Indian Entertainment Industry Welcomes iTunes Launch

India has an estimated 150 million Internet users and more than 900 million mobile users, making it the second-largest mobile market after China.

NEW DELHI – The launch of Apple's iTunes Store in India – along with 52 other countries  - has largely been welcomed here by the industry. iTunes offers Indian tracks from $0.12-0.27 (rupees 7 – 15), albums from $1.2 (rupees 70) and movies from $5.3-9 (rupees 290-490). Movies are also offered on rent at rupees 80 (for Bollywood and other Indian titles) or rupees 120 (for international films) valid for 30 days.

“They really got the pricing right to start with considering India is a very price sensitive market,” Sony Music India MD Shridhar Subramanium told THR. “Moreover, in addition to widening the market for international repertoire here, the diversity of Indian content on offer includes everything from Bollywood to regional music which makes iTunes an attractive proposition,” he added.

While Apple has not announced the names of record labels and studios it has tied up with, the store features content from labels including Sony Music, Universal Music, EMI Records, India's oldest record label Saregama, T-Series and veteran Bollywood banner Yash Raj Films' label YRF Music, among others.

iTunes is also offering its iTunes Match service enabling users to store music (purchased from sources other than iTunes) on Apple's iCloud service.

India has an estimated 150 million Internet users with over 900 million mobile users, the second largest mobile market in the world after China. “The real growth for iTunes should happen in India's expanding mobile-internet space where users are increasingly accessing online services via all kinds of mobile devices, from phones to tablets,” said Indian label Times Music CEO Mandar Thakur, adding, “Apple hardware such as the iPhone and iPad are gaining brand loyalty here and this will increase further with iTunes.”

iTunes is also expected to be a strong competitor to local services such as Flyte, and Saavn.

“In addition to countering online piracy, what iTunes could bring for both the film and music business is another much-needed digital revenue source,” Fox Star Studios India MD Vijay Singh told THR. According to a recent report by industry body FICCI (Federation of Indian Chambers of Commerce and Industry) and consultants KPMG India, the Indian music industry touched $167 million (rupees 9 billion) in 2011 (with digital sales contributing rupees 5.2 billion), a modest five percent growth over 2010. The report predicts that increasing digital platforms replacing physical formats will continue to fuel growth.

Considering the Indian music market is heavily dominated by local film soundtracks – which command over 60 percent market share leaving international fare with a less than 10 percent share - iTunes could change the picture within its sales pie. “The existing Apple customer base in India is largely urban and upscale who are more inclined towards international music,” said Thakur. “I reckon that within its sales volumes, iTunes could probably give over 30 percent market share to international music with the balance divided among various domestic genres.”