Music streaming service Dhingana politely bids adieu to its customers with a Goodbye message on its site. Started in 2008, music site finally shut its service on account of piracy and lack of sustainable revenue model. The firm, which competes with US-based Saavn, Times Internet- promoted Gaana and Hungama, was known to be the most popular song downloading site. All of them have paid services and mobile applications.
While the firm has not issued any official statement on site going mute, experts believe that it was facing issues over piracy (Indian media and entertainment industry loses of about $4 billion every year) and licensing agreements. It is reported that several music labels had pulled out of the licensing agreement with the recent one being T-Series for about 8,000 songs. This has reportedly caused a huge loss to Dingana.
Dhingana, funded by institutional investors Helion, Inventus and Lightspeed Venture Partners, had raised $7 million in Series B last October.
Last November, in.com, a part of Network 18 Media has shut its music streaming business on issues of piracy and generation of revenues. Last year in December, Rediff had shuttered its music streaming service Soundbuzz. Flyte, the paid download music service of Flipkart, also went silent last year after music lovers shifted to the format of streaming music, which comes free and can be enjoyed at a click of button at any remote place such as mobile, iPad, iPod and similar devices.
Rishi, founder of Saavn, is of the view that the streaming platform was a scalable model, where revenues generally come through advertising and subscription. He also said that the consumers in India were opting for the streaming format with the entry of cheaper smartphones and tablets. In mature markets like the US consumers were seen preferring streaming format over iTunes, he added.
Mukund Mohan, Director, Microsoft Ventures, which invests in several start-ups, feels that there was no problem with the model of streaming but the challenge remained was in the economics, usage and psychometrics of Indian consumers.