The Indian music industry, which is currently estimated at around Rs 8.5 billion, could reach Rs 20 billion if practices to curb piracy are adopted to maximize revenues.
The Current Scenario
- Streaming revenue was key and accounted for 66.8% of the overall market anddigital sales contributed to 78.5% of all sales revenues.
- Income from subscription audio streams tripled to ₹220 Cr. while ad-supportedstreaming income fell by 29.5% in 2017.
- Video stream revenues were ₹170 Cr., 29.8% of total streaming.
The study also found that many users stated that downloading for free through piracy stops them paying for streaming: 38% said they prefer downloading music for free and 32% say they can download whatever they want for free.
With audio and video streaming services contributing 66.8% of the total Indian recorded music industry revenue, there is potential for substantial growth in the uptake of subscription streaming services.
The survey takers were also asked how they would access music if access through pirate services ceased to be available. 97% of respondents would opt for licensed alternatives, with 53% of respondents choosing paid services like paid streaming and purchase of digital downloads.
Industry experts are optimistic that music consumers in India will pay for content if sufficiently incentivized but clearly more needs to be done to facilitate this change.
The Revenue Battleground
In the past, music labels, artists and film-makers have been at odds over copyrights and revenue sharing. Now, with the amendment of the Copyright Act in 2012 and consequent discussion among the stakeholders, we are steadily moving towards a reality where the talent in the industry gets the long-term monetary benefits, alongside the labels who are investing in the talent.
Digital is the obvious bet when it comes to avenues to tap into, according to experts, as it accounts for 70 percent of revenue for the industry, already.
A huge chunk of revenue is still lost to piracy and while the introduction of multiple streaming platforms has helped push the legal consumption of music on digital, it is a long way to go to reach optimal levels.
While higher adoption of music streaming services has helped digitize the music recording industry it is not yet steering consumers away from consuming music from pirated websites.
A phenomenon called stream-ripping remains a major threat to the Indian music industry.
72% of respondents of the IFPI study use stream ripping to obtain free downloads of music. Stream-ripping is the number one method for piracy across all age- groups. YouTube is the main source of content for stream ripping, typically through websites like Convert2mp3 and Flvto.biz.
IMI, in association with IFPI, has made several attempts to take down major infringing sites, However, ISPs based outside of Indian territory refuse to act despite clear and large-scale infringements, citing their domestic protection towards user-generated or user-uploaded content, often claiming the protection of the Safe Harbour privileges in US law. This makes the case for website blocking more important: if infringing sites based outside India refuse to cooperate with rights holders, then the most effective method of relief is to block access to those sites from within India.
There needs to be an inversion of the consumption pyramid for the music industry to grow at the rate it has potential to grow. Of the 400 million internet users, only 100 million are accessing music legally, and around 600,000 are paying for digital consumption of music, which means there is scope to grow and expand the revenue streams.
The Indian music industry continues to ride the wave of growth generated by digital consumption, increased smartphone penetration, and access to cheaper data, obstacles such as the lack of fair valuation of content on some platforms, improper implementation of price regulation, and digital piracy threaten this potential for growth.