MUMBAI: The music sector is one of the main contributors to the entertainment economy and can be used to grow certain areas like VAS and movie promotion. And with the many digital changes being witnessed, the sector is currently on the brink of transformation. While physical sales have noticed a decline and CRBT revenues have shrunk, current digital streams are offering new possibilities. This was highlighted in the 2014 KPMG report.

Last year saw majority of music consumption was 'on the go’. This was mainly because of the growing use of mobile devices, better data plans, and the popularity of mobile applications and streaming services. The growth of live events also contributed to the growth of the music industry, particularly for independent artists, which in turn has increased royalty revenues from public performances.

In 2013, India became the third largest market in the world for smartphones, according to the International Data Corporation (IDC). This can be attributed to the narrowing gap in prices between the feature phones and smartphones. Data from Comscore India Digital Future for last year showed that 24 per cent of users accessed music from their mobiles or tablets, as compared to the remaining 76 per cent who used their PCs. In addition to this, availability and awareness of music applications also helped the overall drive for digital music services.

While consumption of digital music, whether legal or illegal has witnessed growth, it has played a part in the decline of physical sales. Last year, physical sales fell by 13 per cent to reach a total of INR 2 billion. It also saw the closing of physical stores like several Reliance TimeOut stores and the MusicWorld chain. The decline in physical sales in the country mirrors a global trend. However, initiatives have been introduced to spike interest in physical records. For instance, Record Store Day, which is held annually in April, has managed to increase interest in vinyl records through the release of exclusive and promotional records.

There is no doubt that the next few years will be crucial to the development of the digital music sector in terms of downloads and online streaming, which more people are becoming open to. The ability to grow the subscription segment will play a major role in deciding the music industry’s success. Offering users the services they want and easy access to them, at flexible prices will be key in growing the digital music space. Additionally, sites that engage visitors and keep them coming back for more will stand out from the others.

Although digital models are still relatively new, over time, datamining will prove beneficial to understanding customers and developing a workable business model, which will further be able to improve the overall digital music sector.