Dhingana might face a shutdown—could premium music streaming models work in India?

On-demand music streaming service Dhingana.com is facing a shutdown situation. The speculations of this news have been doing rounds on different media channels on the net, but a source has just confirmed that the rumours could be true.

The site is currently active and is taking new subscriptions as well, it could be assumed that the closure will take place after the official public announcement by the company.

The reason for the shutdown is not clear, however online music magazine Soundbox quotes T-Series President Neeraj Kalyan, saying that T-Series had withdrawn music from Dhingana as it was not seeing much traction on the platform compared with other services. And inadequacy of revenues to run the company could be behind this move.

Just a few days ago Dhingana had announced today its partnership with mobile platform and Internet service provider General Mobile (GMobi) to get its music app preinstalled on all Intex, Zen, Hitech, m-Tech and Maxx devices offered by GMobi.

Survival of paid streaming models in India

Other Indian music streaming services include Saavn and Gaana. Whereas the international music service Spotify is not yet available to users in India. And although it is doing pretty well globally, the same can’t be said about its Indian counterparts.

All the above mentioned companies operate on different revenue models, but in general offer a limited free services and full access to paid users (Except Gaana, which has a free model).

These streaming services offer music in over 70 languages, and for each song they upload for their users, they have to fulfil the legalities with the producers. The total music copyright costs could run over USD 4 Mn per year for a company. In addition to this, the companies invest roughly 1 Mn for their marketing and advertisements.

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Unless a company is well-funded, it is difficult to overcome the cash-deficit situation high expenditure and low revenue creates. Gaana is backed by Times Internet, and takes funding from the same. Even though having an optional paid subscription is one option to increase the income, a majority of the population might not be willing to take one.

Government’s anti-piracy act shut down a number of free music streaming and download sites, but at the same time the users moved to different available free options like Youtube and songs.pk. This could be one of the reasons for Dhingana’s speculated shut down.

Contrary to this, at the same time, when it comes to television channels, users do pay even upto INR 50 (USD 0.99) per channel, even though YouTube offers free streaming of almost all the show. However in the long term it could be observed that the users would prefer on demand streaming of entertainment content. Hence eventually such music streaming models could become profitable.

A serious consumer demand study is however necessary if these companies have long term growth plans, as an average Indian consumer is different from an average American consumer, hence they can’t follow the same model as their international counterparts

To contact the author, write to sugandh.dhawan@wirefootindia.com

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