Saregama India Ltd: Striking a Digital Chord

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Case Details:

Case Code : BSTR237
Case Length : 20 Pages
Period : 1986-2006
Organization : Saregama India Ltd.
Pub Date : 2006
Teaching Note :Not Available
Countries : India
Industry : Media, Entertainment, and Gaming

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This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.

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"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." 1

- Ajai Chowdhry, chairman and CEO, HCL Infosystems Ltd., in 2006.

"Indeed we are marching towards the digital music revolution." 2

- 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 - 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.

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This initiative achieved limited success. Later, SIL tied up with several music download websites such as iTunes,, 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).4 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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1] "HCL forms a strategic partnership with Apple to provide sales & service support for iPods in India,", May 29, 2006.

2] "Saregama to open online music store,", June 22, 2006.

3]Regional films included films in the languages of Telugu, Tamil, Malayalam, Marathi, Bengali, Konkani, Gujarati, Assamese, Oriya, Kannada, and Punjabi.

4] MP3 or Motion Pictures Experts Group (MPEG)-I Audio Layer 3, invented by European engineers, is a popular digital audio encoding and compression format. It enables a reduction in the amount of data required to represent audio without compromising on acoustic quality. It became an ISO/International Electrotechnical Commission standard in 1991.


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