Home > Uncategorized > With cheap phones within reach ‘The Next Big Thing’ in music is OFFLINE MUSIC

With cheap phones within reach ‘The Next Big Thing’ in music is OFFLINE MUSIC

September 21, 2014 Leave a comment Go to comments

Man listening to music while travelling; Image source: Sony

Phones have gradually developed into devices that symbolize convergence video, music, images and text at one place and find new ways to use and share these, we have new products and services that cater to our growing needs and tastes. Smartphone makers are packing new features in the phones and service providers are getting ready to offer services and platform to cater to our online as well as offline lives.

India is a country with low penetration of Internet and high adaptability to mobile phones and smartphones where the benefits of service providers is still to reach billions who are not on Information highway.

Cheap phones and the NEW ray of hope

Companies including Google, Mozilla and Facebook are planning to reach those who have not benefitted from information revolution.  Google’s Android One smartphones and Project Loons, Mozilla’s ultra cheap smartphones, Facebook ‘s drone project and whatsapp – all are efforts to cover the next one billion.

This has raised hopes in the online music and video industry which has been facing problems with reaching people. In such a scenario today, offline services like music and video on smartphones have a huge potential as they can now plan ways to get content to user in offline mode.

Recent efforts towards catering to the offline population looks very promising. According to Ravi Visvesvaraya Sharada Prasad, a well-known telecom expert, offline music and video services have good potential in India. “This is a Rs. 100 crores industry. Bharti Airtel has overtaken traditional music label companies to become the largest music vendor in India. Bharti Airtel’s one video song for one rupee service is very popular, especially Bollywood and devotional songs and videos. With YouTube offline services coming to India, there will be greater choice for the consumer.”

About offline music service apps in India, Prasad mentions that in India about 100 million people are using smartphones, out of which some 20 million are using Internet. “There are 20 million high end users using 3G”, he says “who would not hesitate paying a fixed monthly subscription for music”.

Music and video services on mobile phones

Hungama, Saavn, Gaana and other online music services has a subscription-based system. When the app is installed on your smartphone you can look for any music you like and listen to the tracks for free. But if your need is a track that you can download and save in your phone to listen later, you can buy a monthly subscription. People have slowly starting to subscribe to these services.

According to Siddhartha Roy, CEO of Hungama.com, the music app “have over 12% of our base that subscribes to our services and have had over 2mn songs that are downloaded ​on an monthly average in the paid services.” The music app has seen more than 7 million downloads, since its launch in the last 17 months.

According to the Indopia, the online hub for viewing movies, the company will “very soon launch an app on android which will let our users download movies in SD quality. They will have to pay for a particular movie,” told Narottam Giri, Head- Content Division to DailyBhaskar. Indopia is also planning around a music app for providing online and offline services in more than 25 Indian languages.

Saavn has not disclosed its latest list of subscribers. However, the company in March 2013 claimed to have about 2 million active users on mobile platform. The company might announce something new later this year.

Android One smartphones launched in India on 15th September 2014 as cheap Android smartphones.

Android One smartphones launched in India on 15th September 2014 as cheap Android smartphones.

Google jumps into this competition

With the Android One now officially out, Google plans for getting YouTube in offline mode also kickstarts. At the launch of the Android One cheap handsets for India, Google announced that YouTube is going to support offline mode in India. This will be via YouTube app that would allow the users to cache videos on their devices for several days and watch them later at your convenience, without a data connection.

Mobile phones make almost 40% of YouTube’s global watch time and over 6 billion hours of video are watched each month on YouTube. One can just imagine the reach of YouTube if the service is accessible without the need of data connectivity.

Why is there a need to say “LET’S GO OFFLINE”?

The need to go offline emerges from the need to tap those who have access to smartphones but do not have access to Internet. Today 40% of the world population is hooked to Internet. This was less than 1% in 1995. But making Internet reach the rest of 60% of world population, major part of which is concentrated in emerging markets is a big challenge today.

According to InternetLiveStatistics the first billion was reached in 2005, second billion in 2010 and the third billion is expected to be reached by the end of 2014.

When we look at India, in the list of top 20 countries with Internet, India is the one with the lowest penetration with 19.19% people on Internet. But the smartphone market is growing with huge leaps and bounds here. According to the Telecom Subscription Data as on 31st July, 2014 released by Telecom Regulatory Authority of India (TRAI) number of telephone subscribers in India has increased to 946.40 million at the end of July. This includes 918.72 million wireless subscribers (users of feature phones and smartphones).

This is precisely the reason why combining phones and offline mode for service delivery is being considered very important.

Harshendu Shridhar who’s an app developer and is currently working with Ericcson is looking at this new development as a great advantage. He says “We as app developers will be able to reach more people than before. With offline content available on phone, user will save big data costs, because they do not need to be hooked to Internet 24×7. Though data packs are cheaper in India, many still do not use data network on their phones. For them, this service will be useful.”

Shridhar however does not think these services will be ‘extremely successful’, but he says these services will ‘gradually catch up’ and become popular. It will be a great success once every content owner allows to access content for the offline access.

Do you know YouTube offline is not Google’s first such effort in India? 

In middle of 2013, Google Music India, a service that allowed people to search for music by names of artists, movies, albums or song titles was shut down in India. This was just a ‘Lab products’, that is testing product. So, our hopes were on the Google Play Music. This service started rolling out services to European countries (the service was rolled out in 20 countries) last year in October, but India was excluded from the list.

This was because of “legal constraints” points out Firstpost which we understand as we take you through the ‘Indian landscape of online music started on a bumpy road’ section. We know Google’s own money transfer portal Google Wallet does not work in India!

Various Apple iPod models, all of which have been discontinued or updated; Image source: Wikipedia

Various Apple iPod models, all of which have been discontinued or updated; Image source: Wikipedia

Is the age of iPods over?

For a long time there was only Apple offering such services via iTunes.

But in last two years the sale of iPods has declined continuously. In January 2014 Apple CEO, Tim Cook Apple admitted that iPod sale is “declining”. According to Apple Q2 2014 earnings, iPod sale in Q2 2013 was at 5633 units contributing $962 millions. This increased slightly by Q1 2014 as it sold 6049 iPods and earned $973 millions from it. In Q2 2014 the revenues from this dropped significantly as it sold only 2761 units and earned $461 millions from iPods. (Source: Apple, Q2 2014 Unaudited Summary Data) Many technology experts described this declining sale figures as ‘the age of iPod is over’.

This essential gadget, mp3 player, that used to be the companion of students and youngsters few years ago is becoming redundant after cheap 4 inch and 5 inch handsets attack the Indian market, with a possibility to add a micro SDcard to store songs.

But things were not this promising few years ago. In India music streaming (which you can also call streaming audio) on mobile phone started on a bumpy road. Some of these issues still effect the online music and music streaming industry in India.  

Indian landscape of music streaming on mobile phones kickstarted on a bumpy road

When we talk about music streaming on mobile phones in India, this industry actually began with FM radios which offered free music streaming on phones that are not connected to the Internet. Do you not remember the Nokia INR 1,200 handsets accessing at least 5 FM channels to bring music on the go?

Later with a better broadband structure in place, online music tracks were offered as websites that were dedicated to such service. These however, also came as unofficially distributed tracks uploaded to streaming websites by fans.

Jayson Beaster-Jones in Bollywood Sounds: The Cosmopolitan Mediations of Hindi Film Song points out “As urban and metropolitan India gradually developed a broadband Interne structure in the mid-2000s, streaming sites became an important mode for promoting music for both people living in India and audiences outside of it.”

This music streaming industry was marred with multiple issues. We believe that the some of these problems both the industries, FM radio and online music industry face. Just to remind you once again, the former offers streaming music to mobile phones that are not hooked to Internet and the latter works via websites and apps.

We are listing these issues here –

The spectrum mess 

Indian government conducted open auctions for radio spectrum licenses (phase I radio spectrum license auctions) in the year 1999. Of the 108 licenses that were issued, only 22 became operational in only 12 cities. The Radio companies thought the strict content code for broadcast is the reason for losses, which made it difficult for them to pay money to the government. Court cases followed because of royalty issues. By the IInd phase in 2005, the annual escalating license fee of 15% of the Ist phase was scrapped and replaced with a one-time entry fee in addition to a 4% revenue-sharing agreement. (Source: Arun Mehta and Manasi Dash, A Rational Spectrum Policy for India)

Because of this issues radio channels failed to take off and many who could have benefitted from free music service remained out of the ambit.

And then, the bandwidth issue

High cost of spectrum that is auctioned, combined with the cost of laying optical fiber and maintaining mobile towers, has made Bandwidth costly in India. No doubt while the whole world is done with 3G and is implementing 4G spectrum India is yet to see pan-India implementation of 3G. Recently the Narendra Modi government is planning to reach the Panchayat headquarters and connect them under the National Optical Fiber Network Project.

Narottam Giri of Indopia, India’s first company offering online video content to consumers points out “Bandwidth is still costly in India so offline trend is a relief.”

“GBs and MBs are still foreign concepts to many Indian consumers to sign up for data”, says Vinodh Bhat of Saavn to Medianama in January this year.

A screenshot of the landing page of Indian Music Industry claiming that it successfully blocked illegal music websites.

A screenshot of the landing page of Indian Music Industry claiming that it successfully blocked illegal music websites.

Piracy issue

Then, there was the issue of piracy. We keep coming across the online music stores coming under the scanner of music industry because of copyright issues. In February 2012, the Calcutta High Court issued an injunction ordering 11 ISPs to block access to the infringing website songs.pk. BitTorrent sites including KickAssTorrents, The Pirate Bay, Torrentz have also faced such blocking orders from time to time.

This is a glaring issue as the tracks sometimes full movie lands on torrent websites (for free download) immediately after its release, making people rush to these websites rather than official music or video stores. 

How to make a model that is profitable?

Even after these issues music players like Gaana, Dhingana and Saavn and more download stores begin to emerge. But another major issue still remains.

How to get people billing for services when a very little part of the population has a credit card. Of the Indian population of 1252 billion, only 19 million Indian have credit cards, according to the Report of the Group on Enabling PKI in Payment System Applications by RBI dated April 22, 2014.

Siddhartha Roy, CEO, Hungama in an interview to NextBigWhat in 2012 agreed that “it is tough to build ad based online destination for listening music as ad supported structure is very less.”

Shutdown show!

Flipkart started Flyte music streaming service in 2012, but it failed to take off. The reasons were music piracy, lack of easy micro payments, expired deals and less number of users willing to pay for a-la-carte music, notes Nikhil Pahwa Founder of Medianama.

Dhingana with 15 million active users in 2013 had to shut down its operations in February 2014. This happened soon after the biggest music label in India, T-Series, decided not to renew its contract with the company.           

Do let me know what you think about offline music streaming services via mobile apps in India.

This report is published today in DailyBhaskar.com

Published in DainikBhaskar all Editions. Read http://epaper.bhaskar.com/ of 21 Sept 2014

Published in DainikBhaskar all Editions. Read http://epaper.bhaskar.com/ of 21 Sept 2014

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