India is often cited alongside China and Latin America as one of the music markets with huge potential for contributing to the next 100 million music subscribers. But can non-Indian artists and labels be part of this?
A panel session at Midem today discussed some of the current trends, legal developments and opportunities to do business in India.
It included Mandar Thakur, chief operating officer at Times Music; Sonya Mazumdar, CEO of EarthSync India; and Gaurav Sharma, VP of growth and data science at Saavn. The moderator was Outdustry MD Ed Peto.
There are huge cultural and historical reasons for why the music industry has developed the way it has in India – and that is also still shaping how it is developing in an age of streaming and mobile-centric consumption.
Thakur explained that the centre of gravity in the country caused by the Bollywood film industry is such that it defined how music developed there. “The music industry was always a subset of the film industry,” he said. “India never really had a music publishing industry. But in May 2012, the Indian Copyright Act changed to recognise songwriters and the rights to royalties for those songwriters.”
He joked about how things have changed since. “Copyright in India used to mean the right to copy,” he laughed. “But now copyright is the right to protection!”
Peto talked of how these two worlds – Bollywood and digital – are colliding and how that is recalibrating the industry.
“In what are the early days of digital music’s arrival in India where we effectively have the giant Bollywood structure smashing into this new digital ecosystem, it is primarily done by licensing those catalogues into a service via a minimum guarantee deal,” he said.
“If you are part of one of those deals, then you participate in a negotiated minimum guarantee. If you are outside of the ability to be a part of that catalogue, you almost don’t participate in a meaningful way.”
Sharma suggested that digital is really levelling the field in the Indian music market.
“India is in a really interesting moment in music because Indian music is almost democratising,” he said. “It is not only building relationships with the major labels and larger independents, but it is also having a structure in place for more of the grassroots indies to be able to get their content on [services like] Saavn.”
He felt that would only increase as companies like his roll out dashboards for labels and artists to really make sense of their streaming data.
“We will give them [artists] incentives such as if they reach a certain level of streaming then we will place them in our weekly Top 15 playlist,” Sharma said of their plans here. “Labels would have fought in the past to get onto that and we are just trying to level the playing field for everyone.”
He also shared some numbers for the service. It has 20m monthly active users and this is steadily moving upwards. “We are growing organically by about 1-2m users a month,” he said. “There is definitely opportunity. We are still scratching the surface.”
Thakur warned, however, of the mythology that has built up around India as the second most populous nation in the world. While it has a population of 1.3bn, the fact that many people there live in extreme poverty means the “addressable audience for music is fairly tiny”.
Cheap mobile data, however, is proving a key way to unlock music’s potential here.
“The infrastructure is improving very quickly and the user habits are evolving very quickly,” suggested Sharma. “In September last year, Reliance [one of the country’s leading GSM service providers] released a free unlimited data plan for mobile subscribers. The idea was to really incentivise users to understand what data consumption was. Prior to that, over 50% of our streaming was happening on Wi-Fi which made it very difficult for users to actually stream content.”
He added, “When we looked at our DAU over MAU and other KPIs for us, the Wi-Fi and data connectivity break up really restricted users from being able to stream. Since Reliance has gone live and users are using data, 75% of our consumption is now through data connections. Of that, 88% is on 4G. Even though the connection is what people in Western markets might think of 3G connection speeds. The infrastructure is improving very quickly and the consumption habits of the users is just evolving very quickly.”
Mazumdar suggested there is still work to be done in terms of getting more artists on side and fully conversant with the benefits of digital in general and streaming in particular.
“There has to be a more navigable and user-friendly interface between the artists and the services,” she suggested. “At the end of the day, an artist doesn’t have that kind of knowledge to take those kinds of decisions around where they are going to put their content. Everyone tells acts to get their content on digital services and they will make it – but that is quite a myth.”
It was estimated that upwards of 60% of label income in India is coming from streaming, but it is still a huge investment for companies to get set up and established in the market.
Thakur spelt that out in stark terms. “Labels typically invest a lot to break an artist,” he said. “It costs anywhere from $1m to $5m to buy a large Bollywood soundtrack. That one soundtrack is not going to make [your fortune]. If you don’t have 20 of them in a year, you might as well pack up shop if you want to play in the space. That’s you level of investment if you want to play at that game.”
While Bollywood casts a huge shadow over the Indian music industry domestically and internationally, things are changing. Sharma estimated that five years ago, 95% of listening was Bollywood music but that has now dropped to 85%. He talked of a film decoupling in music that is having a noticeable impact on listening habits. “We are seeing the percentage of streams from Bollywood going down but also the number of Bollywood songs being created per film going down,” he said.
Asked why that was, he speculated that because GarageBand was the #1 paid app in the iTunes App Store in India six years ago, we are seeing a new type of music creator come through for whom Bollywood is not the be all and end all. “English catalogue is starting to make a dent,” he added.
Marketing is still very traditional in the country, even with the rise of digital platforms and the scale of YouTube there.
“Despite a large digital presence, TV and radio are still the most effective media and I don’t think that is going to change any time soon,” said Thakur, before explaining a fundamental issue to grasp in order to really understand the local market dynamics. “India has never come from an artist-driven culture,” he said “We always came from a song-driven culture due to Bollywood films.” That means that only now are labels starting to perfect ways of marketing acts.
As with China, it is felt that free is not going to be the panacea there – but the market reality for consumers in India is that subscriptions are a hard sell.
Sharma explained how Saavn is rethinking this.
“Our focus for the last eight months is unlocking some scaled revenue,” he said. “A lot of people say India won’t pay. Our point of view is that when you look at the diaspora – those Indians outside of India – we made Saavn completely paid outside of India back in February. Two months in, we cracked top 10 terms of iTunes revenue-generating apps in music in 20 different countries. Indians [outside of India] are willing to pay.”
He added, “India isn’t ready to subscribe yet and that kind of thought process isn’t really there yet. But the data is showing that it’s at least trending towards that.”
But that is getting ahead of the where the market actually is today. Digital is seen as something that will really come to fruition in the coming years – but the real boom happening there now is live music.
Thakur talked of the popularity in India of EDM as well as Western acts like Ed Sheeran and Justin Bieber. Live is unlocking the potential of the Indian market and will pave the way for everything else.
“It’s live first,” said Sharma, “and then streaming.”
Music Ally’s Midem 2017 coverage is supported this year by Music is GREAT, the British government’s campaign to promote UK music exports.
The UK and British Music are represented through the British Music at Midem stand, with the Department for International Trade joining forces with music industry associations AIM (Association of Independent Music), BPI (British Phonographic Industry), MPA (Music Publishers Association), PPL (Phonographic Performance Limited) and PRS for Music.
Together, they will support over 150 UK music businesses and member delegates as they seek to pick up on the latest trends, connect with international companies, sign deals and develop trading and export opportunities.