Bringing the Gillette model back to help Indian music business

If you do not know about an Indian music magazine called ‘SoundBox’, I don’t blame you. It costs Rs. 150 and is available very, very selectively as far as I know. I – thankfully – get it, due to this blog of mine! And I love it!

The latest issue has a cover story on the state of Indian music industry. This is a pet topic for me and I have a few points to make. But, before I do, here’s the PDF of the 8 pages that constitute this cover story (8 page excerpt reproduced with permission from SoundBox – click on the cover page to download the PDF file, 300 KB).

Now, for my perspective.

Yes, revenue-wise, the industry may indeed be bleeding, but they have only them to blame for this mess. Hanging on to the ‘mp3′ and ‘piracy’ issues will not help them or anyone, any longer. It sounded like a great excuse some time back – not anymore.

I read news reports about some regional music industry coming together to fight ‘piracy’ – the latest was the Kannada music industry. Some of the tactics they have used so far include creating mp3 CDs for sale and adding many more songs in the same CD to add value, pricing CDs really cheap (sometimes even free) and so on.

These are definitely good tactics, but the first realization should be about why pirates exist. Pirates may exist because of two reasons – one, where the price of the product is higher than what the market is ready to pay and two, to fill gaps in access/availability.

CDs used to be priced higher at least some time back, so tapes/cassettes ruled the roost at a cheaper price point. After digital music entered the fray, cassettes are almost non-existent now, while even cheaper CDs are finding it difficult to sell. So, with regard to the price factor, the first point is that cheaper prices have not stopped piracy, because there is always a place where even that cheaper bit of music is available for free. Between free and cheap, I’m sure you know what people are likely to choose. So, how do you compete with free?

For that, we need to take up the 2nd point why pirates exist – access/availability gaps.

It has been many years since iTunes revolutionized the music industry all over the globe and we Indians have still not learnt anything out of an incredibly visible successful business model. iTunes works because it makes music available before physical sources do and makes the process of buying a breeze.

I have personal issues with Apple hogging the whole process and it not being open enough, but those don’t take anything away from the sheer brilliance in the way it is executed. Music labels fell in line for iTunes because it allows them to sell even singles so easily and not force entire albums down listeners’ throats. It also helped that the internet penetration in the US and Europe is phenomenally better compared to India, where the state is still largely pathetic. Given that, it is not possible to replicate the same thing in India until internet access improves and becomes far more prevalent. That is still some years away given the glaring economic disparities – no, 3G and phone-led internet access is not part of the solution either. So, what is the solution?

This may sound corny, but the solution is simply to bring the Gillette model back, in my opinion. Gillette’s (or any safety razor’s) business model is in owning both the razor and blade within one company. The razor is relatively expensive while blades are comparatively cheaper (let us not get into the prices of Gillette’s expensive blades, please!) – the point is to create loyal users by offering a predictable base to use the blade and get people to continue paying for the blades. This worked perfectly fine with cassettes-cassette player, CD-CD player…but when digital music happened, this predictable and consistent model of one vehicle-one player went for a toss.

Now that we have outgrown the cassette and CD waves, digital music, removed of internet, is incredibly more portable than ever. A thumb sized flash drive today can contain even 8GB worth of music and can have utility value more than that music itself, as a storage device. Much like a standard cassette, if you wish to compare!

So, the first point is to get the razor-part right. What we need is to rebuild the eco-system, with relatively cheap flash-based music players with varying levels of quality and complexity. This is no doubt reinventing the wheel – where once brands sold the cassette player, they moved on to the CD player. Now, there are cheap Chinese players that play both CDs and flash drives, but these are still multi-utility players and hence expensive. Why not a standalone flash-only player? I have seen cheap ones from Croma, which also have a screen for selecting songs or viewing videos – it was priced at about Rs. 6,500 the last time I saw it. Good enough, but we perhaps need cheaper players at the Rs. 500-1,000 price point which just require even a rural user to insert a flash player and play the music.

Do not start discussing sound quality here – if quality of sound is a concern, I’m sure the person is in a different price segment and won’t be concerned about downloading pirated material either.

That addresses, hopefully, the music player part. Next, the music part.

Access of music is still a huge concern. There is a reason why pirates tag their material with ‘First On Net’! The last time SaReGaMa tried making available a film title online immediately after its launch was ‘Jhootha Hi Sahi’. The site couldn’t take the load and was stuck as soon as the songs went live. They perhaps underestimated the number of people how may be trying to buy online.

The point is to make music purchase not as a classy activity as it once was (those days are over), but into a commoditized one. If a film’s music is scheduled for 3 days from now, make it available in those flash drives, either as singles or as albums on that day, via many modes of distribution including super markets and kirana stores. Imagine – these are the guys who get our bread and milk every single day, on time and depend on an impressive distribution system for the same. Milk and bread still need to be distributed physically, across cities/states, but digital music need not be. It can be transferred via the internet and the store-level processes can take care of making musical packages using flash drives. So, only the content travels, that too digitally, to the end-retailers, not the entire damn music vehicle. The idea is to make music available ubiquitously and make it an impulse purchase at even billing counters…the way they have chocolates there, which we pay Rs. 10 without even thinking about it. Why such a suggestion? Because it is easier to enable consistent internet access to a few million kirana/departmental/assorted stores than a billion+ citizens.

I hear you worrying about music being a piece of art and selling it via kirana stores like this diluting its art value – I agree. But then, art-level music will have its own followers who may be willing to pay a price for it – that need not apply for something as massy as film music or Indipop.

So, even though it may sound like a tall order at least now, I believe there are some signs of this happening at various levels. T-series is trying flash drives as a music vehicle, along with CDs, but given the lack of mass-level flash-based music only players, it is still a non-starter. Computers and laptops are one option, but the magical device will need to be cheap enough and portable enough to play just flash drives and little else (maybe radio too?). What is stopping a Videocon or T-series (or even a Sony) from inventing such vanilla devices that could be sold in large numbers at throwaway prices?

This could also be a clue to someone like a Nokia (or the many Indian cellphone hardware brands) that could add a flash-drive USB player right in the phone – battery life be damned! But, that’s one of the issues I have with buying music via phones – it is a great distribution mechanism, no doubt…it is also an existing eco-system unlike the one I’m proposing which needs to be built from scratch…but, traditionally, Indians are not the kind who are personal music listeners. We like our music away from those ear phones/head phones that people outside the country use as a matter of right! So…can we pander to that and not try to convert our folks into private music listeners? Most importantly, when music is commoditized at the distribution level, these music carrying vehicles (flash drives) can be used in expensive players (stand-alone music players with USB drives), car players, computers, laptops and also these vanilla devices that millions of Indians can afford.

As far making legitimate music available far more easily than it is now, easier said than done, I understand, but the debate needs to go beyond the format (cassette to CD to digital) and into the point-of-sale/distribution. The format challenge has somewhat been scaled, but the point-of-sale/distribution demands unique solutions for India, far removed from a model that depends solely on ubiquitous internet access.

Do notice that I’m not saying anything about the quality of music when it comes to sales/revenues Assorted qualities of music has been in existence even before digital piracy started and will continue – the market will automatically find a way to push good/acceptable quality over poor quality ones!