Why Indians Might Not Go Rdio Gaga

The Wall Street Journal

The Wall Street  By SHEFALI ANAND

Updated Jan. 16, 2015

Bollywood actress Priyanka Chopra and US actor John Travolta dance on stage at the Raymond James Stadium on the fourth and final day of the 15th International Indian Film Academy Awards in Tampa, Florida, April 26
Jewel Samad/Agence France-Presse/Getty Images

The music-streaming business in India is heating up, with the entrance of a global firm this week, but it could be years before the industry becomes lucrative in the South Asian nation.

Rdio, a San Francisco-based provider of music streaming services, is now available to users in India.  It will provide listeners access to more than 32 million songs, both Indian and international, via free curated radio stations as well as a paid on-demand service.

Similar services already exist in India, notably Gaana.com, a unit of The Times of India Group, and Saavn.com. Users can access many of their songs for free online or via mobile apps, though they are required to pay if they want to download music or to listen without ads.

These services have become popular in recent years, thanks partly to the availability of cheap smartphones and improving connectivity in India. But they aren’t exactly cash cows.

“Music consumption has gone up, monetization of music has not,” said Mandar Thakur, chief operating officer of music-label Times Music, another unit of The Times of India Group.

In developing countries like India, where Bollywood music can easily be downloaded for free, it’s tough to convince people to pay for music. Also, Internet connectivity on mobilecan be patchy even in major metros like Mumbai and Delhi, which hurts the quality of the music streamed. So a bulk of music lovers still prefer to download songs on their cellphones or computers, rather than relying solely on streaming.

Some experts think that as technology and people’s mindsets change, music streaming will gain demand in India.

“The shift is not overnight, but it’s most definitely happening,” said Mr. Thakur. He said other global firms are looking to enter the streaming business in India, and this in turn will help expand this space. “The more players there are, the more they will actually seed the market,” he said.

Rdio, which is one of the largest global music streaming services along with Spotify and Pandora, is optimistic about its growth potential in India. The company had last year acquired Dhingana, an Indian streaming site. It expects to distinguish itself from existing Indian music sites, thanks to its large selection of international music, which ranges from jazz to death metal to Australian hip hop.

“We can play to the crowd that likes Bollywood and international music,” said Scott Bagby, international president for Rdio.

The service offers curated radio stations in various genres, which can be accessed for free on its website or via apps on smartphones and other devices. But if users want more flexibility, such as access to specific songs or artists, they have to pay $1.99 or 119 rupees a month to get a full on-demand subscription.

“When people love their music, they’re fine” about paying for it, said Mr. Bagby.

Globally, music streaming is a nascent industry, he said, with just 30 million subscribers across all such services, so there is a lot of scope for growth. India is the 61st country in which Rdio is available, and the company expects to be in 100 countries by the end of this year, said Mr. Bagby.