It’s truly

India (SANEPR.com) May 2, 2008 -- Indian culture has always been deeply linked to music. We Indians are known to be a musical race! We are also a country which is young & vibrant, whose young people are evolving in their tastes and are more open to accepting changes. Nearly half of India’s population today is under the age of 20 with a huge spending power, and that has brought about a sea of changes in India’s economy, giving birth to a series of trends and a plethora of products to cater to these emerging trends.
Digital music is one of the prime examples of this changing face of India, a concept that has truly revolutionized the way Indians consume music. The young Indian is mobile, outgoing and veering towards a wirefree life. Mobile phones have become an extension of a user’s own personality with caller tunes, ringtones, polytunes and the latest mobile phone models becoming a form of personal expression. Mobile phones are no longer just a means of communicating; they have transformed into veritable entertainment consoles in their own right. This is evident from the fact that handset manufacturing companies are releasing newer, sleeker products with built in features such MP3 players, FM radio, Walkman, Real Player along with storage capacity of anything between 1000 – 3000 songs. With the way these phones are flying off the shelves, it would be fitting to say that Digital Music is here to stay in a big way.

Most of the recent studies conducted on the Digital Music industry in South Asia second this perspective. A study from Nokia has shown that the youth market for mobile phones in India has grown annually by 300 percent over the year, with music accounting for 40 percent of mobile phone companies’ revenues in the country. Last year India was the second market in the world to see digital music outsell physical music, with mobile sales growing to an estimated Rs 3,600 crore, by 2009 from a base of Rs 1,026 crore in 2006.The mobile music market in India is at present valued at approximately Rs 1650 crore and is growing at an estimated CAGR of 40-50%.
It has been observed that better accessibility and a penetration rate of around 18% has helped Mobile Music surpass Online Music sales in India. Online Music makes up less than 5% of the digital market in India, while Mobile music covers the rest.

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Another interesting point is the fact that the penetration of high-end, music enabled phones is not restricted to the urban youth of the country, doing away with the common error of crediting growing spending power to people residing in the metros and cities of India. Infact, it is the interiors of India and the tier II, tier III towns that actually form a huge segment of the upwardly mobile, cash-happy and trend setting crowd. These individuals are willing to spend more money to buy high-end products and do not mind shelling out more cash to have cutting edge music-enabled phones. Add to this the fact that the penetration of mobile phones in India is growing at a fast pace, and you have partly answered the question – How is Digital Music so popular in India?

This brings us to the second part of the answer about the popularity of Digital Music, especially mobile music in India. The growth rate is due to the opportunities presented by the sheer size of the Indian market and the colossal Indian music and film industry itself. Indians have a strong affinity for Bollywood and Devotional music, which they would like to listen to on-the-go, resulting in a huge demand for such ringtones and caller tunes. In 2006-7, about 6, 00, 000 to 8, 00, 000 ringtones were downloaded in India, contributing to a revenue of about Rs 180 crore in that fiscal year The Mobile VAS market, which chips in with about 25% of the total music business in the country, is dominated by these music categories. Today, telecom operators are using mobile music as an opportunity to differentiate themselves from their competition and to boost the declining average revenue per user from voice-based services. Constant innovation is probably the key word when it comes to differentiating from competitors.

Going by what the experts say, the future of India’s Mobile VAS Industry, which rides heavily on digital music content, is upwardly mobile, and truly on-the-go!

The author is Manoj Dawane, CEO, People Infocom (Mauj)