Digital Vs Physical Music streaming company Dhingana is exploring new ways to monetize its service, Swapnil Shinde, one of the three co-founders of the service told NextBigWhat in an interview.

At present, the only way the site makes money is through advertisements. “We are thinking of new revenue models but nothing has been finalized as yet,” said Shinde. The other ways in which the site can make more money is by rolling out subscription based services and paid downloads.

Dhingana raised $7 million from Lightspeed Venture Partners and others last year and also hired former Universal Music executive Ashish Joshi as Vice President for Business Development. Soon, the company signed a two year advertising deal, with Universal music.

Streaming sites like Gaana and Hungama along with online stores that sell music such as Flipkart’s Flyte and Apple’s iTunes which launched recently in India  are making the digital music scene increasingly competitive. In other words, the space is getting crowded.

“In the last year we had 200 % year on year growth on mobile. Typically every user is listening to 3-4 hours of music every month,” said Shinde. By the end of this 2012, it is estimated that digital music sales would have crossed Rs 640 cr in revenues compared to Rs 220 cr from physical music sales with 80-85%  revenue coming from mobile.

Recently Gaana also released a suite of mobile apps (review). Rival site Hungama, launched music cloud- a syncing service which allows users to access their music anywhere on any device. Hungama had earlier launched its HTML5 site that allows users to stream free music as well as buy Indian and International content.

As physical music sales declines, record labels are also jumping online to sell music in India. Digital music sales overtook physical music sales in 2010.