MUMBAI: Music major Sony Music is set to extend its footprint into the tier II and III towns and the rural markets.

Beyond the hype generated by digital and mobile music sales and market penetration, in India, physical music sales, although declining, are still strong and form the main source of music entertainment along with radio in the non-urban markets. While many of the country’s 750,000 villages have also been ‘mobilzed’ by the cell phone with mobile radio and ring tones, physical music also has a strong presence.

While 2010 was the year of structural shift from physical formats to digital ones, the Indian music industry achieved revenues of Rs 9 billion in 2011, registering a growth of 5 percent over 2010. The Music sector is projected to grow at a CAGR of 17.6 per cent over 2011-15, reaching Rs 21.4 billion in 2015 from Rs 9.5 billion in 2010.

Deploying a licensee model, Sony Music Music’s Digital Audio Disc Corporation’s (DADC) (India) push will be initiated into towns with population of 5 lakhs nationwide in music and movie segments. Sony DADC has tied up with a couple of labels in music and with Sony Pictures and Walt Disney for the movies. It is also holding talks with National Geographic along with two more studios.

“We are in midst of discussions with potential partners for the initiative. We will have a consolidation model to open (the) new sectors. We will enter these markets with physical music fist then will take digital music later. Our foray will not be restricted to English language alone but also regional languages,” Sony DADC Home Entertainment business head Rajat Kakar.