Even as physical sales decrease at an alarming rate, mirroring a worldwide trend, music companies are exploring new avenues of selling music. Think mobile downloads or the internet. In India, the industry?s dependence on film music is high, which has hindered growth possibilities in regional music, live music or even non-film music. To top it all, piracy is an unmanageable menace. Shridhar Subramaniam, MD, Sony Music, explains to Sudipta Datta why the music industry is in a crisis and what it needs to do to grow. Excerpts:
Have acquisition and development of music costs softened as was expected? Are you going slow on acquisitions or has the market picked up?
Prices have started softening and have come down substantially for smaller projects. However, for the big marquee projects, the prices are yet to materially soften. This phenomenon is only in the Hindi market. In South Indian languages, prices are still climbing and don?t show any signs of slowing down. We are continuing our acquisitions and will be growing our market share this year. We try and assess the projects for the musical content, do a select number of projects every year, maintain and build long-term relationships with ?musical? production houses, like Karan Johar?s Dharma Productions and the Bhatts of Vishesh Films.
Are we seeing a regime of fewer and better products? Where do you see growth coming from, film or non-film music?
I don?t think the flow will dry up or reduce significantly. The projects will become more economically sensible and viable. The froth has settled.
Films will continue to be driver. However, I see regional language music growing substantially over the next few years.
The music industry?s biggest challenge has been lack of monetisation. Which are the platforms of music that are growing? Are physical sales still down?
Physical sales continue to decline at an alarming rate of around 20% year on year. Mobile growth seems to have reached a plateau. Despite the large increases in cell phone subscribers, the only meaningful music service seems to be the ringtone market. Our revenue share rate with the telecom company is as low as 6-7% on this service and it is a challenge to increase our share as well as consumer base. At the same time, we have to start developing alternative mechanisms to deliver full tracks to consumers on their phones.
Another growth area that the industry is working on developing is the public performance revenues. This requires awareness amongst establishments, event organisers and other outlets. This is manpower-intensive and geographically challenging, but can grow at almost 50% every year.
How much has income from issuing licences to establishments and venues increased? Is enforcement still an issue?
This is increasing at around 40-50% year on year from a low base, but has the potential to grow to become almost a third of the total music industry.
How big a problem is piracy?
This continues to be a menace. With each advance in technology, there are newer ways to get music for free. Be it from the local pirated CD, to free internet downloads, to mobile chips being loaded with music.
Give us a glimpse of your library?
Our local library has been carefully built over the last decade; it is small but precious. All of these are digitised and deployed globally on all the platforms ? internet and mobile.
What are the areas the music industry should look at for growth?
Clearly, the growth will come from digital music ? mobile and internet. And there?s growth in performance income.
Do you think there is an over-dependence on Bollywood?
Yes. Unfortunately, we as an industry, along with the media (radio and TV), have not done a good job of developing the non-film market. However, we are seeing a growth in the niche and high-end segment of English and fusion rock bands, as there are now venues like Hard Rock Caf?, Bluefrog etc where they can perform and develop fans. As this trend increases, we will see a renewed attempt in this category.
In a meltdown year like 2009, what growth has the music industry seen?
There has been no growth area in 2009.
What is in store this year? What are the trends you are noticing in the music industry?
For 2010, we see prices softening, we see fewer active players, we will also see some conflicts and attempts to increase content valuations in the mobile space.
But there are a lot of opportunities in the regional music, live music and talent management.
