The FICCI KPMG media and entertainment report pegs the music industry at around Rs 960 crore.
The category is growing slowly as Indian film content and music becomes popular overseas and telcos in emerging markets like Africa, Afghanistan, Malaysia and Bangladesh just to name a few.
Neeraj Roy, MD and CEO, Hungama Digital Media, which has almost 90% of the international digital (mobile VAS included) market, says, "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 various telcos like Roshan Telecom in Afghanistan, Singtel in Singapore, Rogers in Canada and Verizon in the United States.
Roy adds that the popularity of the content is governed by the popularity of celebrities and the constitution of the Indian expat population. So, countries like Canada and UK see a lot of import of Punjabi music from India thanks to the large Punjabi population while Malaysia, which has more than a million Tamil speaking individuals, is a strong market for Tamil and Telegu film content and music.
In case of Roshan Telecom, which is the biggest telecom provider in Afghanistan and recently took its operations to Africa (in Uganda, Tanzania and Burundi), maximum number of the 300,000 downloads via VAS come from Bollywood song downloads and/or streaming. Other countries like US and UK, where celebrities such as Shah Rukh Khan and Salman Khan are favourites, also see a lot of export of film content from India.
"The main driver for mobile VAS revenues for music and film content is the CRBT service. This VAS feature is popular in the South Asian countries and hence we see traction in markets like Bangladesh. Caller ring back tunes (CRBT) as a business is picking up in the US/ UK as well, but the size is not as much as India," says Hari Nair, Head of Digital, Sony Music India. Sony Music is currently second only to T-series in terms of Indian film music library and has a strong digital distribution play overseas. It is present in 60 countries (individually and through partners) delivering Indian film music and content via mobile VAS.
In fact, one of the hurdles faced in increasing the revenues from international mobile VAS is the limited presence of the CRBT services globally. Estimates reveal that not more than 25 per cent of the telecom territories globally have this service.
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The music industry is also grappling with the issue of organisation while exporting content to international telecoms. As Roy puts it, "There is a lot more that can be done. There needs to be far more coordination between studios and broadcasters to sync promotions for mobile VAS and digital services in the international market to cater to the large and affluent South Asian community globally."
While new markets are emerging like African countries, Afghanistan and Bangladesh on the back of smartphone penetration and the growth of local telcos in these territories, there are hurdles to be surpassed if significant contribution has to come from international mobile VAS.
The biggest player in the Indian music market, T-series, is also bullish on emerging markets. However, these markets lack in terms of volumes. Neeraj Kalyan, head of digital, T-series says, "India saw transition from physical consumption to mobile consumption of music. A similar thing is seen in Africa and Afghanistan where the telecos are expanding their mobile services and Indian films are popular. But the volumes are missing and it will take a while before they can be significant."
With proliferation of smart devices and internet penetration, the digital and online consumption is steadily increasing in the country, which today stands at second largest internet user base in the world. "The real task at hand for the Indian music industry is how to grow the music business and set a real goal of a billion dollars in annual revenues to the music industry that we can achieve in the next decade," feels Kalyan.
He adds that the proliferation of legitimate internet platforms such as iTunes, Hungama.com, T-series.com and Ovi etc., which are offering licensed content for downloads to the consumers, are playing an important role in seeding the paid music eco-system. Other music streaming services namely SAAVN, Gaana etc, although licensed by the music industry, are offering free legitimate music to the consumers but are solely dependent on ad supported revenue models, however, this space will see lot of action and churn later this year when global giants like Google Play, Spotify and few other international players extend their services to Indian sub-continent.
Kalyan concludes by pointing out that the mantra is to be present across digital platforms, making mobile VAS a crucial focal point. Nair adds, "You see the music streaming platforms that are doing well are those present on mobile and connected internet devices. This will be very important, if the business has to grow."
Music Industry size: Rs 960 crore
Contribution from various streams:
Physical sales - 10%
Mobile VAS - 40%; (around 10-15% of this comes from overseas mobile VAS revenues)
Internet (ex-mobile internet) - 25%
Broadcast (radio and TV) - 25%