“The Indian music scene has traditionally been driven by Bollywood, but changing demographics, massive internet exposure to global music trends and a progressive youth culture are leading to evolving tastes and this growing market is set to be much more diverse in the future. “says Mandar Thakur, chief operating officer, Times Music.
From a country where hundreds of villagers huddled together in one courtyard to listen to a radio, India has certainly witnessed a revolution in the way it prefers to listen to music. The Indian Music Industry (IMI) is in fact the second oldest music industry in the entire world with record labels such as T-Series, Sony Music Entertainment, Zee Music, Tips Music, Saregama Music. That’s not much of a surprise considering the joy and pride that Indians take in when talking of their songs and movies. In fact, T-Series holds the crown for the maximum number of subscribers on its YouTube Channel in the entire world.
Evolution of the Music Industry
|Rank||Country code||Name||Continental region||Plans measured||Average price of 1GB (local currency)||Currency||Conversion rate (USD)||Average price of 1GB (USD)|
|1||IN||India||ASIA (EX. NEAR EAST)||57||18.5||INR||0.014000||$0.26|
|2||KG||Kyrgyzstan||CIS (FORMER USSR)||12||18.77||KGS||0.014330||$0.27|
|3||KZ||Kazakhstan||CIS (FORMER USSR)||26||186.14||KZT||0.002660||$0.49|
|4||UA||Ukraine||CIS (FORMER USSR)||12||13.98||UAH||0.036800||$0.51|
|7||LK||Sri Lanka||ASIA (EX. NEAR EAST)||38||140.26||LKR||0.005570||$0.78|
|8||MN||Mongolia||ASIA (EX. NEAR EAST)||26||2000.43||MNT||0.000410||$0.82|
|9||MM||Myanmar||ASIA (EX. NEAR EAST)||11||1334.13||MMK||0.000650||$0.87|
|10||CD||Congo (Democratic Republic of)||SUB-SAHARAN AFRICA||31||1454.49||CDF||0.000610||$0.88|
Till a very vast period of time, until the beginning of 2000s, song cassettes were in the play. The sale of song cassettes decided which particular albums were hit and which not. This was all regulated and controlled by the IMI.
But in the past decade with the evolution of technology, things have changed for the better with people preferring to keep their music on their smartphones. India surpassed the U.S. as the world’s second-largest smartphone market, which is estimated to reach 450 million users soon by the end of 2020. But this change was actually brought when a few years back Jio surprised the country by slashing internet prices by unleashing a tariff war to the extent that it became the cheapest rate in the world. Adding to that, is the meteoric rise of local Indian music stars. As compared to before people are now more aware about the singers and their albums thanks to apps like TikTok and YouTube famous amongst teenagers.
Piracy is still a Problem in the Music Industry
Before the advent of Jio, Indians preferred pirated music which was easily available through friends and at shops at low prices and the practice even continues today in a lot of parts in India with limited access to Internet. Every second, 285 Indians visit websites offering pirated music. Pirated music has a lot of market in India as compared to China where a crackdown brought it down to as low as 7% compared to India where it is 67%.
Music Plus, an online portal of music statistics shows that music piracy dropped by 9% in India but it is still amongst the largest markets. This gives hopes to the online streaming platforms who hope to make users pay for music.
When the consumer is driven to pay for music
This leaves a wide space for business for online streaming platforms like Gaana, Wynk, Spotify, iTunes and JioSaavan. Gaana and JioSaavan are local players and have an upper hand in this revolution. This can simply be proved by the fact that Gaana recently surpassed Apple Music and Spotify and as of now boasts of more than 150 million monthly subscribers. But there is yet another competitor in the market slowly increasing its grasps which has a global outreach, YouTube Music, larger than anyone considering the fact that is owned by Google which itself boasts of more than a billion users.
In 2017, online streaming helped the Indian Music Industry to increase it’s revenue by 27% from Rs. 570.7 crore to Rs. 725.6 crore. As of today, digital music amounts for almost the entire revenue.
The major driving factor of music in India is Bollywood, which prefers to promote their films online through social media and video platforms like YouTube and Dailymotion, thus promoting their songs online too driving the consumer towards these streaming platforms. After all who doesn’t want their fair share of money?
According to Mandar Thakur, COO of Times Music in India, “The ‘typical Indian mobile consumer’ still consumes mobile telco-based products like ring back tones and hence those products will have a long tail, whilst the ‘evolved modern Indian consumer’ consumes streaming/subscription services, is smartphone-heavy usage savvy and will grow the top end of the market . In either case – the preference by the emerging consumer is not of ‘ownership’ but of ‘rental’.”
A lot of revenue still comes from caller tunes rather than actual subscriptions. People still don’t prefer to buy music subscriptions unlike Netflix and Amazon Prime Video. Since Indian are naturally price-sensitive, so, companies prefer to bundle up these subscriptions under a single offer. Amazon offers both Prime Music and Video under a single bundle. Jio (JioSaavan) and Airtel (Wynk) offer these under their recharge plans. Bundled streaming consumption could grow to over 75% of the total market by the end of 2021.
Spotify a music streaming application launched in 2019 in India but has managed to catch the same attention that Gaana and Wynk had before it launched. This was possible due to intense promotional activities including a three-month free trial and focus on recommended content rather than pre-customized playlists content. Thus, giving the consumer a sense of comfort, which provoked them to switch over from other apps to Spotify.
Blaise Fernandes, President and CEO, IMI, says that “Various initiatives undertaken by the government like Digital India and Bharat Net programmes will enable the Indian music industry to out-perform most evolved recorded music industries in the digital domain and climb up in rankings in the coming years.”
GLOBAL vs LOCAL PLAYERS
One of the most interesting things to watch in the industry is how the global players outpace the local ones. Globally, Spotify ranks No.1 position for online music streaming. It saw a rise in subscription by 32% in 2019. Apple Music is the next in line. Global music streaming subscriptions have reached an all-time high hitting 358 million subscribers. So, who is to say that the market won’t be interesting in the coming years?
In a highly vivid conversation with Bloomberg about global players entering the Indian market, Bhushan Kumar, the current owner of T-Series says that he views it as both a threat as well as an opportunity. Foreign companies have larger budgets and highly advanced technological equipment which looms over Indian producers. But they don’t understand the Indian market as well as the local ones. So, they are more likely to team up with Indian players rather than going solo which is true seeing the number of deals taking place with each year. The Times Group for instance represents the Warner group. T-Series itself signed a long-term agreement with Amazon to release its music via the platform.
The trends in the local market are contrasting to the global one. In India, 80% of the music comes from Bollywood while the rest comes from singles. Therefore, these streaming platforms battle amongst themselves to grab the distribution rights.
Does the musician own the music?
Another issue rampant in the industry is the problem of copyrights. In 2012, the government finally amended the Indian Copyright Law to bring it in compliance with the WIPO Copyright Treaty. This has given artists and composers much-needed rights, about which most of them weren’t even aware. This amendment ensures that fair use of music survives the digital age where the ability to store music is almost present with everyone, thus in many cases denying the credit to the musicians and composers. In a few instances, there have been complaints about no payments to artists. This is mainly due to the focus on revenues instead of the quality of music, where a musician is considered replaceable and hence easily played. India has witnessed a boom of music festivals, which in turn bring in revenue, but for the investors and the producers. The musician again does not have a fair share. Pritam, a well-known music composer in a conversation with Rolling Stone India mentioned how musicians are simply given deal packages and its simply the money that mattered. The rights were simply held by the producers or the label. So, most of the artists try to get as many projects as they can. However, now the situation is improving. Instead of being a market driven just by Bollywood, the streaming industry now offers wide range of music from pop to local languages. Consider Punjab, which has become the largest music industry in India that doesn’t depend on movies with a turnover of around 800 crores including the live shows.
What the future holds ?
India is a sleeping giant waking slowly to tunes to online streaming and is a huge market for multiplayers as there is so much to cater to. Certainly, no one can single-handedly cater to the needs of more than a billion people.
Gaana and other local players are certainly at a upper hand still but it is soon about to change as India grasps more technology and looks towards the world with wider eyes than before.
The current economic slowdown caused due to COVID-19 has in fact given these companies a big boost as their share continue to rise as more and more people remain locked down in their houses under government orders.
But a rather interesting thing to see is who will be able to cash in the most from people slowly letting their wallets go. Because if they can pay for a Netflix subscription, they certainly can for a music app.
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