Saregama India Ltd.: Striking a Digital Chord
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Case Code: BSTR237 Case Length: 21 Pages Period: 1986-2006 Pub Date: 2006 Teaching Note: Not Available |
Price: Rs.300 Organization: Saregama India Ltd. Industry: Media and Entertainment Countries: India Themes: - |
Abstract Case Intro 1 Case Intro 2 Excerpts
"India's digital music industry is poised on the threshold of an explosive growth. It has enormous potential due to multiple factors that are driving the market. Firstly, the sheer size of Indian music industry as one of the largest players in the global music industry is the key to this potential. [Secondly], steady technological advances including broadband availability promise a paradigm shift in the way music lovers can access and enjoy music, creating newer avenues such as online music transfers and non-physical music formats."
- Ajai Chowdhry, chairman and CEO, HCL Infosystems Ltd., in 2006.
"Indeed we are marching towards the digital music revolution."
- Atul Churamani, vice president (publishing and new media), Saregama India Ltd., in 2006.
Move Over, iTunes?
In June 2006, Saregama India Ltd. (SIL), a major player in the Indian music industry and a part of the RPG Group, an Indian conglomerate, announced that it would launch the beta version of an online music store in the latter part of 2006. This store would allow customers to download songs for a small fee (tentatively, Rs. 12 per track). However, the company had yet to come up with a suitable name for the service. This initiative was part of SIL's efforts to capitalize on the boom in digital downloads of Indian music. However, this was not the company's first foray on the Internet. Earlier in 2000, SIL had launched hamaracd.com - a website which allowed customers to purchase customized compact discs (CD). The website had a repository of songs from Hindi as well as regional3 films which the customer could choose from to make personalized CDs.
This initiative achieved limited success. Later, SIL tied up with several music download websites such as iTunes, crimsonbay.com, etc. so as to reach a wider international audience. SIL's latest digital initiative was also a part of a strategy that the company had embarked on so as to reduce its exposure to the physical music business. The strategy also involved SIL entering the film, television software, and home video businesses in a big way. As of 2006, the Indian music industry, like the music industries in other countries, was going through a bad patch, because of digital piracy (MP3). SIL's digitization efforts were meant to wean the typical 'MP3 consumer' from illegal websites to its huge repository of digital tracks. Digitization was expected to reduce the impact of piracy and improve SIL's earnings, both from end-consumers and radio companies......
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