Representative image | Photo: Shutterstock
The Indian music industry, currently estimated at around Rs 8.5 billion, could reach Rs 20 billion if best practices are adopted to maximise revenues and stringent steps taken against piracy. To achieve this, the industry would need to grow at 25-30 per cent over the next five years, believe experts speaking at Dialogue: The Indian Music Industry Convention held in Mumbai on Wednesday.
“In the past, music labels, artistes and film-makers have been at odds over copyrights and revenue sharing. That meant the industry was always divided, and that impacted business one way or another. Now, with the amendment of the Copyright Act in 2012 and consequent discussion among the stakeholders, we are moving towards ensuring that the talent in the industry gets the long-term monetary benefits, as do the labels who are investing in the business,” says Shridhar Subramaniam, President of Sony Music (India) and the Chairman of Indian Music Industry (IMI).
At present, India ranks 19th in terms of revenues when it comes to music markets. The top spot goes to the United States of America with a market size of around $4 billion, followed by Japan with a market size of close to $3.5 billion. India is at $130 million and neighbour China at number 10 with music revenues to the tune of $300 million, according to the International Federation of the Phonographic Industry (IFPI), which is an international body that represents the interests of recording industry.
“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.