This exclusive interview is taken from our recent Quarterly Report – the 2023 International Report – which Music Ally subscribers can access here in full.
Distributor Believe is focusing strongly on international growth, and accordingly, it now has offices in six Indian cities: Mumbai, where it is headquartered, as well as Mohali, Chennai, Delhi, Bengaluru and Hyderabad.
This is because India, according to Believe founder and CEO Denis Ladegaillerie, is the “perfect market” for his company. This is due to a number of factors, Ladegaillerie tells Music Ally at Believe’s India headquarters in Mumbai during a visit to the city in April. Firstly, “we focus on markets where local artists represent most of the streams,” he explained. “For Spotify [here], 75% of the streams last year came from local artists. Even more so, the market is regional, which makes it richer, more diverse, more interesting.”
The second factor, he says, is that the country is “a very digital market” where, according to the IFPI’s Global Music Report, streaming and other sources of digital income accounted for 90% of India’s recorded music revenues in 2022. “Because it’s digital, [we’re] able to provide more value to artists.”
Finally, says Ladegaillerie, “when we look at the makeup of revenues for artists in India, YouTube is 50% and Spotify is close to 20% – and these are both services where Believe is better, in India and anywhere else in the world, at developing artists. This makes it a very strong market for us in terms of the value proposition to artists and their goals.” Streams for the 32,000 Indian tracks Believe has made part of Spotify’s Discovery Mode programme, he claims, have increased “by close to five times”.
A perfect market, naturally, is also a “priority market” and the company has consistently invested in the country both through the deals it has signed with artists and labels and by making a series of acquisitions. In 2019, Believe went on a buying spree, purchasing Bollywood record company Venus Music – which it subsequently renamed Ishtar – as well as live production firm Entco Music and artist management agency Canvas Talent. Then in 2021, it picked up a 76% stake in south Indian regional language label Think Music for €13 million.
Those bets seemed to be paying off: earlier this year, Believe reported that revenues grew 31.8% to €760.8m in 2022. Though the company does not publicly break down its financial results by country, revenues from Asia-Pacific and Africa grew the most in 2022, up 52.7% to €199.3m. Within APAC, “India is the largest market”, generating “between 40 and 50%” of the revenues from the region, Ladegaillerie revealed. “It has been one of the fastest-growing markets and is going to be in the future. In the past year, growth was slightly impacted by the fact that it’s a very YouTube-heavily dependent market and ad-supported monetisation has been lower.”
Despite that, Believe India managing director Vivek Raina says they’re the “largest player” in the “independent sector”, with their releases’ share of overall listenership across audio-streaming services and YouTube below only that of international and local majors. (The company uses the term “independent” to refer to all music outside of Indian-language film soundtracks.)
During the first quarter of 2023, Believe even managed to garner the largest share of listenership, among all labels and distributors, on Spotify in India. “What’s important for us is that this is [mostly] local catalogue,” says Ladegaillerie. “International catalogue for us [here] is very small.”
Raina and his team were early to identify the potential of the market for Indian regional language music, which has been one of the fastest growing segments of the domestic industry over the last decade. “We focused on the regional wealth of the Indian music business [as opposed to the majors] who were focusing on the Hindi side of the business,” says Shilpa Sharda, Believe’s director of artist services.
Sharda feels that Believe’s a la carte approach makes it well positioned to cater to the regional sector, as the market for every language has its own dynamics. “Each territory has a different set of requirements,” she says. “Our strategy for a Punjabi artist would be giving them a 360-degree deal. They know exactly why Spotify is important, why Apple Music is important. In [contrast], the Bhojpuri market is still dominated by YouTube. Their focus is ‘How many videos will we do?’.”
Believe declined to provide a breakdown of the various regional language music’s impact, but a spokesperson stressed the breadth that its artist and label clients cover: “they span the whole country, representing a variety of languages encompassing Hindi, English, Punjabi, Bhojpuri, Haryanvi, Gujarati, Marathi, Tamil, Malayalam, etc.”
Believe’s next aim is to increase the artist services and development roster to 100 acts, with an eye on Hindi, Bhojpuri and Haryanvi music acts and “all the belts where historically there have been independent artists”, she says. According to Raina, regional language music’s portion of overall consumption will rise from 30% to 40% in the next two to five years, at the cost of international music. “You have at least 15 top languages in India,” says Raina. “Each language has its own superstars.”
While revenues are growing, profitability is more of a long-term prospect. Ladegaillerie says that he’s “pretty satisfied with where we are in terms of profitability” given that India’s advertising revenue-reliant market is in its “infancy”. “Markets typically take 20 to 25 years to mature,” he says. “When we model paid subscription, we see the same trends everywhere, which is typically, you go from no paid subscription to 0.1% to 0.25% to 0.5% of the population. Right now, India is at 0.6%. Next year, you will be at 1.1 or 1.2%, the year after you’ll be at 2.5%, the year after that at 5% and then afterwards, for five-six-seven years, it’s going to grow 3 to 4% per year towards 25 to 30% of the population.”
In other words, the stage is set for a period of accelerated growth. “Everything that we’re seeing goes in that direction,” says Ladegaillerie. “The Indian market is going through a pivotal moment where it’s going to be painful for some labels – because they negotiated very high minimum guarantees and some services are now saying, ‘I’m not willing to pay these because I’m bleeding, so I’m going to pay you a revenue share and I’m going to move to premium’. Which we think is good and healthy. My view is growth has been slowed down by the fact that you had too many free, ad-supported services not monetising.” Notably, Gaana and Resso turned into subscription-only platforms in 2022 and 2023 respectively, and Spotify’s newest ad campaign highlights its premium tier.
In the near future, we can expect Believe to “do more investments, acquisitions and long-term partnerships [in India] to help build solutions in specific genres of music”, he says. Like, for instance, its exclusive agreement to distribute releases from film production house Panorama Studios. “Production houses are realising that they can work with a services provider and retain their rights,” says Raina. The focus though will remain on “developing local artists and eco-systems”, says Ladegaillerie. “The next question we will ask ourselves is: How do we help some of these artists become international stars?”
Believe’s big hits:
The Punjabi pop smash performed best on YouTube where regional language music over-indexes.
Hindi rapper MC Stan’s sophomore full-length Insaan debuted at No.1 on Spotify’s Weekly Top Albums India chart.
This viral devotional music hit peaked at No.1 on YouTube’s Top Music Videos chart in India.
“Kali Kali Zulfon Ke (lo-fi)”This remake of the Nusrat Fateh Ali Khan classic reached the top ten of the Spotify Weekly Top Songs India chart before it was acquired by T-Series.
Header photo credit: Anis Martin