Digital will be the avenue to tap into, say experts, since it currently accounts for 70 per cent of revenue. However, a very large chunk of revenue is still lost to piracy. The introduction of multiple streaming platforms has helped push legal consumption of music on digital, but it is a long way to go. There are other streams, however, which can be tapped into to scale up revenues exponentially.
“One of the areas where India is severely lacking as compared to a market like the US is synchronisation revenues…The royalties to be earned by the use of music in movies and TV shows can be in hundreds of millions (dollars). Instead, it is only around $7.7 million. Another avenue is the revenue to be earned through public performance rights. This too should be in hundreds of millions (dollars) considering all the places and events that use recorded music on a regular basis,” says KT Ang, Regional Director at IFPI.
Record labels agree that royalties on music used by streaming platforms and radio companies
need to shell out more in order to use the music they do. “A Rs 30 billion industry (radio) gives less than Rs 1 billion in music royalties. That is not fair. If record labels are to invest money in the industry, be it to implement best practices, find, hone and promote new talent, or fight piracy, then there has to adequate revenue streams,” says Kumar Taurani, Chairman and MD at Tips Industries.
Currently, there is a cap on the royalties that radio companies
need to pay music labels/rights owners. It is two per cent of the individual company’s turnover. While no such cap exists for streaming platforms, there is scope for appreciation of royalties paid by them believe record labels.
Lastly, Subramaniam says, there needs to be an inversion of the consumption pyramid for the music industry to grow at the rate it has potential to. Currently, of the 400 million internet users, only 100 million are accessing music legally, and around 600,000 are paying for digital consumption of music.