs and pubs.All four members of the band have a full time job and performing gigs is their passion. On an average, for each gig they charge Rs. 1 to Rs. 2 lakh, apart from the money that comes from the sponsors-usually alcohol brands. But what has been paying off for them and their music is the revenue they get from advertisers present on the digital distribution channels.Earning via digital channels
Google’s video sharing and uploading website YouTube recently opened up for advertising. Along with similar channels, it is slowly, but surely changing the way the music industry and music entrepreneurs are doing business.According to a FICCI-KPMG 2012 report on Indian Media and Entertainment Industry, “While 2010 was the year of structural shift from physical formats to digital ones, 2011 provided users’ viable options of music consumption through different digital platforms.” The music industry’s revenues registered a five percent growth from 2010, at Rs. 900 crore in 2011.Distributing or selling music content over the Internet digitally has its own pitfalls; piracy being the biggest menace. Yet many music professionals see that as a boon.“We love what piracy does to music-it makes sure that it reaches everywhere and to everyone at a minimal cost,” says Dev, from Them Clones.“People may have not known us before, but due to piracy we have become one of the most downloaded voices in India.”There is no doubt distribution of songs on digital platforms lowers entry costs and increases reach. Nirvana Digital, a two-year-old company helps young budding singers and artists earn revenue through digital distribution.Distribution network
“Physical distribution of music through audio CDs do not make business sense as the prices of CDs have come down to as low as Rs. 39,” says Pinakin Thakkar, Founder, Nirvana Digital. Nirvana Digital has launched a YouTube content creator network for ease in distribution and Thakkar says this has shown 115 percent year-on-year growth on YouTube channels since last year.Indian artists are no longer paranoid or hell-bent on signing a deal with big music labels like Universal and Sony, Thakkar says. “Instead, they are focusing on new strategies to increase their presence online and sell music digitally.” A key factor behind the digital boom is “advertising, which has grown exponentially and so have the ad rates, thus fueling this distribution channel.” PricewaterhouseCoopers’ (PwC) Entertainment and Media Practice Leader Timmy S Kandhari agrees that most music distributors have gone digital in India. “The other physical forms of distribution have gone down completely. Nobody buys CDs and their sales are also declining year by year. Any digital platform will help in spreading music,” he says.Content rules
The shift in music consumption became more evident when Channel [V], the music channel of Star India, decided to do away with its music portfolio starting July this year. What triggered Channel [V] to do that?The truth is that with a number of channels dedicated to music-9XM, VH1, ETV Music, E24, Sony Mix and other mediums available to listen to music, it has become difficult to engage the audience to one particular music channel. With viewership nosediving, there has been a steep cut in advertising rates which makes it tough for the business to run. MTV from Viacom18 Media (a part of Network 18 which publishes Entrepreneur) has also decreased acquired music content to around 30 percent and is now concentrating on original music content through different shows like Coke Studio, Sound Trippin and Unplugged. Sponsors too have been good to them as they see something new and creative happening in this hitherto stagnant industry.“Brands are also realizing that there is so much clutter out there that by putting a 30-second commercial, not many are going to love your brand,” says Aditya Swamy, EVP and Business Head, MTV India. “Content is increasingly becoming a very powerful tool to connect with people.” MTV has managed to rope in multiple marquee sponsors-Coke for MTV Coke Studio, Intel is the face for Sound Trippin and Royal Stag for Unplugged. Independent music labels like Universal and Sony Music are now getting associated with shows creating original content as they ensure that the channel stays relevant from other music channels.“When MTV and Channel [V] started out in India, it was a time of different possibilities-music videos were the rage that time. Music videos don’t support the music channels financially anymore,” says PwC’s Kandhari.Buying music online
Attempting to tap into the changing business scenario of the Indian music industry, Flipkart has been selling music legally on their e-shopping website’s new section, Flyte.“With Flyte, India now has its first comprehensive legal online platform for music purchase,” says Sameer Nigam, Vice President (Digital) at Flipkart. “The demand for music amongst Indian audiences is high. So if we can offer them a delightfully easy way to purchase and consume their favorite music, we can expect large number of customers to start paying for their music.” The Flyte Mp3 storefront has already sold over 600,000 downloads. “The sales will only grow in leaps and bounds as we improve our consumer product offering,” says Nigam.However, experts have reservations about people buying music online, owing to the piracy issue. “It’s a different matter if all the downloads are being paid for or not. I think that is still a challenge. But the fact remains that the music is taken down from its physical format and is being consumed digitally,” Kandhari says. The KPMG report posts its uncertainty on selling music online. The report states, “Segments like radio and a significant portion of online content are available free of cost to consumers. Owing to this, the Indian consumer is still not used to paying for content.” Whether or not people will pay for downloading music online, it is evident that digital content is the future and it will see many more companies exploiting this segment.As Them Clones’ guitarist Gucci Singh says, “We are lucky to have Dev. His digital strategies have managed to rake in the money till now.” That is good music, for sure.Related Posts Internet newbies will drive e-commerce: Sachin Bansal
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