Indian music gets 10% revenue from caller tunes abroad

The category is growing slowly as Indian film content and music become popular in emerging markets like Africa, Afghanistan, Malaysia and Bangladesh

Just as Indian films have started making their presence felt on the foreign box office, Indian film content and music is catching on among mobile subscribers of international telecom operators.

The Indian music sector earns eight-10 per cent of its revenue by providing content to global telecom companies. A FICCI-KPMG media and entertainment report pegs the Indian music sector at Rs 960 crore.

The category is growing slowly as Indian film content and music becomes popular abroad and telecom companies show interest in emerging markets like Africa, Afghanistan, Malaysia and Bangladesh.

Neeraj Roy, managing director and chief executive, Hungama Digital Media, which has 90 per cent of the international digital (mobile value-added services included) market, said, “The interest in Indian, not only Bollywood but regional cinema as well, film and music content is growing as economic corridors are formed between countries.”

Hungama provides Indian film content to 47 countries through partnerships with telecom companies like Roshan Telecom in Afghanistan, SingTel in Singapore, Rogers Communications in Canada and Verizon Communications in the US.

Roy added the demand for the content is governed by the popularity of celebrities and the size of the Indian expatriate population. So, Canada and the UK see a lot of Punjabi music from India while Malaysia is a strong market for Tamil and Telegu film content and music.

For Roshan Telecom, the biggest telecom provider in Afghanistan that recently took its operations to Uganda, Tanzania and Burundi, the most of 300,000 downloads are for Bollywood songs.

The US and the UK, where Shah Rukh Khan and Salman Khan are celebrities, import film content from India.

“The main driver for mobile VAS revenues for music and film content is the caller tunes service. This feature is popular in South Asian countries and hence we see traction in markets like Bangladesh. Caller tunes as a business is picking up in the US and UK as well,” says Hari Nair, head of digital, Sony Music India. Sony Music is second only to T-Series in terms of its film music library and has a strong digital distribution abroad. It is present in 60 countries individually and through partners, delivering Indian film music and content via mobile VAS.

One of the hurdles faced in increasing revenues from international mobile VAS is the limited presence of the caller tunes service. Not more than 25 per cent of telecom territories globally have this.

“There is a lot more that can be done. There needs to be far more coordination between studios and broadcasters to synchronise promotions for mobile VAS and digital services in the international market to cater to the large and affluent South Asian community globally,” says Roy.

While new markets are emerging like Africa, Afghanistan and Bangladesh, hurdles have to be passed if a significant contribution has to come from international mobile VAS.

The biggest player in the Indian music market, T-Series, is bullish on emerging markets. However, these markets lack depth. Neeraj Kalyan, head of digital, said, “India saw a transition from physical consumption to mobile consumption of music. A similar thing is seen in Africa and Afghanistan, where the telecom companies are expanding their mobile services and Indian films are popular. But it will take a while before these can be significant.”

“The real task at hand for the Indian music sector is to set a goal of $1 billion in annual revenues that we can achieve in a decade,” said Kalyan.

He added iTunes, Hungama.com, T-series.com and Ovi, are playing an important role in the paid music ecosystem. Streaming services Saavn and Gaana offer free music, dependent on advertising. This space will see churn later this year when Google Play and Spotify extend their services to the Indian subcontinent.

Kalyan said the mantra was to be present across digital platforms, making mobile VAS a crucial focal point. Nair added, “You see the music streaming platforms that are doing well are those present on mobile and connected net devices. This will be very important if the business has to grow.”
HIGH VOLUME

• 47 countries get Indian film content from Hungama Digital Media
• 25% of telecom territories have the  caller tunes service. This is seen as a hurdle to increase revenues
• Rs 960-cr Size of the Indian music sector, by a FICCI-KPMG report