This could be music to ears of prime minister Narendra Modi-government. While the country is struggling to arrest slowdown in economic growth, there is one sector - Indian recorded music industry - that has registered a 24.5 per cent growth from Rs 858 crore in 2017 to Rs 1,068 crore in 2018. Although physical sales of recorded music, revenues from online streaming and performance rights are all considered part of the direct income generation streams of the industry, about 70 per cent of the total industry revenues came from streaming alone, a just released industry analysis states. The rest of the growth in 2018 came from other digital products ($13 million), physical record sales ($11 million), performance rights ($15 million) and synchronisation ($9 million).
The "economic impact of the recorded music industry in India" report prepared jointly by the Indian Music Industry (IMI), the apex trade body representing the recorded music companies and global advisory Deloitte says that in addition to the direct revenues the industry generates, it also creates a multiplier effect as music flows to its 'formal' partner industries of television, radio, live events, films, and audio OTT (Over the Top). These partner industries were estimated to represent revenues of Rs 8,660 crore (8.1 times the size of the recorded music industry) and full-time-equivalent (FTE) employment of 38,600 (25.2 times the employment generated by the recorded music industry).
The reports says that if the country manages to tackle the key problems plaguing Indian music industry, India can become the top 10 music markets in the world. Highlighting the need to arrest a 'piracy epidemic' in music industry, the report says that illegal peer-to-peer apps, streaming apps, stream ripping websites or even infringing websites in India or neighbouring countries, such as Bangladesh and Pakistan, result in losses of about $250 million annually to the recorded music industry. Legislative and regulatory impediments to achieving fair value was another problem highlighted in the report.
"Statutory licensing takes away the basic copyright of owner's hard earned 'exclusive' property for the benefit of private parties. It takes away the very basic right of ownership on any commercial exploitation which is mandatory in a free country as ours," says Manoharan Naidu, Managing Director, Lahari Music.
One of the key impediments to revenue growth was identified as the low penetration of paid music. "Consumers in India are not accustomed to paying for music. While ad-supported OTT platforms have witnessed rapid growth, subscription-driven OTT music streaming platforms face a challenge. The conversion (into subscription) among 150 million music listeners on OTT streaming platforms is low - at about 1% ", the report points out.
One of the suggestions given by the stakeholders to speed up growth in music industry is by encouraging the development of creative cities. "Cities with a performing centre ecosystem have been proven to generate economic activity of $ 100+ million through cultural/ tourism services and its ilk . For instance, Esplanade in Singapore, the Opera House in Sydney, and the O2 in London are tourist attractions that are key to community engagement and bring in millions in revenue and employment generation to the exchequer. Seeding a performing centre ecosystem into the next blueprint of India's smart city initiatives could boost some of the key drivers of economic growth viz. travel, tourism and hospitality", the report suggests.
"Every 10 percent growth in the music industry is expected to generate Rs 810 crore of additional revenue in the economy from formal partner industries and can ensure employment in the region of 3,600-3,700 FTE in formal partner industries. While at present, the recorded music industry is growing in pace with changing technological trends and is earning significant revenue from streaming services, among other channels in the ecosystem. It is important to establish a fair value to all stakeholders in the value chain. We can expect additional investments in this sector if the fair value and value gap issue get fixed" said, Vikram Mehra, Chairman, IMI.
The report was launched at The Indian Music Convention 2019, in Delhi on September 3.