Bollywood leads music downloads in India

Music downloads in India are gaining in popularity, thanks to wider availability of cell phones.

Music downloads in India are gaining in popularity, thanks to wider availability of cell phones -- and the thousands of songs produced each year by the country's booming film industry.

Demand for music, including ringtones, from Indian consumers has been a boon for Soundbuzz, which counts India as one of its biggest markets. "It's huge. Our business is solid in India," said Sudhansy Sarronwala, the Singaporean online music seller's chief executive officer.

"About 90 percent of the music that we sell is Bollywood," Sarronwala said, referring to the country's film industry in general. "About 5 or 6 percent is regional music, meaning non-Bollywood but Indian."

Indian demand for digital music has grown quickly, extending beyond the country's biggest cities, such as Mumbai. "You still have a concentration in the top eight cities, but the next layer of 13 cities is very mobile," Sarronwala said.

Cellular use in India has exploded in recent months, with the number of subscribers doubling over the last year, to 130 million by the end of September, according to the Telecom Regulatory Authority of India. That number continues to grow at an impressive rate. September saw more than 6 million new subscriptions, up from 5.9 million new subscriptions in August, it said.

Sarronwala expects this growth to accelerate, driven by low calling rates. "It's less than one cent per minute," he said, adding that operators are also waiving GPRS (general packet radio service) fees since they are selling a lot of content.

By the end of next year, he expects India to have between 250 million and 300 million cellular subscribers, putting the country close to a 30-percent penetration rate.

"Music is the single largest value-added service," Sarronwala said.

With around 1,000 movies released each year, India's film industry is producing plenty of music to fill this demand. "There is an average of three films per day released in the country with an average of about seven songs per film," Sarronwala said. "You're talking about 7,000 songs per year."

While demand for digital music in India primarily comes from cell phone users, Sarronwala expects PC users to account for more demand as broadband penetration rates climb higher in the coming years. "That could be quite interesting. That's a big market in and of itself."

(John Ribeiro, in Bangalore, contributed to this report.)

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