| 21 Feb 2024
Sudhanshu Sarronwala- "It's mobile, expressive and has a long tail...."

One can perhaps argue successfully that communications, photography and music are the most �digitized' industries in the world. Just think of email, digital cameras and camera-phones and 'MP3'.

Further, in terms of format change, digital music is quite simply the pioneer in terms of a changed format settling into a commercialized industry (not without its own legacy issues with respect to piracy).

As digital music settles into its groove and evolves, it has already created several rules. The purpose of this paper is to discuss three mega-trends that the digital music landscape has thrown up.

1 - The Long Tail' and the death of the 80/20

In his hypothesis regarding 'The Long Tail', Chris Anderson postulates that digital retail consumer behaviour is dramatically different from physical retail behaviour because:

1 - A digital retail store is able to stock way more product than a physical store due to no �limited retail/shelf space' issues that a physical store has and,

2 - Search functionalities and recommendation engines in digital stores allow for users to seek out their niche personal choices effectively.

The result of the above is that digital buying behaviour moves away from the hits' towards the niches'. This results in purchases being much deeper' in the available catalogue.

This depth of reach into the catalogue is effectively 'The Long Tail'.

Hence one finds that one sell less of more' rather than more of less' demonstrating clearly that the top 80% of digital sales do not come from the top 20% of items; rather, more than 80% of sales come from more than 80% of the catalogue.

Understandably the above works more typically for online music than it does for mobile music (though surprisingly the catalogue sales achieved for ringtones and ringback tones also goes into the thousands of tracks) but given the improvements in search technologies and recommendation engines for mobile music, the depths of the catalogues explored will be much greater in the future and will likely rival the online �tail'.

Hence, the catalogues of the music companies created and aggregated over yesteryear takes on a renewed sheen in this new retail reality.

2 - Mobile Music outsells Physical Music in the Asia-Pacific (and in India); Online music is relatively tiny

At the end of 2006, India became the second country in the Asia-Pacific (after South Korea) where consumers spent more on mobile music than on physical music.

Industry estimates stated the mobile music industry in India was worth Rs.1,026 Crores (IMRB, IAMAI) and the estimates for the physical music industry were Rs. 800 Crores. In the year 2007, mobile music doubled to more than Rs.2,000 Crores and the physical music market remained flat at best. Online music was just an infinitesimal fraction of these numbers.

This was a major milestone – the triumph of the digital format had indeed occurred! The only difference between the pundits predictions and the reality was that the triumphant format was mobile and not online music!

3 - The full track... download is not the mobile destination

It appears that the most earth shattering reality to hit the music industry might be the interesting phenomenon that full tracks' are not really what the consumer wants to download and own across Asia and in India.

Let's consider an interesting juxtaposition of facts:

1 - Ringback tones, ringtones and master tones dominate the mobile music landscape everywhere

2 - In the 3G markets and in many of the 2.75G / Edge' markets including India, full track downloads are available side-by-side with the derivatives mentioned above.

3 - In many of these markets (and in India), full track downloads are also available online at almost half or less of the mobile download price and would allow the song to be downloaded and ported to the music phone as well as burnt to a CD

4 - In markets where downloads for full tracks have existed for more than 2 years, streaming services and/or music on demand services (over IVR or GPRS) have quickly overtaken them in a short time span.

Given the above, and the fact that music phones with easily expandable memory are commonplace, led me to hypothesize that consumers may not be interested in owning the music the full song anyway.

Yes, they are interested in consuming the full track but not necessarily owning it. And they have countless sources to access and consume the music on demand – Radio, TV, Films (relevant especially for Bollywood and other Indian films), online services, mobile radio and streaming services.

Hence, armed with a GPRS / 3G connection and / or a broadband connection, the consumer is pretty much hooked into all the music in the �cloud'. Hence, he can access it on demand as and when and therefore does not need to own it.

What they are interested in owning however, is the snippet, the expression derivative – that allows them to use it in various ways from a ringtone to a ringback tone. Hence, fundamentally what I am hypothesizing is that the full track is not the end destination for mobile music.

The above mega-trends have been instrumental in defining an industry in its early years; an industry that is well worth more than US$5bn in the Asia-Pacific today. As the industry steams towards its estimated US$10bn mark in 2010 there will undoubtedly be more trends that will emerge.

In Asia however, the beast that is digital music will always be mobile, supremely expressive and will undoubtedly have a growing tail.


Sudhanshu Sarronwala is CEO, Soundbuzz Pte Ltd