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Vision 2022: Unlocking Fair Value to Stakeholders to Propel the Recorded Music Industry in India to the Top 10 Music Markets in the World

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On 3rd September, 2019, the Indian Music Industry (“IMI”) hosted the 2nd edition of Dialogue: The Indian Music Convention 2019 in New Delhi. The national conclave saw participation from key stakeholders in the music ecosystem including representatives from the recorded music companies, copyright societies, industry partners (DSPs), as well as representatives from IFPI, think tanks and diplomatic missions. The DPIIT and Copyright Office continued to show their support for the increased engagement between these stakeholders, through their participation at the event.

At Dialogue, IMI along with Deloitte today jointly launched “Economic impact of the recorded music industry in India”. Ms Sumita Dawra, Joint Secretary, DPIIT, unveiled the report along with Mr Vikram Mehra, Chairman, IMI.

“Vision 2022: Roadmap for India to reach the top ten music markets in the globe” per IFPI metrics was the mission statement of Dialogue 2018 and I am pleased to say that we are on course to achieve our objective. India jumped to 15th place in the IFPI global rankings in 2019 from 19th in 2018. For the 3rd year in a row IMI members have recorded an average of 20% growth rate for the past three years. Today we are at US$ 156.1 mn and are currently around US$ 143 mn away from reaching the 10th spot. Some of the low hanging fruits are:

Sync Revenues:
With digital advertising growing at 33.35 % and the total pie at approximately US$ 2.64 bn or INR 169 bn in India, the increase in advertising spend is an opportunity for our members and IMI is working at various levels and forums to evangelize the effective and economic use of sync licenses with the advertising fraternity (brands, associations etc.) and the advertisers.

Driving traffic to legitimate sites is another key focus area:
As per the IFPI – IMI Digital Music Study 2019, research indicates 67% consumers still visit pirated websites for their music needs. We commend the efforts of CIPAM, MCDCU and IMI continues to support these efforts. IMI has welcomed the Dynamic Site Blocking ruling of the Delhi High Court. Piracy is like cancer needing both chemotherapy and palliative care. The focus has been on chemotherapy and the industry will maintain those levels but will also increase our efforts on palliative care and work together with the all the stakeholders, the DSP’s, telcos and the creative industries in driving traffic to legitimate sites.

Lastly, Brazil earned US$ 77.4 mn in Public Performance revenues when compared to US$ 14.7 mn earned by India, we are hopeful that PPL will be granted society status soon and that will help us grow this revenue stream.

The recorded music industry in India embodies and has many touch points with our Hon’ble Prime Minister Shri Narendra Modi’s vision to name a few, #STARTUPINDIA #DIGITALINDIA #MSMEINDIA #INVESTINDIA.

We live in interesting and challenging times.

A joint report of both of the events can be downloaded here

Digital Music Study, 2019

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IFPI designed and ran the Music Consumer Study, 2019 across 21 of the world’s major music markets, exploring the music habits of consumers worldwide. Fieldwork was carried out by independent research agency AudienceNet. India was a key part of the study and this document explores some of the insights taken from the responses of the 3,000 surveyed Internet users in India aged between 16-64. The policy implications of this study are also discussed.

Key Insights:

  • The society in India has a strong engagement with music across ages and platforms; 80% of surveyed internet users
    identified themselves as “music fanatics” or “music lovers”, higher than the corresponding global average of 54%.
  • Compared to their global counterparts, the surveyed respondents in India showcased a greater preference to
    visually engage with music- with the time spent on video streaming services accounting for 28% of the average user’s
    total listening time in India, i.e., 5.3 hrs/ week, compared to the global average of 19.6% or 3.5 hrs/ week
  • Radio engagement in India is high, increasing even; on an average, 86% of surveyed respondents used radio (live or on demand) to consume music – engagement with radio formats was equitable across all age-groups, though consumption was particularly higher in the age group of 35-44 with 90% users opting to listen to music on the radio in the past three months.
  • Music listeners aged 16-44 are more likely to pay for audio streaming as they prefer an ad-free experience, the autonomy to listen to anything at any time, convenient form of music streaming and access to a one stop shop for all their respective music preferences.
  • An emerging form of copyright infringement, social media piracy has emerged in India owing to developments in app space. Certain apps make available on their platforms unlicensed sound recordings owned by record labels in India and seek immunity under “safe harbour provisions” to escape liability

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Read the full report here

Indian Music Industry (“IMI”) and Deloitte report: Recorded Music Industry’s contribution to Indian economy at INR 8660cr

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New Delhi, Sep 3, 2019: Indian Music Industry (“IMI”), the apex trade body representing the recorded music companies on a pan-India basis, along with Deloitte today jointly launched  “Economic impact of the recorded music industry in India” report at Dialogue: The Indian Music Convention 2019. Ms Sumita Dawra, Joint Secretary, DPIIT, unveiled the report along with Mr Vikram Mehra, Chairman, IMI and Managing Director, Saregama India and Mr Blaise Fernandes, President and CEO, IMI.

Also present at the launch were – Lauri Rechardt, Chief Legal Officer, International Federation for Phonographic Industry (“IFPI”); KT Ang, SVP, Public Policy – Asia, Universal Music Group and Edwin Yee, SVP and Regional Counsel, Sony Music Group and Jehil Thakkar, Partner, Deloitte India.

The report estimates recorded music industry in India to be INR 1,068 crore (about 0.006% of India’s GDP), employing 1,460 full-time employees. It pegs the ripple economy effect to be more than 8.1 times the size of the recorded music its size, with estimated revenue of INR 8,660 cr, generating full-time-equivalent (FTE) employment of 38,600 (25.2 times the employment generated by the recorded music industry). These estimates do not include the multitude of informal users/usage of music which touch large sections of society – such as brass bands, small restaurants, parlours, and gymnasiums. Lastly, the report highlights the non-quantifiable but powerful effects of music, including its ability to cut across cultures and its ability to heal.

“Every 10% growth in the music industry is expected to generate INR 810 cr of additional revenue in the economy from formal partner industries and can ensure employment in the region of 3,600-3,700 FTE in formal partner industries. While at present, the recorded music industry is growing in pace with changing technological trends and is earning significant revenue from streaming services, among other channels in the ecosystem. It is important to establish a fair value to all stakeholders in the value chain. We can expect additional investments in this sector if the fair value and value gap issue get fixed” said, Mr Vikram Mehra, Chairman, IMI. The IMI-Deloitte report states the need to unlock fair value for the music industry by systemic policy changes and cohesive approach towards eradicating piracy. Lack of fair value is seen as the biggest hurdle, creating bottlenecks for investments, addressing which will pave the way for India to become one of the top 10 music markets in the world.

Mr. Vikram Mehra, Chairman, IMI said, “The recorded music industry is uniquely placed in India to enter the top 10 music markets.However, we still have a lot of work to do, and we need govt.’s help in the same. If Fair Value is accorded to the Copyright Owners of recorded music it will unleash tangible and intangible benefits, both economic and social. Just imagine the lives the music industry can and will touch, the employment that it can and will generate and the contribution to the economy and GDP that it does but is so sparingly measured.”

Expressing his views on the issue Mr Blaise Fernandes, President, and CEO, IMI said, ” India will always be a culturally rich nation with a long history of diverse and engaging music, it is languishing at number 15 in the world in terms of the recorded music industry size per IFPI metrics. It is hardly at par with the country’s global and economic or cultural position. Clearly representing a value gap in the entire music value chain – if the value gap problem is addressed this will usher in a new era for the music industry in India. The creative talent and the recorded music industry are partners with the high-value platforms, but this report indicates that the partnership needs recalibration in favour of the recorded music industry and the creative community.”

Mr. Jehil Thakkar, Partner, Deloitte India, said, “Music is a universal language, and is a powerful tool to expand India’s influence and spread awareness of many things Indian − be it yoga, tourism, or made-in-India products. India’s diversity in culture and language has made the country’s musical output rich and varied. It is important for all stakeholders to cherish, preserve, and invest in India’s creative communities as the country looks to take its rightful place in the world.”

The report can be accessed here.

Audio OTT Economy in India at inflection point, says IMI-Deloitte report

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February 12, 2019, Mumbai: A report on the growing Audio OTT industry values, the Indian OTT market at USD 280 million, with revenues from the audio OTT industry contributing to 67% of the total recorded music revenue in India. Audio OTT includes delivery of digital music content over the internet to the consumer by independently hosted applications that procure content from music labels, publishers and other distributors. The report, based on a study by the Indian Music Industry (IMI) and Deloitte shows audio OTT poised to take off on the back of a digital music explosion in the country.

Speaking at the launch of the report, Mr. Blaise Fernandes, President and CEO, The Indian Music Industry (IMI) said, “India is a music loving society with Indian consumers spending 21.5 hours every week listening to music, against the global average of 17.8 hours. Helping to satisfy this love for music is the audio OTT industry which is at an inflection point today. The launch of various Indian audio OTT platforms like JioSavaan, Gaana, Hungama, Wynk and Vodafone-Idea, as well as International platforms like Apple Music, Amazon Music, Google Play and the impending arrival of Spotify offer immense potential for the growth of the Audio OTT industry not just restricted to India, but across borders as well.”

Mr. Blaise Fernandes added, “If a Despacito can become a hit in India, if K-Pop can cross geographical boundaries, then the scope for music from India is infinite, with different regional languages poised to dominate local and international markets driven by the reach of the Audio OTT platforms. The report amplifies on all aspects of the Audio OTT industry including policy changes, potential trends and developments that will shape the future of the industry.”

The report also highlights the contribution of the recorded music industry to the growth of the audio OTT platforms with all major stakeholders from lyricists, music composers, performers to film producers, music, actively creating for and licensing content to the digital platforms to boost music consumption. The expected growth in smartphone users to 829 million in 2022 from just 404 million at the end of 2017, highlights a digital revolution, where an increasing number of people will shift to digital platforms to consume music. As at the end of December 2018, there were nearly 150 million music streaming users in India, while seemingly large are still only 60% of the online video audience. This indicates a significant growth opportunity with audio OTT platforms emerging as the preferred medium to consume music in the country, and the OTT market valued at over US$280 million in January 2018, poised to show strong growth in the next few years.

The report examines the various business models as the Indian recorded music industry moves ahead on the digital path. The writing is already on the wall with physical sales of CDs showing a steep drop from 35.5 million in 2013 to 0.4 million units in 2017. Audio OTT platforms will be a key driver of growth in the future – digital revenue has already shown an increase from US$ 74.4 million in 2016 to US$ 102.1 million in 2017. The report also examines the implications of piracy with US$250 million lost each year on account of piracy in India. It evaluates the anti-piracy measures in India by music labels, regulatory bodies, government, and other stakeholders to curb this major source of money leakage. India’s recent approval for accession and ratification of World Intellectual Property Organisation’s (WIPO) internet treaties to protect intellectual property rights of artists and content owners reflects the level of IPR awareness in the country. It examines successful initiatives in countries like China to curbs piracy and encourage more users to subscribe..

FDI and FII represent major sources of investment for the Audio OTT industry in India, with investors like Tencent, Tiger Global, Liberty Media and Xiaomi investing over US$300 million in the audio OTT industry. The report also examines the various challenges faced including piracy. There is a need for free-market licensing norms to help sustain the digital ecosystem, where content owners and creators are sufficiently remunerated, in order to sustain and encourage investments in content. It is then that India can take a major position in the global recorded music space.

The report can be read in full here.

Digital Music Study 2018

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IFPI designed and ran the Music Consumer Study 2018 across 20 of the world’s major music markets, exploring the music habits of consumers worldwide. Fieldwork was carried out by independent research agency AudienceNet. India was a key part of the study and this document explores some of the insights taken from the responses of the 2,000 surveyed Internet users in India aged between 16-64. The policy implications of this study are also discussed.

Key Insights:
– Music is central to the lives of Internet users in India. An average user spends 21.5 Hours listening to music per week – more than three hours each day – which is more than the global average of 17.8 hrs/week.

– 96% of respondents listened to music on smartphones – the highest rate in the world.- Younger respondents listen to more music than older age groups. Internet users in the 16-24 years age group listened to 23.9 hrs/week as opposed to 21.5 hrs/week national average.

– On-demand streaming (comprising paid and free audio streaming services and any kind of video streaming) and social media accounts for nearly half (49%) of all the time spent listening to music.
– Piracy continues to have a huge impact on the recorded music industry in India. While the ease of access to licensed content on a plethora of audio streaming platforms offers consumers a simple way to consume licensed music, 76% of internet users still admit to using pirated music in the last three months.
– Internet users in India spend nearly 3 hours each week (13% of total time) listening to pirated music. That means Indian internet users listen to pirated music for more time than in any other country in the study.

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Read the full report here.

VISION 2022: India’s Roadmap to the Top 10 Music Markets by 2022

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On 22 August 2018, the inaugural Dialogue: The Indian Music Convention 2018 was held in Mumbai, India. The conference theme ‘VISION 2022: India’s Roadmap to the Top 10 Music markets in the world by 2022’ brought all the stakeholders of the Indian recorded music industry, under the same roof.

This was a historic day, since for the first time, all stakeholders came together with a united vision to be among the top 10 ranked music markets globally in the International Federation of the Phonographic Industry (IFPI) rankings by 2022.

The Indian Music Industry (IMI) is grateful to seven members who have supported the corpus of the National Group through the tough times. Now that the worst is behind us and we have seen two consecutive years of an average 25% growth, I urge all the record labels to make financial contributions to the IMI corpus.  You have witnessed our outreach programs in Chennai, Chandigarh and Kolkata and now Dialogue 2018 in Mumbai. We have more plans in store to ensure continued engagement for all stakeholders for the development of the record music industry.

The tailwinds are in our favor and technological innovations have created great economics in various sectors. Football is still the same game as it was a 100 years back, but today it’s a $28 billion-dollar industry. Closer home, Kabbadi played in the street corners and paddy fields is now a $3.3 million industry. There is a digital music explosion underway and the inaugural Dialogue 2018 is only the beginning of the discourse on how can the Indian music industry ride this $17.3 billion wave, also to identify the headwinds namely Price Regulation & Controls, Fair Value to creators, Value Gap, Digital Piracy a few to name and figure out how to tackle these headwinds. IMI will always, along with its partners like PPL and IPRS and count on their support to pave the path towards Vision 2022.

The sessions were carefully curated to ensure that the voices across sectors and regions are heard. IMI endeavors to make Dialogue: The Indian Music Convention, a yearly event.

 

Blaise Fernandes

President and CEO

The Indian Music Industry (IMI)

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Download the full report here.