This month we finally got a spot of good news from the Indian Music Industry, by which I’m referring not to the country’s entire music making fraternity but the trade body, also known as the IMI, which represents the interests of over 200 of the nation’s record labels. On World Music Day, which was celebrated on 21 June, the IMI unveiled India’s first official music chart, which somewhat ironically is a top 20 that ranks the most popular international singles in our country based on streams from three foreign services — Spotify, Apple Music and Amazon Prime Music.
The IMI says the international chart is the first step towards the eventual publication of an all-genre chart, which will also take into account plays from domestic DSPs and has been in the works for almost four years now. For the IMI, the launch of an official chart — any chart — makes India look more like a legitimate music market and one that can be taken seriously in the eyes of the rest of the world. As such, the arrival of its International Top 20 Singles survey is cause for celebration in a year-and-a-half during which there has been little to celebrate.
In the last week of March, two annual gauges of how India’s music industry performed in 2020 were released, the International Federation of the Phonographic Industry (IFPI)’s Global Music Report (GMR) and the EY and the Federation of Indian Chambers of Commerce & Industry (FICCI)’s report on Media and Entertainment. Both showed that the size of our recorded music market remained pretty much the same. In other words, there was zero growth. Or if you like to see the glass half full instead of half empty, it did not shrink despite the pandemic.
According to the IFPI’s GMR, India was the 17th largest market in the world, with recorded music revenues of $180 million. This figure represented a growth of nearly 4.9 percent, even though last year, the corresponding figure was slightly higher at $181.4 million. The discrepancy is because the IFPI recalculates the previous years’ numbers based on the changing US dollar exchange rate. If we convert those dollar amounts for 2019 and 2020 using the rates referenced in the respective yearly reports, then we’d find that the value of our record industry rose 4.3 percent from Rs 1,277.6 crore to Rs 1,332.9 crore.
In terms of ranking however, we fell two spots from No.15 in 2019, because other countries performed relatively better than us (or maybe that should say: we did relatively worse). Unsurprisingly, the pandemic thwarted the IMI’s mission to make India one of the world’s top 10 music markets by 2022.
As per EY, the music industry “remained stable” at Rs 1,530 crore, which was level with 2019. Despite the stagnancy, their report expects the sector to grow at a compounded annual rate (CAGR) of 15 percent to Rs 2,320 crore by 2023. Those projections, made before the devastating second wave of the pandemic, could already be outdated.
Unlike the GMR, which breaks down the recorded music industry’s income into segments such as streaming, “other digital”, physical, performance rights and synchronisation, the EY report doesn’t specify how it arrives at these sums. Significantly, the GMR tells us that streaming now accounts for a whopping 85 percent of India’s music revenues. Unsurprisingly, in a year when bars, restaurants and shops were shut for several months, earnings from public performance and physical products dropped a drastic 75 percent and 67 percent respectively.
We’ve been told before that listenership on streaming has been growing consistently, especially during periods of lockdown. What has remained the same though is that the majority of people are using music streaming services for free, which is why revenues from ad-supported listening continues to outpace that from subscriptions in India.
What does the future hold? The ideal solution, music executives seem to agree, is getting more people to pay for the music, which seems unlikely at a time when many folks are struggling financially. What the suits don’t always agree on is what the ideal price point should be to convert users into subscribers. India already has some of the cheapest subscription plans in the world and reducing them further would go against a recent worldwide increase in tariffs in many developed countries.
Some feel tailor-made tiered plans are the way to go. At a webinar organised by the Indian Performing Rights Society earlier this year, industry veteran Atul Churamani, said, “Today, the store wants to drive the price down. The model needs to change. I don’t listen to American hip-hop and Indian classical music, why is it included in my subscription? You have to start breaking it down by genre or [have] all catalogue [releases] included in your subscription and all new releases paid for separately.”
To be fair, streaming services are already tweaking the model. Gaana, JioSaavn and Spotify have each started selling “mini” subscriptions that allow customers to pick and choose between specific features for a lower cost. In an interview I did for UK-based music business publication Music Ally, Gustav Gyllenhammar, the vice president of markets and subscriber growth at Spotify’s HQ, told me, “What we thought was a global advantage for many consumers [when] saying we have 50 million songs, you can download all of them [didn’t work]. The Indian consumer directly says, I only need 25 songs, why should I pay for 50 million?”
The sachet-isation seems to be working. Spotify’s conversion rate in India is now “better” than the national average of a single digit percentage, said Gyllenhammar. Gaana says paid subscriptions have grown by “almost one-third in the past 12 months” after splitting the offerings into options such as ad-free streaming or HD quality audio and a limited number of downloads, and are now “around 10 percent” of the user base. Similarly, JioSaavn recently stated that the number of paid customers quadrupled since February 2020 and the unbundling of its Pro plans into those for just ad-free plays or only unlimited JioTunes (caller ring back tones). Notably, none of these platforms has ever declared their absolute subscriber numbers.
Tarsame Mittal, the founder of entertainment conglomerate TM Ventures and the organiser of the annual All About Music conference, believes the only way to get Indian customers to understand the value of music is an industry-wide campaign wherein musicians rather than labels or DSPs appeal to listeners. But in India, the effectiveness of such a campaign would depend on mainstream artists with mass appeal. And they might be less inclined to participate when they barely make any money from streaming because of their lopsided contracts.
For now, hopes are pinned on getting to the stage when a large enough percentage of the population is vaccinated for people to feel safe enough to visit cinemas and attend concerts again. When big-budget films return to the big screen, so will the listenership of their soundtracks. In the long term, our industry needs to mature to the point where labels start trusting artists’ ability to draw listeners on the strength of their music alone, and fans start feeling that it’s worth shelling out the price of a single multiplex movie ticket for an annual subscription to a streaming service.
Amit Gurbaxani is a Mumbai-based journalist who has been writing about music, specifically the country's independent scene, for nearly two decades. He tweets @TheGroovebox
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