Online Music Streaming Service Dhingana Shuts Down

Dhingana, the Indian music streaming startup battling to stay alive for past few months, has finally shutdown

Dhingana_shuts_down

Dhingana_shuts_downThe Indian online music streaming space has received yet another blow today; Dhingana has finally closed down today after rife speculations from past few months of uncertainty. Today the site has left a good bye message with a reason that “all good things must come to close.”

Rumors became rife in December when it was reported that the service is struggling to monetize with the record labels hiking licensing costs. Sound Box, a music trade magazine reported record label officials saying that the service has decided to shut down. “Apparently, Dhingana personally called a label and informed about the end of their run in the streaming business,” the magazine had reported.

With rumours gaining strength, the Founders and Dev Khare, a board member at Dhingana & Principal (India) at Lightspeed Venture Partners which had invested $7 mn in the company avoided commenting on the development. During the same time Rohit Bhatia, the CEO of Dhingana told Medianama that the company is in the process of restructuring and road ahead.

However, Neeraj Kalyan, President of T-Series, cleared the mist by stating that it was T-Series that was no more interested in renewing its license for nearly 8000 songs as it couldn’t see traction.

“T-Series has not renewed its license for Dhingana.com and T-Series’ music has been withdrawn from the site with immediate effect. We were not able to see much traction from this platform as compared to other similar services in India and abroad and thus decided to part ways in an amiable manner.”

Talking to TC, Kalyan added that streaming business has to move to paid economy as ad-supported business is no long term solution.

“The streaming business has to slowly move from free economy to paid economy as sustainability of ad-supported revenue model is a big question mark. Free music is a very dangerous thing, and we would not like our next generation grow up believing music is for free.”

With today’s notice it is clear that it’s all over now for Dhingana.

Challenges for the online music industry

In 2013, the online music industry in the country saw many ups and downs. With Nokia pulling the plug on Nokia Music’s Indian website, In.com shutting down its music streaming service though it was not an individual decision of demand for music streaming services the market is becoming tough for startups to crack.

Medianama notes that there are two key problems in this ecosystem: exclusivity of licensing, where one player corners the rights to a particular music catalog, and another where there is a lack of standardization of licensing. While the record labels have no intention in building an alternative revenue system, record licensing is a tough nut to crack for startups.

One of the crucial reasons that hampered the monetization of Dhingana has been its inability to having the rights for mobile music. Those rights, apparently, are with Hungama Digital exclusively.

With bigger players like Gaana.com (backed by Times Internet Ltd) and Saavn left in the market due to strong financial backing, online music streaming seems to be quite gloomy  at least for now for the Indian starups. With record labels getting greedier and physical distribution dying, will we see record labels jumping in the game too?