Ringtones keep sales ringing for music companies

For once, music label firms do not mind telecom firms surpassing them in what they do best —  selling music.

With mobile users increasingly downloading caller tunes and ring tones, the music companies are looking to ride the telecom boom as the country adds a record number of phone subscribers every year.

Interestingly, Bharti Airtel, India’s largest telecom firm, has emerged as the biggest ‘music firm’ with its revenues from the sale of music-related services such as caller ring back tone (CRBT), ringtones etc crossing the sales of the top two music firms put together.

The telco-music firms alliance benefits both as music labels, which are plagued by piracy, get access to a huge telecom subscriber base while telecom firms stand to earn more by selling services rather than just voice calls.

In April alone, 15 million new phone subscribers were added in the country.
According to the Indian Music Industry (IMI), the association of music firms, T-Series reaps in revenues of Rs 150 crore annually from selling music to telecom firms followed by RPG-owned Saregama at Rs 90 crore while Sony Music earns roughly Rs 50 crore.
“We earn about 40% of our revenues currently from our association with telecom firms. Once third generation (3G) services are launched by telecom firms, this would surely cross 50%,” Saregama chief executive officer Apurv Nagpal told DNA Money.
Saregama has a library of over 25,000 hours of Indian music and owns the largest music archive in the country. It has recently diversified into cinema, radio content and events.

 “We are certainly looking at volume growth in subscriber numbers,” Reliance ADAG owned Big Music & Home Entertainment chief executive officer Kulmeet Makkar said.

The company earns 30% of its revenues selling music digitally in association with telcos and expects half of its revenue to come from the telecom route in the next two years.
“We have seen a revenue growth of about 20% by selling music digitally,” Makkar said.

Though digital music, currently a fourth of the Rs 800 crore music industry, is growing faster due to the preference of people to download music from internet as against physical formats such as cassettes and CDs, industry players feel, on the flip side, technology has helped piracy thrive, as people download music into their mobile phones freely from the internet.

“Music piracy is growing equally as digital distribution of music,” Rajat Barjatya of Rajshri Media said.

Savio D’Souza, general secretary, IMI said, “The music industry has lost about Rs 600 crore in last four years due to ‘sideloading’ or free download of music from the internet.” The IMI has formed the mobile music exchange (MMX) in which shops selling downloaded music pay a yearly fee ranging Rs 18,000-60,000 to legalise the process.