MUMBAI: After a leading player like iTunes entered the market in 2012, the Indian digital market is slowly getting to its tipping point. With the focus steadily shifting from the mobile VAS industry to digital and consumer engagement through smartphones growing, industry insiders state that 2013 may witness the entry of other leading players like Spotify and Amazon in India.

While iTunes managed to create a substantial buzz and helped in legitimizing the market further, other leading aggregators do not seem to be affected by their presence as it is purely iOS based while other services cater to the large user base of the android OS.

Speaking with Radioandmusic.com, Hungama Digital Media Entertainment Pvt Ltd COO Consumer Business & Allied Services Siddhartha Roy said, “The launch of iTunes in India is good news for the digital entertainment industry. There is plenty of opportunity for all players in the market, as we believe that India’s mobile and digital growth story has just begun. The digital music industry stood at INR 5.2 billion in 2011 according to the FICCI KPMG report. It is expected to reach INR 14.3 billion by 2016. Adding to this digital music consumption growth will largely be the adoption of mobile and wireless connections.”

With very few legal players in the space, the industry is growing at a rate of 50 per cent year-over-year and is said to have around half a billion users by 2015.

Dhingana COO Swapnil Shinde highlighted, “The industry is growing at a good rate and we too witnessed a 300 per cent growth on our android services and around 250 per cent on the iOS services. Digital music is stated to be the future in India if music piracy can be controlled.”

As the music content offering is being expanded by most aggregators, iTunes did manage to create a slight stir with its strategies. It started off by offering songs for as cheap as Rs 7 and boasting of a catalogue of over 20 million songs available for purchase and download including the latest tracks. In India, the Apple iTunes Store faces competition from the likes of Nokia Music Store and the Flyte music store by domestic online retailer Flipkart.

The Indian digital music industry witnessed a huge shift in consumption trends in 2012. As physical sales diminished and digital grew to around 65 per cent with 200mn consumers, the space expanded for existing players to grow and new companies like iTunes to stabilize themselves. With the industry stated to grow at a rapid pace in 2013, it is expected to reach around INR 14.3 billion by 2016.

Flipkart digital VP Sameer Nigam said, “We have believed in following an aggressive price point from the first day and our song catalogue is priced at Rs 5 for most regional tracks, Rs 9 for international and regional tracks and Rs 12 for our limited catalogue offering which comprises of some tracks from Sony. We now aim to go deeper into the music offering by expanding our international catalogue by tie-ups with the likes of Orchard and customize regional content to create a one-stop shop for consumers in the country.”

While international music consumption seems to be rising, Shinde claims that as per the recent consumption trends witnessed by their service, 40 per cent of the consumption was of bollywood tracks, while 60 per cent of it was regional content in various languages like Marathi, Tamil, Kannada and more.

Keeping the Indian audiences in mind and aiming to stay apart from the herd in terms of content offering, Hungama priced its music and movie content at an affordable rate giving its consumers value for money. Moreover, the recently revamped website also ensures easy discovery of the content available.

Roy elaborated, “In terms of price, Hungama.com allows the consumer to download a single track DRM free at Rs 10 and download 99 content pieces for just Rs 99. Our Hungama movies streaming services allows consumers to stream unlimited HD movies for Rs 249 per month and unlimited SD movies for Rs 149 per month. The price points above still give our consumers the greatest value for money on digital content. This is thought out to suit every user’s consumption pattern and pocket size.”

Inspite of the overall industry growing, the constant battle between streaming and downloading services continues amongst aggregators. While services like Dhingana claim that streaming services are growing better as users in India are not used to paying for music content, download services like Flipkart’s Flyte state that streaming services are not making money and there is more market for downloadable content today.

Another major trend witnessed in the past year was that consumer engagement was seen growing steadily on mobile than WAP sites. However, with the country being bound by certain regulations in terms of payments, verification and discovery, the market growth is pretty slow and thus poses a major challenge ahead.

“The digital music industry is looking ahead but our country is bound by regulations where payment is not an easy option. On iTunes, a user can save his credit card information and proceed with the payment procedure in an instant. We need to solve these issues and let the largely hungry market grow,” stated Nigam.

While piracy too remains a key challenge, seamless connectivity and bandwidth constraints have given a tough time to most aggregators. But with the government committing to building this connectivity with the last mile project, most services are optimistic that internet connectivity, especially broadband will be used by a large set of people by 2015 and there will be faster internet connections leading to a rise in the digital music market consumption through various devices.

“The digital music ecosystem in India is evolving rapidly. Continued growth in internet penetration and the increase of the number of smartphones is expected to drive consumption. This will further drive adoption by advertisers and developments in the payment ecosystem to facilitate better content monetization, and hence revenue growth,” affirmed Roy.