The Indian music industry has been following worldwide trends in music. Globally, for instance, the music industry has been shrinking over the past few years. Physical sales are down as downloadable digital music makes it easy to replicate tunes. Piracy is rampant, dealing a double blow to the industry.

In the sub-continent, if the Indian music industry is worth Rs 600 crore, there?s a matching amount of piracy going on, if not more. However, music consumption has never been higher in India and all the major players are now doing their best and more, from promoting local talent to jazzing up packaging to ensure that sales pick up.

?The good news is that people are willing to spend on music,? says Atul Churamani, vice-president, Sa Re Ga Ma India. ?That?s what makes me bullish about the

Indian music industry. It will grow substantially in the next two to three years,? he adds.

This is just the sort of enthusiasm that the industry is waiting for, from audiences. Although it is difficult to estimate the size of the Indian music industry?according to the watchdog body Indian Music Industry (IMI), and Pricewaterhouse Coopers, the size of the Indian music industry is estimated to be Rs 670 crore and is expected to rise to Rs 777 crore by 2009.

?The Indian music industry is getting used to single digit growth figures,? says Rajat Kakkar, MD, Universal Music India. ?There?s been a rapid fall in the past three years, now the Indian music industry is growing,? says T Suresh, GM, EMI.

With consumption increasing, there?s light at the end of the tunnel. ?The consumption of music is at an all-time high. Every kid you see has something stuck to his or her ear, but the problem is that music is not being monetised properly,? says Suresh, while adding, ?We need better collections.? The need of the hour, say all the players that FE spoke to, is stringent anti-piracy laws and their enforcement, awareness about copyright and ownership issues and a better mechanism to monetise it.

?Every FM station, restaurant, discotheque and telecom service provider is blaring out music. We need to ensure we get the rightful share of revenues,? points out Suresh. Revenue is definitely on everyone?s mind. ?To ensure that the music industry gets back on its feet,? says Mandar Gupte, CFO, Universal Music India, ?monetisation must improve?.

Mobile music consumption is going up, thanks to ringtones and caller tunes, but, according to music industry officials, telecom service providers pocket 75% of the revenues, offering music companies, the original makers, only 20-25% of the collections.

According to a recent AT Kearney report, the revenue share is too skewed towards service providers. ?This needs to be more equitable to the content owners.?

On its part, the music industry, admit insiders, must understand that there?s a rapid shift to the digital version and adjust to the changing scenario. ?The music industry must accept that physical formal sales in the form of CDs are down and will slip further quite dramatically,? says an analyst.

?Physical sales will drop by 15-20%,? says Churamani. ?Even the digital ringtone market has shrunk, though ringback tunes have grown,? he adds. ?Digital and other sources of income are beginning to grow,? says Suresh. But what?s killing the music industry is piracy. Most of the players admit that at least 75% of the market runs on piracy, and this adds up to a huge loss for the industry.

According to estimates, India, last year, sold 15 crore units of legitimate unit sales of music cassettes and CDs. According to IMI estimates, piracy will continue to hamper the growth of the industry, although the measures taken by the Indian music industry such as spreading awareness of copyright and anti-piracy laws as well as making people aware of monetising revenue will help curb loss in earnings. On a conservative estimate, the music industry has been pegged to grow at 3% over the next five years.

Ask the players for a perk-up pill for the industry and they all point out that one of the paths forward is to concentrate on non-film music.

Traditionally, the Indian music industry has been driven by film music. But, according to the AT Kearney report, music rights for a movie from the top production houses that used to be between Rs 3 crore and Rs 5 crore in the late 90s, dropped to less than a crore in 2004-05.

With Bollywood music now being labelled as ?high risk?, most of the players are aggressively promoting non-film music. ?We are keen on promoting new artists, international music and non-film music,? says Kakkar of Universal.

The company has not invested in film music for the past two years. EMI?s Suresh says the company has started a new business line?getting into artist management?to augment growth. ?We are not getting into mainstream Bollywood but focusing on developing local talent,? he adds.

?The top selling soundtrack of a film does not even sell 5,00,000 units,? points out Churamani, who says Sa Re Ga Ma is focusing on classical music, ghazals and recording domestic bands playing jazz.

?We are encouraging all kinds of original music,? adds Churamani. Sa Re Ga Ma is also putting the infrastructure in place to exploit its ?deep catalogue? in the digital space.

Ask the players how the music industry can get back to double-digit growth and they quip: ?We need a 360-degree approach.? Explains Churamani: ?We need to look at growth from all sides. Since physical sales are dropping, we need to update our infrastructure and quickly get into digital mode. We need to market non-film music better. We need to look at all the channels selling music, including FM radio stations, and get back our money?s worth. We need to search for the right revenue model.?

The packaging is important, so is display. ?Since one cannot recover investments from sale of CDs, we need to innovate. At EMI, we are also looking at revenues from live performances and other channels,? says Suresh.

A relook at old ways of doing things may be the key. ?The music industry needs to reinvent business models,? offers an analyst. With the Indian music industry dependent on Hindi films for at least 40% of its revenues, experts say both the film and music industries should work together to stem piracy, that?s eating into both their bottomlines.