Music labels in a pickle with rising costs, shrinking soundtracks

Filmmakers who feel audio streaming is bringing significant returns for music companies are demanding massively higher rates, with most deals being struck in the early stages of the movie’s life cycle when the music hasn’t even been put together. While these deals are signed based on the reputation of the production banner and music composer besides the lead cast, labels say they are at a serious disadvantage given the quality of Hindi film music lately that is gaining no traction and the fact that the number of songs per film has reduced significantly. Meanwhile, southern producers are also asking for higher rates based on the increasing pan-India popularity of their films.

“Costs have skyrocketed in the past couple of years, but the real challenge is that, at least in Hindi, we’re paying for music that is a complete washout. Plus, the music rights are sold way early, right when the movie goes on floors, and only the main cast and crew are in place, so we’re taking a huge risk in terms of quality," said a senior executive at a music label declining to be named. The person added that the music rights of a big tentpole Bollywood film today are sufficient to fund the entire production cost of a small-budget, non-star vehicle. But the more serious issue is that labels are paying more for fewer songs and more compact soundtracks as Hindi films have given up the template of full-fledged musicals with six or more songs. Even a blockbuster like Pathaan released this January only had two tracks. “The south is following the same trend, as their films gain pan-India popularity, competition is rising with national labels also trying to acquire southern music," the person added.

The music industry is highly competitive, and music labels often have no choice but to secure the rights to film music to remain relevant, Neeraj Kalyan, president of T-Series, pointed out. “It’s a known fact that film music still controls the majority mind share in India. However, not every top-rated film can guarantee a musical hit, and thus the ever-increasing costs of film music are a huge disadvantage to the struggling recorded music industry, which on one end, is being hammered by online piracy and, on the other hand, finding it hard to make ends meet due increasing cost of content acquisition," Kalyan said. This unabated rise in the cost of commercial film music may lead to a situation where labels may be less willing to take risks on film music and may be more inclined to invest in mainstream non-film singles that will lower risks and may have a higher probability of profitability. “The current high costs are just not sustainable for music labels. Music rights are usually the first rights to be sold by a film producer, which gives first fund in-flow into a film project, and if music labels continue to incur losses on film music, it will definitely impact the entire creative and filmmaking ecosystem in the long run," Kalyan said. The cost of production of films has risen in the past couple of years, and producers want to secure projects by selling rights such as satellite, digital and music, said producer Vinod Bhanushali, former president of media, marketing, publishing (TV) and music acquisitions, T-Series. “But labels are no longer dependent only on film music with the rise in the independent and pop scene. Everyone is brainstorming on where their money should go," Bhanushali pointed out.

Further, while the digital era has opened up more monetisation opportunities, subscriptions haven’t taken off for audio streaming services. Shahir Muneer, founder and director of Divo, a Chennai-based media and music company, said revenue, in fact, may have even reduced by 10-20% for a few service providers as they roll out subscription tiers and do away with free, ad-driven offerings. “Smaller and medium labels are facing the heat and will not be able to compete with these prices. There will be a market correction eventually, but we will have to see when this happens as in the immediate future, there seem to be no signs of things slowing down," Muneer said.