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Apple Music at WWDC: Why it is the right time to launch the new streaming service in India


One of the biggest announcements to come from WWDC 2015 is its new music streaming service dubbed Apple Music. The music service, which is on its way to 100 countries has suddenly become an epitome of sorts in the tech world. While we would have ideally ruled out the possibility of it coming to India just like Apple Pay, but its availability for Android makes us think otherwise. Well, there’s more than one reason why we would believe Apple Music should make its way to India.
Apple Pay works with only Apple devices, justifying why it isn’t available in India wherein Apple own a mere 5 percent market. The dominance of Android and the evolving digital music industry with players like Gaana, saavn and others, there is no reason why India shouldn’t make it to the list of 100 countries.

“Apple is finalising plans to strengthen its presence in India by setting up 500 stores in the country and focusing on smaller towns and cities. Even though India currently contributes around 1 percent in terms of overall global sales for Apple, the favourable demographics and rising spending power has made the country one of the key markets for the company,” Sandeep Ladda (Partner and India Technology Sector Leader‎), PwC told Firstpost.

In the past couple of years, there has been an evident shift towards digital content in terms of shopping, travel and so on. The music industry has been no different. The Indian music industry has also been undergoing an evolution with several digital services platforms and our digital consumption habits have been changing too.

The Digital Media: Rise of On-demand Content report by Deloitte states that online music users are expected to grow up to 273 million and digital music industry revenues may cross Rs 31 billion by FY20.

Firstly, Apple Music seems like a part of a bigger strategy for the future. “There were an estimated 27 million online music users in India in March 2015. The number of online music listeners is expected to grow to 273 million by March 2020. This number is expected to be mostly driven by the youth and also increased demand for regional content. The paid subscriber penetration among online music users is also expected to reach 10 – 15%,” adds the report.

Moreover, the number of Internet-enabled smartphones have been growing exponentially. The Indian media and entertainment industry 2015 report by KPMG states that the number by the end of 2014, India had 116 million internet enabled smartphones and the number is expected to reach 435 million by 2019. This growth would bring in newer opportunities for digital content, aggregators, app developers and online streaming companies.

It is bound to get better with improved network speeds.

Last year, India also maintained its third spot among mobile app downloads on Google Play. While game apps was the most popular category, it was closely followed by instant messaging and music streaming. Among apps downloaded in the entertainment category, streaming apps like Saavn, Gaana and Hungama were the most popular apps, the KPMG report revealed.

Music streaming has been gaining popularity due to large scale promotions in mass media, these days. In the year 2014, we saw the most multi-million dollar investments in this space. “Music streaming is becoming a serious business with the market already heating up due to investments in venture-backed music streaming sites,” further adds the report.

We’ve are also seeing newer players entering the Indian digital music market such as Rdio, Australia based Guvera and Amazon Prime. Besides, the online music industry has also seen wide participation from service providers namely, Airtel’s Wynk, Vodafone Music in association with Hungama Digital Media Entertainment and Idea’s MusicHub. Telecom operators can earn not only from data chargers but also from the nominal subscription charges.

Needless to say, Bollywood music dominates the digital music industry in India, according to the report. The digital music service providers and labels have started increasingly going local to include genres such as Bhojpuri, Kannada, Malayalam and so on. For instance, Gaana.com offers over 3 million songs across 21 languages.

If Apple comes to India, bringing local content onboard will be one of its biggest challenges. However, teaming up with labels shouldn’t be a problem for the Cupertino company because it would be a win-win situation for both. It would help music companies reach out to Indian citizens travelling abroad or those settled overseas. The KPMG survey points out that the pie of revenue from outside India is slowly growing for Indian digital music companies. Ok Listen and Saavn claim that a considerable part of their revenue came from cities outside India. Saavn reports streaming 40 percent of its total music content in 2014 via international markets. So, overseas markets are becoming important for music labels as well as music streaming companies.

This could also mean more paid subscribers. Though music business is clearly moving towards streaming services, streaming players are struggling to monetise their offerings. In India, converting non-paid users to paid is still a challenge.

“India has, essentially, been and still is a typical market wherein majority of users prefer the services without incurring any cost. It is a tough market too due to rampant piracy. In India, only 1-2 percent of music is consumed by way of legal purchase whereas 99 percent of music consumption is still illegal i.e. pirated,” the survey says.

However, this can be done via innovative pricing strategies. For instance, Gaana has teamed up with Paytm to help users earn talk time of up to Rs 100, by inviting friends to Gaana. Apple has ticked all the boxes right when it comes to features including offline mode and cloud storage. ‘Offline mode’ is the current fad among music streaming services and users. It allows users to cache songs and videos without Internet connection, anytime, anywhere. However, it should be noted that the services allow only caching of music and it isn’t actually downloaded onto the phones or other devices.

However, issues like piracy and licensing bottlenecks continue to be prime concerns in the digital music industry in India. But there still seems to be a ray of hope with eased policies, the way we consume data, cheaper paid models, plethora of options and so on. The survey also claims that more Indians have now begun paying for music consumption and labels like T-series and Rajshri have eased up their licensing policies. If nothing else, we can take that as a sign that India is ready for Apple Music.

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