The litigation by the Indian music industry, wherein it got 104 music sites blocked, appears to have helped the Indian music industry. Speaking at the Nokia Music Connects conference, Sridhar Subramanium, President, India and Middle East, Sony Music India said that in India, most piracy is now from web streaming, because downloads were blocked via litigation. “The downside is that there is tremendous BitTorrent p2p increase on the back of this. This is from 70-80 million users, and if this (India’s Internet base) goes up to half a billion Internet users in India, then this will be worrying.”
Fining ISPs helps?
“In the west, they seem to have arrested piracy. Some key markets have been able to fine ISP’s, Piratebay and megaupload have been shut down. By market, the western markets, 25-30% of Internet users are accessing piracy sites, but in Asia, it’s around 50-55%. The impact that India will have will increase once people move from the closed ecosystem of mobile operators to the web.”
VAS Impact & The Future
“There are deep structural changes taking place. The VAS dependence, used to contribute 80% of digital revenues, we’ve seen an impact of that, with a dramatic impact on ringback tones.”
“On the digital business: there’s a big decline this year. It will be flat next year, and growth the year after that. Most of it is being driven by smart phones and Interent. We will see labels and service providers will come in with niche products, and move away from licensing and wanting to participate in an aggressive and dynamic way. The first is on the streaming side, and we’re moving people from pirate sites to ad supported sites, to move to a paid model. The industry has thrived on the fact that people were paying Rs 30 month on month, with 100 million paying subscribers, even with single digit revenue shares (for labels). The challenge is to get these people to move to a paid model: offering pricing flexibility, features, porting, and most people accessing on the phone. We have to find a solution:”
“We need to be more collaborative, seek independent platforms, and reasonable licensing terms. The good part is, that if you see International labels, in India, we have been flexible, in terms of India pricing.
On the soundtrack (Bollywood) side, this business is here to stay. Despite the success of social media and boom in Independent music, 65% of the revenue still comes from soundtrack music.”
“The copyright act (amendment) and the deep implications of that have not been seen yet. The impact will probably come out of it in the next year. We’ve been playing the role of an intermediary between creators and distributors. The techtonic shift is about getting close to the artists or the consumer. Both of these things will happen.
The copyright act is progressive and the government has stated its intent. It creates a new class of rights that can be monetized. In the rest of the world, it’s a pretty big chunk of the business. The second thing it does is that it allows business to monetize via the broadcaster and public performances. There will be issues around interpretation, and the industry is looking to arrive at creation of (copyright) societies, settlement with government. We can see a 10 fold increase from the societies.
Where the government has failed in content policy. The global distribution platforms allow us to reach the diaspora and everyone else. We are seeing pickup in services like spotify. Just in the neigboring markets, we are seeing lack of traction. Pakistan can double our bollywood market. There is immediate market development that can be done.”
Music & Bollywood
The music industry contributes $100 million in terms of investment in soundtracks (Bollywood), and the production cost of the Bollywood business is growing. So is the music industry going to stay relevant to Bollywood? Big studios are trying to fracture rights, and part only with a part of the rights.
Pop Music in India
In terms of pop, every 10 years, the industry makes a pass at this. Right now, we’re seeing a resurgence of a number of things: the key driver is social media, the access to their audience, that brings raw talent visibility. There are a number of great signs of this. One thing that is missing is pure play A&R. There is not one hit song that has come from these people yet. The industry has to get these people, and not just make stars, but create hit music. Hits + stars is what this business is about.
We need to stay positive, and bring in new talent, bringing newer blood into the industry, younger people who match our demographic. There’s a bit of an extortioist licensing policy right now.