Study on online music platforms in India

Abstract

Online music industry, though not yet a mature market is one of the fastest growing industry in India. The major players include Saavn, Gaana and Hungama. This report aims to do a detailed study on the business models of these companies and predict how the online music industry would evolve as the market matures. We compare the operating model of these companies with I tunes as a bench mark to gain key insights with regards to the differences in the model of each company. As the dynamics of platforms play a crucial role in determining how the equilibrium scenario would look like, we have analysed the current scenario and characteristics of the industry with the platform dynamics playing the role of influencing factors. The different strategy options available to the players in the online music industry in India are • Direct competition with others in a winner takes all scenario • Concentrating on a niche offering and differentiate from other players And in case the firms decide to compete head on, there are several strategies they could employ to gain the bulk of the market share, such as • Create a competitive market among artists in the same platform (user base increases, cross side network effects kick in) • Form exclusive partnerships with artists • Hybrid strategy Also, there exists three models of revenue generation for all the players in the online music industry • From Subscriptions • From pay per downloads • From advertisements In the report we study what kind of revenue model would be sustainable as the market moves towards an equilibrium. We also provide recommendations to the online music platforms on what strategy is more likely to be more sustainable.