Business IdeasT-Series: Digi music
Music ripped off CDs or downloaded illegally, that can be found on digital music players, laptops and phones, robs the Indian music industry of over Rs 1,000 crore annually, according to market estimates. T-Series, the Indian music company which has rights to more than 200,000 songs, 30,000 music videos and movies, wants to change that. It has moved in with legitimate digital music on pen-drives and MicroSD cards, ideal for the preferred media devices, in the hope it will down one more deterrent to consuming media legally. The soundtrack of Blue is the first from its stables to be thus released, followed by All the Best and London Dreams.
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Apart from the 50 to 100 songs and 10 videos, the 2GB devices come loaded with wallpapers and themes. The Blue devices, for example, also contain some past works of its music composer, A R Rahman. The media comes in popular formats such as MP3, MP4, JPG, GIF, 3GP and DivX to ensure they run on both high- and low-end devices. Quality, the company says, has also been brought at par with that of CDs, despite the compressed file formats which are believed to lack in quality of sound by audiophiles.
While taking the battle to the pirate’s doorstep has always proved tricky, stakeholders in the Indian music industry are trying their own tactics to wean the customer away from pirated content. T-Series, on its part, bypasses online payments for the Internet-wary music lover to sell digital music. Siddhartha Roy, COO of Hungama, T-Series’ technology partners in the move, says: “This attempt will hit the pirates through both format and content.” The devices are being promoted by T-Series as the ‘size zero’ format for music in TV and radio campaigns on a budget of Rs 1 crore.
However, what might sabotage its attempt to beat piracy is the price tag its storage units carry. While the MicroSD cards cost Rs 475, the pen drives come for Rs 525. “High cost of the device has led to the price (Rs 275 plus 4 per cent duty charges on the devices). Once these come down, we hope to retail the devices for a maximum of Rs 300 and not more,” says Bhushan Kumar, owner of T-Series, noting that for now the company is operating only on a 7-8 per cent margin on these modes, while the dealers get 20 per cent to retail the products.
Distribution, for now, will focus on mobile retail chains such as Spice’s Hotspots and unorganised mobile stores for the MicroSD cards, the storage mode that the company is betting upon for now. “Music retail stores will have our pen-drives but then they will still have steep competition from CDs because of the price gap,” feels Kumar. One lakh such cards have been released, as against 20,000 pen drives.
To counter the price barrier, the company is banking on the fact that the prospect of owning popular storage devices (by Transcend, the digital storage company) with the value-addition of Bollywood media would be encouragement enough. The devices are rewritable.
Up next are themes, applications and games around movies that could be clubbed and sold through the same medium, according to Hungama. But the next big change would be movies. Kumar says Wanted, one of this year’s bigger hits, will be the first to be made available in a couple of weeks’ time. It is keeping its fingers crossed to see how the audience takes to the idea.