Chairman’s Speech – Dialogue: The Indian Music Convention 2019
Good afternoon, A very warm welcome to Ms. Sumita Dawra, JS DPIIT. Madam, we look forward to working with you on our “Vision 2022” of India entering the Top 10 music markets in the world, which is still on course despite all the economic and executive headwinds we have faced recently. Hoshiarji, Registrar of Copyrights, Ms Surabhi Sharma, Deputy Secretary DPIIT, Ms Nayonika Dutta, Deputy Director DPIIT, Lauri Rechardt, Chief Legal Officer IFPI, IMI Board Members & Members and friends of IMI, we thank you for your presence here today. Fair Value when looked at as an economic term looks very plain and simple, but when juxtaposed to the recorded music industry or for that matter the creative industries metaphorically, it can be compared to the River Ganga. A few years back everyone would have laughed hearing Indian music industry being compared to Ganga. Yes, we had some issues, but we have now brought in a host of changes over the last few years: Greater transparency overall: both in terms of buying music and licensing the same Music labels coming together with both lyricists and music composers as a single body, working towards increasing the overall publishing revenue pie for IPRS, and formulating distribution policies that are fair and are seen fair. The good news is that within 18 months of its re-registration with CISAC, IPRS has become the fastest growing collection body in the publishing world. It shows that when all stakeholders come together, magic can happen We are working on a similar partnership with singers to maximise performance revenue for ISRA Auditing and reformulating all the policies and processes of our public performance body called PPL, so as to be customer friendly, and weed out corruption and leakages Bringing in greater regional focus in all collection bodies to give fair representation to growing regional music market Bringing in professionals to run bodies like IMI, PPL, IPRS Work with Govt to reduce content piracy. The good news is that more and more youngsters are switching to legal means for listening to music. Over 60% of all music heard on music platforms is actually the last 12 months music. This means more and more new talent is getting a chance to shine We still have a lot of work to do. And we need Govt.’s help in the same. I am sure under the guidance of our dynamic Commerce Minister, Shri Piyush Goyal, we will be able to enter the top 10 music markets. The Ganga originates in Gangotri and flows through the plains of India creating its various tributaries and touching millions of lives spiritually, socially and economically. Now imagine: what if the flow of the Ganga was damned at the Gangotri? What would then be the consequences on the lives of 100s of millions of Indians, who rely on the Ganga for spiritual, economic and social sustenance? This is the situation the recorded music industry in India finds itself in for the past decade or so! If the rights holders who invest in the creation, promotion and marketing of music are not remunerated equitably and cannot exert their complete rights over their own creations, it’s as good as getting dammed at source – what incentive will there be to invest? On the other side, if Fair Value is accorded to the Copyright Owners of recorded music it will unleash tangible and intangible benefits, both economic and social. In the case of the recorded music industry let me take a moment to explain the flow of rights and commercial value between all stakeholders. Let’s take the example of film music which is around 60-70% of new music created: 1. The producer of the film pays the creative talent connected with the creation of the soundtrack, this is a pure economic activity and payments are made on demand and supply. 2. The first right that film producer sells is the official sound track rights and the money thus obtained is the seed money that goes into the production of the film. These rights are bought by music labels for 15-25cr per movie plus royalties of 30% in perpetuity post recouping the upfront payment. The music label then spends marketing monies in promoting the music of the film. Apart from music rights the film producer also recoups his cost by selling movie rights to digital platforms, TV, and theatrical. 3. The music label tries to recover its costs of 15-25cr by licensing the sound recordings to streaming platforms, TV channels, radio stations etc. On an average it takes 7-10years to recover the money given upfront to the producer. Post recovery of its upfront paid money, music label shares around 30% royalties with the film producer in perpetuity 4. The users of music have to also take publishing license from the publishing society IPRS. This money gets distributed between lyricists, composers and owners. 5. We will soon have a similar arrangement with singers of the song 6. The singers and few music composers of the songs also make money through performances in events and weddings. Thankfully for the industry, this market is booming and artistes can make in the range of 3 lakhs to 3 crore per event. So far, our Ganga is flowing beautifully and creating many tributaries. Now let me get straight to the blockages: 1. Radio Despite the fact that the recorded music industry supplies them with the raw materials: recorded music, which is the only key factor that drives listenership resulting in ad revenues, tentpole events like awards, brand solutions for clients all get monetized for the radio broadcasters – we receive paltry compensation in return: INR 60 Cr! This is only a miniscule fraction of their total revenue. This is because Radio stations are supposed to pay only 2% of their topline towards the music costs. On top of that Radio doesn’t pay anything to IPRS for the publishing rights. Imagine a 1200cr music industry subsidising a 3100cr radio
Audio OTT Economy in India at inflection point, says IMI-Deloitte report
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.
IMI Announces New Chairman of its Board of Directors
Mumbai, Oct. 29, 2018 – The Indian Music Industry (IMI) today announced Mr. Vikram Mehra, Managing Director, Saregama India Limited as the newly elected Chairman of the Board of Directors. This comes in lieu of the retirement of Mr. Shridhar Subramaniam – President India and Middle East – Sony Music India, effective September 27, 2018. Mr. Subramaniam will continue as a board member. Mr. Vikram Mehra has been the Managing Director of Saregama India Limited at RP-SANJIV GOENKA GROUP PRIVATE LIMITED since October 2014. Before joining Saregama, Mr. Mehra served as Chief Marketing Officer and Chief Commercial Officer at Tata Sky Limited. Mr. Mehra was a part of Tata Administrative Services (TAS) and has worked in many TATA companies including Tata motors and TCS. Prior to joining Tata Sky, he was with News Corp owned STAR TV and was at the helm of its foray into DTH and cable services in India. “Vikram’s experience as a global industry leader, as well as his deep understanding of Music business made him the ideal candidate to serve as IMI’s next chairman of the board” said Mr. Subramaniam, outgoing chairman of the IMI board. “For the past four years, Shridhar has provided excellent leadership, and we thank him for his service, dedication and guidance and hope to receive the same kind of a support as a board member” said Mr. Mehra, incoming Chairman of the IMI board. As Chairman of the Board since 2014, Mr Subramaniam led several progressive initiatives at IMI. He spearheaded a landmark agreement between the publisher, the labels and the creative community. He is also accredited with championing causes like official Music Charts, which is a first in the Indian music industry; and commissioning a study to assess the economic impact of the music industry — in terms of employment, the social impact and the soft power that it brings to India as a whole.