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Sony Music’s ‘Jive’ to the tune of growth
MUMBAI: Sony Music Entertainment, the country’s second largest music label, is out to chart its growth ahead. Being bullish on digital, the company plans to grow its market share from 20 per cent to around 23 per cent by year end, by building its music service Jive and expanding it into new markets with a technological push from Indent.
In a music market worth Rs 1,000 crore (Rs 10 billion), the 15-year-old music label along with others has been growing on the back of an operator ecosystem with smartphones enabling higher music consumption. Caller ring back tones (CRBT) too contributed to this growth by generating as much as 80 per cent of a music label’s revenue.
However, three years ago, there happened a shift in consumption and more people started engaging in digital music through smartphones and other mobile devices by streaming and downloading. It was then that Sony Music conceived the idea of building its own content and services, which led to the birth of its music streaming and downloading service Jive.
“We did not have any technical expertise when we launched Jive, so every buyer got the app embedded on their Xperia smartphone. We needed a strong technology partner which was independent and not in music, and that’s when our association with Indent was born,” Sony Music Entertainment president India and the Middle East Shridhar Subramaniam tells TelevisionPost.com.
The fruitful association with Sony Music using the technological platform to build its music offering led to the label acquiring a 26 per cent stake in the platform.
But Subramaniam says that the deal is in the larger interest of labels as it wants to encourage others to come on board and build their technological infrastructure through various models.
“We took a stake to show our interest and use the platform better. The platform is for every label and whatever model they want to build on. Thus, we did not acquire a majority stake so that more labels can come on board,” he adds.
However, Sony Music’s larger interest currently is to build its Jive service. So, by the end of this year, the service will be available across all Sony devices and it will also go in for operator integration. The label is also building a payment gateway that will give consumers multiple options to purchase content.
Besides, the service will see an international roll-out in markets like North Africa. However, the point of contention is users, as the service is initially available for free for six months. After that, users have to pay Rs 99 a month. But presently, only 10–20 per cent of users convert to the paid model.
“The plan is to see how we can build the service as it’s a combination of streaming and download,” he says.
On the monetisation front too, the label is building on the consumer paid model which includes CRBT, as well as on advertiser revenue through branded content.
Weaving into all these plans will be Indent that aims to give Sony Music the technological strength to understand platforms and build its service.
Besides, it aims to keep building its partnerships on the content front, as it has done with Dharma Productions. Recently, it also inked a deal with the newly launched label Zee Music to manage their digital assets.
Although a competitor, Sony Music chose to help Zee Music to consolidate its space in the music market further, in a bid to weaken the dominance of T-Series.
Subramaniam states, “When Zee Music started, they didn’t know much as they are a media house so we thought of helping them. There are no permanent friends or enemies, and it’s good to have new people in the business as marketing and innovation get better, and the producer gets more choice to work with labels.”
As per the deal with Zee Music, both the companies keep a share of the rights. Sony monetises operator platforms, while Zee retains the broadcaster and YouTube rights to the content. With the partnership helping them to scale the business, Sony is hoping for a long-term association with Zee.
Sony Music also claims that T-Series’ dominance does not bother them, as there are other aspects of the music business than just Bollywood where Sony Music is involved. These include international content, signing independent artists and releasing music albums, etc.
So, while the previous year was a bit difficult for the industry considering the Telecom Regulatory Authority of India’s (TRAI) regulation on mobile content, the industry has returned to the growth phase and as Subramaniam states, the growth this year will be mainly on the back of 3G, 4G and smartphone devices for which Sony Music is well prepared.