To understand the online music industry in India, we first need to understand what online music is all about. Online music refers to music that has been digitized and can be downloaded. It is a web based business, where songs are sold on a per song or subscription basis.
The concept of downloading songs from the web space was first innovated and started in 1993 in the University of California by Rob Lord, Jeff Patterson and Jon Luini. It has, since then, spread all over the world, wherever there is a strong internet presence.
India has a very rich heritage of music. Indians are one of those lucky people who can enjoy the best of both worlds. Be it Hindustani and Carnatic classical, typical Bollywood music, rock and roll or pop, this country of millions has space for all and coupled with their propensity to get the best deal on anything, it really comes as no surprise that online music is all the rage now.
In India, the concept of online music started approximately 4 – 5 years back. Once music companies in the Indian market, like Saregama HMV, T Series and Sony BMG started digitizing their tracks, the online music market also started growing.
Saregama HMV with its repertoire of over 300,000 tracks is one of the major players, and their recent initiative to tie up with other music giants like T Series and Sony BMG has brought to the consumers a great musical experience.
Currently, the physical sale of cassettes, CDs and MP3s stand at 55% and the digital sales account to 45%. But by the end of 2008, the Indian market will see a reversal of roles with the digital sales at 55% and the physical sales at 45%.
Legally, each track from the afore mentioned companies costs Rs. 12 – Rs. 15, and is easily downloadable. The fun part is that single tracks can be downloaded as opposed to entire albums, which was the case with HamaraCD, Saregama HMVs initial tryst with online music selling.
But there’s a catch. If a single song costs Rs 10 – 15, and an entire CD costs only Rs 100 – Rs 150, the need to legally download a song naturally diminishes. And when there are sites like raaga.com, musicindiaonline.com and dishant.com from where you can download free songs, the need diminishes even further.
Hence, the negative fallout of online music is worth taking note of. India is one of the top countries in the world facing a threat, with the music industry losing between US$600 billion and US$650 billion a year due to piracy.
64% of all music which is downloaded is illegal and even though the Indian government is making serious efforts to counter this intellectual property theft, the lack of proper patent laws or more correctly, the enforcement of these laws allow the perpetrators of this crime to get away scott-free. Due to this rampant piracy, the government is deprived of tax revenues, jobs are lost and research and innovation never take place.
The maximum amount of illegal downloading is done by youngsters in the age group of 20 -25 years. As long as this group does not take note of the losses suffered by the artistes, music companies and the government due to this menace, no concrete step can be taken to counter the loss.
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