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The portal today has a collection of 2.5 lakh songs across 34 genres that are streamed online or on your mobile for free. Rated by comScore as the number one social Indian music steaming service, dingana has also launched its mobile apps on Android, iPhone and Blackberry platforms.

The apps makes for 30% of the website subscribers and the duo believes this networking website will be tuning into revenue returns by early next year.

Below is an edited transcript of their interview with Shereen Bhan. Also watch the accompanying video.

Q: Why did you decided to turn entrepreneur because both you and your twin brother were working with Yahoo and before that you were with companies like IBM and ADP. When did the entrepreneurial bug bite and why the decision to get into the online music streaming business?

A: Both me and my brother have been huge fans of Bollywood. Whenever we used to go online to listen to music, the experience was quite sluggish, subpar and the music quality wasn’t that good. We wanted to change that. Since we had a solid technology background, we thought of using the power of technology to change this and that is how Dhingana was born.

Q: How difficult was it to get in the music industry and especially Bollywood to buy into this idea. What was it like when you started off in 2007?

A: It wasn’t easy. We were bootstrapping the company, so whatever savings we had we put it into this business to kick-start it. We were in India for two-three months to talk to music labels to tell them what our idea is, tell them that their content is going to be safe with us and provide them real time reports of how the song streams are happening.

Since we were just starting off, we didn’t have a good backing by anyone and so we had to rely on our user base and tell these guys that our users are growing, there is a huge potential to grow, so let’s try to create some value there.

Q: How does the business model work? What kind of arrangement do you have with the record companies? Give me a sense of commercial deals that you have put in place?

A: We work on three different models. We either pay the music label on per song stream basis or we pay them a minimum guarantee in addition to the per song stream or we just pay them a lump sum amount irrespective of the song streams. So every music label works on one of these different models. Right now our main focus has been to create world-class products, we are not focusing on the revenues right now. Starting next year we will start looking into that.

Q: How much have you already invested in the business and as you pointed out you see next year being the tipping point or the inflexion point for the business? So what do you have in mind in terms of the kind of revenues you are likely to see?

A: What we are trying to do is we are trying to study the market in US and Europe. In US you have Pandora which is doing well in music, in Europe you have spotify which is doing well. 90% of their revenues are coming from advertising and 10% of them are coming from subscription. So we are pretty much taking the same model trying to monetize using premium and branded advertising and on top of that we would be adding subscriptions in the coming year.

Q: Will it continue to be a focus only on India and Bollywood music or are you looking at diversifying?

A: I think Bollywood and Indian music, that domain itself is huge and if you consider the different online activities that Indians do, 72% of those users are pretty much interested in listening to Indian and Bollywood music. If you compare that with US, only 35% of the users who get online listen to music.

Also, the rate at which the mobile market in India is growing its quite huge, its kind of exploding. Right now we have almost 100 million users who go online and by 2015 that is going to be half a billion population. It’s even more than the total population of US, so there is no reason for us to focus on anything else but the Indian music.

Q: How big is your consumer base in India and what kind of projections are you working specifically as far as the Indian market is concerned?

A: We get almost 60% of the users from India but we are mobile focused company and we have the most downloaded music applications on iPhone and Android. We just launched our Blackberry applications, and Nokia applications are coming out this year end. So we continue to focus on that.

When it comes to mobile, we right now see that 40% of our users are currently coming from India. With the smart phone penetration and the fact that 3G going big in India, I think that is going to drastically change in the coming two years.

Q: What is different then about You talked about Pandora short while ago. How do you differentiate between yourself and Pandora for instance?

A: We are focusing on providing users with a social music experience. If you use Dhingana product you can share what you are doing with your friends, with one click you can start listening to music that your friends have been listening to, you can create playlist, share it with the community and get their feedback. So overall a very engaging social experience and on top of that what we have done is we have added personalised music recommendations.

Q: Are you looking at raising funds now or have you already got on board other investors?

A: At the start of this year, we raised some seed money from Investus and Helion and using that money we are building a team, getting the licenses and making our products better.

Q: You told us you are going to be focusing on revenues only next year onwards but what are the kinds of returns that you provide to your investors or guaranteed them? Also, give me a ballpark indication of the kind of revenue number that you are likely to hit?

A: Pandora for example, which is doing very well in US, has a market cap of around 2.5 billion, a user base of around 18 million and they have revenue around USD 100 million. So that is the ballpark that we pretty much want to hit by 2015.

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