Apurv Nagpal is the Managing Director of Saregama India, one of India’s largest music labels. Saregama has its own online store at Saregama.com, and it recently acquired a 10% equity stake in Timbre Media, for launching music services cross platform – including on DTH, the Internet and mobile. MediaNama spoke with Nagpal on the investment, physical versus digital music, government policy, online music piracy, legal maneuvers, ISP liability, among other things. Part 1 of this interview:
MediaNama: Why did you invest in Timbre Media?
Apurv Nagpal: We have been looking at various options for gearing up with our digital presence. There are several moves under way right now as we speak. Timbre Media came along and we had several chats with them. I think the WorldSpace brand had managed to establish a clear clientele, despite its cumbersome mode of delivery and high subscription fee. It was clearly something that the programming team there had managed to achieve. We sensed an opportunity to take our catalog where it had not gone before.
What we did agree upon and what we are implementing is that we are going to do delivery via the Internet, the DTH channels, and mobile Radio, and other options. no longer will the consumer have to go and buy a device to listen to WorldSpace and their channels.
MediaNama:But Worldspace was as much about the quality of the sound as the programming.
Apurv Nagpal: Why do you say that? Because they sold you a boom box. My point here is that today you can have a better boom box which allows you to do that. The quality of sound is dependent on when you want and what you want. For example, the MP3 is an inferior sound than a WAV, but because of reasons of convenience, the world prefers to listen more to MP3 than a WAV. Lets leave it to the consumer to decide to listen to what he wants. For me it is pretty clear that we want to take Saregama’s catalog, and make it available to you in any way or form. It’s a great partnership – they have our catalog to play with, and we have their programming expertise to go to various operators with.
MediaNama:Typically catalog deals in the digital space are done on the basis a minimum guarantees. Is this stake in lieu of providing your providing your catalog to them?
Apurv Nagpal: That is confidential. How and the terms of the stake are completely between us.
MediaNama:Are you investing cash at all?
Apurv Nagpal: I’m not discussing the stake or the deal itself.
MediaNama:What are your core targets in terms of the platform launches – where will you go first?
Apurv Nagpal: The biggest platform that we go to is mobile. As a consumer, I believe that the laptop and the computer will get outdated soon as the mobile continues to grow as the devices improve and bandwidth continues to increase. The priority is clearly the mobile, whether the handset or the telecom operator, or even the Internet delivering on the mobile. We’re looking to see how all our properties can adapt to that arena.
MediaNama:How much does mobile contribute as a part of your music revenues? A majority of PPLs revenues are mobile and digital.
Apurv Nagpal: That is true for us as well. In the non physical space, the bulk is through mobile, and the non physical is bigger than digital. Non physical includes broadcast too.
MediaNama:How’s the situation panning out in terms of compulsory licensing on FM?
Apurv Nagpal: I think there are various cases under way right now. At last count, I counted at least 8-10 court cases around this topic of compulsory licensing or 2% royalty. Against IPRS, there have been a couple of victories by the broadcasters. I think these are cases that are being fought. IPRS is going to go back and appeal, and it will be a long time before the dust settles on that. Defnitely compulsory licensing is something I am principly against.
MediaNama: Could you elaborate on that?
Apurv Nagpal: Nothing forces an artist to display his painting to the public. Nothing forces someone who has purchased the painting from an artist to display the painting to the public. Nothing forces an author to make sure that his book is scripted and nobody tells a publisher that you must sell your book at a price to be decided by the copyright board, or that it must at least X copies. If for all these other works of art, it is okay for it to be decided by an individual or creator or the person who owns the copyright, why should there be an exception for music?
MediaNama:How do you think this (compulsory licensing) will impact the FM Phase 3 auctions?
Apurv Nagpal: It (the FM Station) is a profit making body, and we have to come and talk and agree certain numbers. Sometimes, as is the case with telcos and CRBT, the share given to music companies is abysmally low, and it is completely unfair. It against precedent all over the world. But you dont see me filing a court case against Airtel for that or go to TRAI or the Ministry of Telecom saying look guys solve this for us. I treat it as a discussion between two mature adults and profit making bodies. I don’t think the government has a role to play, and the government should focus on other issues. I really don’t understand why the government is stepping into this arena.
MediaNama:The government might be stepping into this arena because hypothetically it impacts the returns it could get from the FM Radio Phase 3 Auctions…
Apurv Nagpal: By that logic it can impact the entire entertainment industry. According to me, they have to realize that they are selling the license at a particular price, which is putting a huge burden on the radio stations, and obviously the cost comes into this domain. Why should any other party get penalized and forced to sell at a certain rate when they are themselves looking to gain more and more money out of this. It’s like saying that I’m going to get as high a license fee as I can get my hands on, but you must give them a discount.
MediaNama:Would you bid for an FM Radio auction?
Apurv Nagpal: Depends on the price. In Phase 3, I don’t think I’m going to bid, and there is no plan yet.
MediaNama:How do you view the role of aggregators in the mobile value chain?
Apurv Nagpal: We currently aggregate through PPL primarily, and one more internationally which is non-exclusive. PPL was exclusive, but from PPL in the last 6-9 months we have taken back some things back. For example, we’ve taken web streaming, WAP and embedding on devices back.
We are building a team and looking to do things ourselves. I think one thing I’ve realized – and this has happened over the last year or so – is that what we present or have within us is an unmatched knowledge of our catalog. Whenever someone wants something, we’re able to come up with an answer much quicker. When it is through an aggregator, there is a transmission loss. Yes, we are looking at increasingly doing things ourselves. However, the mobile and CRBT platform still rests with PPL, and we do use an aggegator which is non exclusive.
MediaNama:Typically this space has evolved around minimum guarantees
Apurv Nagpal: That is not true at all. I can tell you several deals by many aggregators where not everything is a minimum guarantee.
MediaNama:How do you view that aggregator model?
Apurv Nagpal: With PPL there is a degree of comfort since we are one of the founder memebers and sit on the board. With anybody else, for WAP or streaming or anything, we would be looking at a minimum guarantee.
MediaNama:Well, I was wondering about the health of the industry that is reliant on the minimum guarantee model..
Apurv Nagpal: If there is one thing that I can tell you about the industry, and this is different from FMCG, is that every deal is different. We cannot have a standard contract and standard way of operating because there are different considerations. We don’t have a one size fits all approach.