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Music industry's lone hope: Cell phone

December 27, 2006 03:33 IST

After waging a losing battle against piracy, a battered Indian music industry is pinning its hopes on the mobile telecom segment to salvage its sagging bottomlines.

The industry's total revenues have shrunk to Rs 1,000 crore from Rs 1,400 crore during the last four years, and the mobile industry, with over 136 million subscribers and a 4 million new users adding up per month, is expected to turn the tides for the industry.

"The Indian music industry is growing in leaps and bounds, but the artistes do not get the benefits. The revenues actually fall into wrong hands, thanks to rampant piracy," Indian Music Industry chairman Subroto Chatopadhyay said.

IMI, a non-commercial and non-profit-making organisation, affiliated to the International Federation of Phonographic Industry, is the umbrella body of music companies in the country.

The music industry is looking at various modes for increasing its revenues, and the mobile phone users are at the top of its radar. In an attempt to prevent piracy, the IMI had recently tied up with handset-maker Nokia to rollout music phones that cannot forward music to other handsets.

Globally, mobile music, which accounts for 15 per cent of the market, had posted gross revenues of $4.4 billion in 2005 and this is expected to rise to $6 billion this year. According to industry estimates, mobile music contributes around 5 per cent of total revenues in India and is expected to grow to 23 per cent by 2010.

Explaining the importance of the mobile segment, SaReGaMa India Vice-President Atul Churamani said that a large number of users are buying mobile phones that have FM radio and MP3 players. Ringtones also form a large chunk of mobile music market with an average of 70,000-80,000 downloads per day.

The advent of various music integrated handsets (like M4A, AAC, real audio, MP4 and video formats like MPEG3 and MPEG4) and the flexibility of storing music on detachable cards with 256 MB capacity (upto 50 songs) and 512 MB (upto 2,000 songs) will help the music industry.

According to Vineet Taneja, director (Multimedia), Nokia India: "Music on the move has become an important part of the mobile market with sales of MP3 audio/video handsets posting a rising trend. Moreover, with the introduction of legitimate music and buying channels, the music industry may expect some good times ahead."

The market of MP3-enabled handsets has doubled over the past one year and at present is expected to be around 25 per cent of the total mobile phone sales in the country. Ghazal singer Jagjit Singh was of the opinion that music on the move would turn the fortunes of the industry.

"Piracy is growing at an alarming rate of over 56 per cent in the country. This is also affecting the growth prospects of the sector, which rather than posting a minimum 30 per cent annual growth in revenues, is sliding year after year," he said.

Rajesh Kurup in Mumbai
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