Co-founder & CEO | 01 Oct 2002
Globally online music still has to resolve certain issues like pricing and compelling content. But being far more aggressive than the rest of Asia on this front, the Indian music industry should reveal commercial reality soon.
Music lovers world over have been one of the biggest beneficiaries of the coming off age of digital media. And one name that has really made the difference in the digital music market is Soundbuzz. It is a Singapore based digital music service provider with a focus on the Asia-Pacific markets.
It was founded in 1999 by a group of professionals from music, Internet and financial industries. Soundbuzz is led by its co-founder and CEO Sudhanshu Sarronwala. A well-known name in the Asia-Pacific music and broadcast media circuit. In July this year, he was listed as one of the 'brightest lights in the media and marketing worlds who is making the greatest impact on the global stage' by the renowned international publication Ad Age Global.
Prior to Soundbuzz, Sarronwala served as Managing Director of MTV Asia and Senior Vice President of MTV Networks Asia. He ran MTV Asia's marketing and communications division from MTV's re-launch in 1995 through 1998. He served in a similar capacity in India also for MTV. From its inception in 1991 till 1994, he was the General Manager-Consumer Marketing for STAR TV, News Corporation as well.
In an interview with Akshay Bhatnagar of exchange4media.com, Sarronwala sheds light on how digital music commerce has evolved over the years and how it is changing the dynamics of the music and entertainment industry.
Q. How was your experience in transition from a broadcast media professional to a music domain entrepreneur?
Well, the transition was absolutely dramatic. From a big established TV company like MTV to a set of 4 founders with just an idea and a potential business which did not exist as yet. It was like starting from scratch except the fantastic network and credibility with the music industry (thanks to our backgrounds with MTV and channel V). But we were obsessed with a drive to lead the development of digital music distribution in the region.
Q. What are the products and services offered by Soundbuzz?
Soundbuzz is in the business of digital music rights aggregation and distribution. We do it through online, wireless and media.
In online, we have partnerships with large portals like MSN, Indiatimes, Ninemsn (oz) and manufacturers like HP with their online efforts across Asia-Pacific using music as a customer relationship management tool. This is all made possible by using our music licenses with over 65 record labels (including the majors) in the region and via our secure digital rights management system that we have built together with Microsoft.
In the wireless space, we have built a property for Nokia called ClubNokia which provides ring tones and picture messages and other applications for their mobile phones. We have done the content licensing and the services for this platform across 10 countries in Asia-Pacific. We also provide ring tones and such wireless applications to other wireless portals and telecom companies in the region.
Besides this, in countries where the online take-up is still small, we use media such as TV and radio programming to further promote the music labels interests. Much of our media work takes place in Indonesia and Philippines producing high quality music TV programming.
Q. What kind of competition do you have in the digital music domain?
No competition as such. There is actually no other company in the digital music rights business across Asia-Pacific. In wireless and media, there are of course other providers but only at a country level. We therefore have reach benefits for music companies across the region and obvious economies of scale in operations.
Q. How are you doing financially?
Absolutely fantastic! Our revenue comes from the three services outlined above - online, wireless and media. It splits out as 25:50:25 approximately across the board but varies significantly country to country.
We were a million dollar (US) turnover company in 2001. And are on target to double it this year. We expect to see exponential growth from next year onwards.
Q. Interestingly, half of your business comes from the wireless market?
Actually online and wireless are both digital forms of distribution. But wireless has commercially started out earlier. The ringtone and picture message business is a multi million dollar business across the Asia Pacific.
Q. What are your India or Indians centric offerings or activities?
We run a digital music store on indiatimes offering various kinds of music downloads. A similar kind of service is under construction at msn property also. We also provide ringtone service with a national sms provider in India. Besides that we are starting a phone/song dedication service in north and south markets of India this month.
Q. Are people really willing to pay for music downloads when they have option of free access on Net already?
It is true that paid digital downloads have not taken off all over the world. The reason is the easy availability on the net through piracy. But in the case of Indian music, it's a bit different. There is a large NRI population that is extremely fond of Indian music. They don't mind paying for digital downloads.
Online music globally still has to resolve some issues in terms of pricing and compelling content. But the Indian music industry is far more aggressive than the rest of Asia with competitive Net pricing. Hopefully, it should reveal commercial reality soon.
We are therefore seeing encouraging response much more than other language repertoire. We firmly believe that it will explode with the introduction of our subscription service by the end of the year.
Q. How do you synergise offline activities with your online operations?
In terms of synergy, we try and offer a 360-degree experience as far as the market will allow - in terms of live showcase of artists together with a live/archived webcast, TV production, online promotion with streams/downloads and ringtones. In fact, we are doing that in a couple of markets but mostly we do parts of that total offering since all markets are not equipped (e.g. broadband) to offer all of the above.
Q. Which are your major content partners?
Soundbuzz has digital distribution deals with major local and international record labels across the Asia-Pacific region, offering a vast amount of compelling digital music for sale. Global majors including EMI, BMG and Warner Music as well as Indian majors such as Tips, Lahari Music, Archies, India Times Music and Inreco are some of our content partners.
Q. Is online music selling a threat to music companies adopting conventional tools of music sales?
Actually, it doesn't matter if the music companies sell it in traditional formats or in new media formats. They basically need to evolve with technology and the consumer's choices of method of consumption. The format change is therefore a reality.
Q. In your opinion, what needs to be done to lift the online music market?
I think three things need to get sorted - competitive pricing, compelling content and easy to use technology. We believe that our partners in India have got these factors right. The technology comes from Soundbuzz and Microsoft in terms of the windows media audio format and the windows drm encryption. But we are yet to see it happen in other parts of the region and the world. And of course, the music industry needs to be able to tap into new technology advances as they come about.
Q. What are your future plans?
We will continue to grow the business within the strategic parameters of online, wireless and media. All three remain strategically important to us and to the music industry.