BackStreaming platforms on way to curbing music piracy in India: Report
The overall music industry is valued at ₹1,068 crore, having grown 24.5% in 2018Over-the-top audio streaming services contribute about 70% of it
PremiumNew Delhi: The Indian music industry is battling its age-old challenge of piracy with the newly emerged category of audio streaming platforms. While the overall segment is valued at ₹1,068 crore, having grown 24.5% in 2018, over-the-top (OTT) audio streaming services contribute about 70% of it, according to the Economic Impact of the Recorded Music Industry in India, a report brought out by the Indian Music Industry along with consulting company Deloitte.
The increased penetration of smartphones and affordable data charges in India have been accompanied by an increase in the consumption of pirated content online, according to the report. In a recent study in India, 76% of internet users surveyed admitted to accessing musical content through pirated means, underlining that piracy was rampant in the country. Illegal P2P (peer-to-peer) apps, streaming apps, stream ripping websites or even infringing websites in India or neighbouring countries, such as Bangladesh and Pakistan, result in losses of $250 million annually to the recorded music industry.
That explains the abysmally small size of the Indian music industry whose ₹1,068-crore value pales in comparison with the music-driven FM radio industry ( ₹2,170 crore) and TV broadcasting ( ₹2,850 crore) or even live events ( ₹1,280 crore) and the music component of films ( ₹2,090 crore).
Legitimate means of accessing music are, however, slowly gaining ground with the emergence of new streaming sites such as JioSaavn, Gaana, Wynk, Hungama Music and others. Last March, online retailer Amazon India launched Amazon Prime Music, an ad-free music streaming service, exclusively for Prime members at no additional cost. This February, Swedish audio streaming service Spotify was launched in the country. The audio OTT segment currently generates revenue of ₹270 crore, according to the report.
“Music piracy is still a huge issue in India and streaming sites are a medium starting to work in the industry’s favour," according to Jehil Thakkar, partner at Deloitte India. “The incentive earlier for pirating music was the difference in price point, a CD was priced at maybe ₹400, while a pirated MP3 came at ₹20. But streaming sites are significantly cheaper, if not entirely free. So while the overall industry size is still smaller than it should be, it is getting some pillars of support even as we anticipate strong enforcement of anti-piracy laws."
Piracy hampers the music industry’s economic growth, leaving artists, music publishers and composers, and record labels uncompensated for their investments in content creation, marketing, promotion, and distribution. The larger effect is that of perception, as piracy creates an image that music is a free commodity, which further affects music sales.
To be sure, the music industry in India benefits, several partner industries, representing revenues of ₹8,660 crore (8.1 times the size of the recorded music industry) and full-time-equivalent (FTE) employment of 38,600 (25.2 times the employment generated by the recorded music industry) to segments, including television, radio, live events, films and audio OTT.
In addition, several informal sectors, which engage with large sections of society, derive value from music. These include brass bands, small gymnasiums, restaurants, and parlours, according to the report. Music also creates an impact in areas that do not lend themselves to quantification such as acting as a force for national integration and a tool to expand India’s culture and influence.
Every 10% growth in the music industry is likely to generate about ₹810 crore of additional revenue in the economy from formal partner industries, employment in the region of 3,600-3,700 FTE in those segments and employment at record labels for approximately 140-150 FTE, according to the report.
Apart from piracy, the other challenge that the Indian music industry must combat is the distribution of fair value for various participants in the music creation chain. Unlike the US, India still does not have provisions for payment of royalties to artistes when their songs are used in diverse spaces.
"India will always be a culturally rich nation with a long history of diverse and engaging music. But it is languishing at number 15 in the world in terms of the recorded music industry size per IFPI (International Federation of Phonographic Industry) metrics and is hardly at par with the country's global and economic or cultural position," Blaise Fernandes, president, and CEO, IMI, said in a statement. “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."
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