Thank you for the music

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Thank you for the music

Friday, 15 February 2019 | Team Viva

Thank you for the music

When Abba recorded this song, little did they know that OTT platforms would rule the roost. Now Indians are beating world averages while listening to music online, says a survey

If a recent survey is anything to go by, then we will be clued into music on the move or in our mindsphere most of our waking hours. “India is a music-loving society with consumers spending almost 21.5 hours every week listening to melodies and songs against the global average of 17.8 hours. Helping to satisfy this love for music is the audio OTT (over-the-top) industry which is at an inflection point today,” said Blaise Fernandes, President and CEO, The Indian Music Industry (IMI).

According to a report by Indian Music Industry (IMI) and Deloitte, the Indian audio OTT industry is valued at $280 million with revenues from it  contributing to 67 per cent of the total recorded music revenue in India. Audio OTT includes delivery of digital music content over the internet to the consumer by independently hosted applications that procure content from music labels, publishers and other distributors. Digital music revenues as a percentage of Indian music industry revenues have shown steady growth from 51 per cent  in 2013 to 78 per cent in 2017.

The launch of various Indian audio OTT platforms like JioSavaan, Gaana, Hungama, Wynk and Vodafone-Idea, as well as international platforms like Apple Music, Amazon Music, Google Play and the impending arrival of Spotify offer immense potential for the growth of the audio OTT industry not just in India but in south Asia as a whole.

“If a Despacito can become a hit in India, if K-Pop can cross geographical boundaries, then the scope for music from India is infinite, with different regional languages poised to dominate local and international markets driven by the reach of  audio OTT platforms,” said Fernandes.

The report also highlights the contribution of the recorded music industry to the growth of audio OTT platforms with all major stakeholders, from lyricists, music composers, performers to film producers, actively creating for and licensing content to the digital platforms to boost music consumption, further driving the growth for music streaming services. The expected growth in smartphone users to 829 million in 2022 from just 404 million at the end of 2017, highlights a digital revolution, where an increasing number of people will shift to digital platforms to consume music.

As at the end of December 2018, there were nearly 150 million music streaming users in India, while seemingly large are numbers make for the online video audience. This indicates a significant growth opportunity with audio OTT platforms emerging as the preferred medium to consume music in the country, and the audio OTT market valued at over US $280 million in January 2018, poised to show strong growth in the next few years.

The writing is already on the wall with physical sales of CDs showing a steep drop from 35.5 million in 2013 to 0.4 million units in 2017. Audio OTT platforms will be a key driver of growth in the future – digital revenue has already shown an increase from $74.4 million in 2016 to US $102.1 million in 2017.

The report also examines the implications of piracy with $250 million lost each year on account of it. It evaluates the anti-piracy measures in India by music labels, regulatory bodies, government and other stakeholders to curb this major source of money leakage. India’s recent approval for accession and ratification of World Intellectual Property Organisation’s (WIPO) internet treaties to protect the intellectual property rights of artists and content owners reflects the level of IPR awareness in the country. It examines successful initiatives in countries like China to curbs piracy and encourage more users to subscribe.

FDI and FII represent major sources of investment for the audio OTT industry in India, with investors like Tencent, Tiger Global, Liberty Media, and Xiaomi investing over $300 million in the audio OTT industry.

The report also examines the various challenges faced including piracy. There is a need for free-market licensing norms to help sustain the digital ecosystem, where content owners and creators are sufficiently remunerated, in order to sustain and encourage investments in content. It is then that India can take a major position in the global recorded music space.

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