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Heady sound of music download

While you were fuming and fretting over the quality of your telecom networks, Indian consumers have made mobile music downloads a Rs400-crore industry.

india Updated: May 04, 2006 02:29 IST

While you were fuming and fretting over the quality of your telecom networks, Indian consumers have made mobile music downloads a Rs400-crore industry. Royalties worth Rs50-60 crore were paid to the music industry in the past 18 months for music downloads. And while you were waiting for a cheaper iPod to hit the market, the Indian MP3 player market has grown by about 80 per cent this year. Welcome to the generation that thrives on digital music.

Indians are not just taking to the MP3 mania but are leapfrogging to adopt flash MP3 players, rendering the hard disc-based MP3 players redundant. The official estimates of the MP3 player market last year was about 60,000 units. However, the total organised, as well as the gray market, is expected to touch 300,000 units this year. Flash-based players contribute nearly 60 per cent of this market in India.

According to an IDC, “Presently, larger hard drive-based players, like the iPod, lead the market but significant drop in the prices of Flash memory will make lighter, high memory flash portables more affordable.”

Says Samsung Deputy Managing Director R Zutshi: “Next year, the market will touch about 4,80,000 units and nearly 50 per cent of this sale would be from the organised channel. While the organised market has so far contributed just 20 per cent of the total market, the good news is that with the effective duty drop of 11 per cent in this year’s budget, the market is shifting from unorganised to organised.”

The penache for digital music has been fuelled by access devices being brought in by the likes of Apple, Samsung, i River and Creative. Samsung alone has rolled out a line of five flashbased MP3 and the company that launched the products in the H2 of 2005, expects a 400 per cent jump in the volumes this year.

The other leg of the stool, however, is the availability of digital music through legal mobile and online channels. As IDC puts it, “Falling prices, along with the increasing availability of music from legitimate online music providers will drive demand for compressed audio players.”

Also, mobile penetration in India has a big role to play. Value added services, of which music downloads form a large part, are estimated to contribute 15-20 per cent of the telecom services provider revenues.

In India, the availability of legal online music has been facilitated by online music companies like Soundbuzz. In March this year, Soundbuzz became the first and the only Asian music store available in India through Window Media Player 10. (See box)

First Published: May 04, 2006 02:29 IST