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Economic Impact of the Recorded Music Industry in India September 2019

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Economic Impact of the Recorded Music Industry in India September 2019 Economic impact of the recorded music industry in India September 2019 Economic impact of the recorded music industry in India Contents Foreword by IMI 04 Foreword by Deloitte India 05 Glossary 06 Executive summary 08 Indian recorded music industry: Size and growth 11 Indian music’s place in the world: Punching below its weight 13 An introduction to economic impact: The amplification effect 14 Indian recorded music industry: First order impact 17 “Formal” partner industries: Powered by music 18 TV broadcasting 18 FM radio 20 Live events 21 Films 22 Audio streaming OTT 24 Summary of impact at formal partner industries 25 Informal usage of music: The invisible hand 26 A peek into brass bands 27 Typical brass band structure 28 Revenue model 28 A glimpse into the lives of band members 30 Challenges faced by brass bands 31 Deep connection with music 31 Impact beyond the numbers: Counts, but cannot be counted 32 Challenges faced by the industry: Hurdles to growth 35 Way forward: Laying the foundation for growth 40 Conclusive remarks: Unlocking the amplification effect of music 45 Acknowledgements 48 03 Economic impact of the recorded music industry in India Foreword by IMI CIRCA 2019: the story of the recorded Nusrat Fateh Ali-Khan, Noor Jehan, Abida “I know you may not music industry would be that of David Parveen, Runa Laila, and, of course, the powering Goliath. The supercharged INR iconic Radio Ceylon. Shifts in technology neglect me, but it may 1,068 crore recorded music industry in and outdated legislation have meant be too late by the time India provides high-octane: that the recorded music industries in a. Fuel for the INR 3,130 crore private FM most neighbouring countries barely exist you act“ radio broadcast industry today. Ghalib b. Content for the INR 6,500 crore live events industry Despite all odds the recorded music c. Raw material for very popular music industry in India has survived this trying and talent shows alongside backdrop period, economically powering the media scores (TV serials) for the INR 74,000 and entertainment ecosystem, as well crore TV broadcast industry as contributing to employment in the d. Fuel for the INR 17,500 crore feature informal sector, preserving India’s rich film industry on a pan-India basis, cultural heritage, and driving the vehicle providing funding through purchase of soft power. It is imperative that its of audio rights economic contribution is acknowledged, e. Unicorns in the audio OTT space and legislation issues, such as statutory licensing, are suitably addressed to When IMI embarked on drafting this enable the recorded music industry in report, the first of its kind for the India to keep churning out more hits. recorded music industry in India, the objective was not only to highlight its economic contribution, but also to throw light on the lopsided revenues Blaise Fernandes returned to the recorded music industry, President and CEO driven by legislation that may not be The Indian Music Industry (IMI) relevant in today’s times. If one takes a look around, the South Asian markets had vibrant recorded music industries which launched marquee names, such as 04 Economic impact of the recorded music industry in India Foreword by Deloitte India At the Indian Music Convention: Dialogue Not everything that counts can be in August 2018, IMI had announced counted. Among the greatest powers its intent to conduct a study on the of music are its ability to cut across economic impact of the music industry cultures and its ability to heal. This report in India. IMI, in conjunction with Deloitte, discusses the impact that music creates has drafted this report on the subject. on so-called softer aspects. If you think back to a concert you have India is the world’s second-most attended, you may recall that the populated nation and seventh-largest source notes produced by a musical economy. It has a rich cultural heritage, instrument say, an electric guitar, are including a long history of diverse and barely audible. However, these little engaging music. However, India stands notes spawn the booming riffs that the 15th in the world in terms of music audience ultimately hears and enjoys. industry size2. This is not in sync with Sized at about INR 1,068 crore1 (0.006% India’s economic or cultural position in of GDP), the recorded music industry the world, and represents a gap – but in India could be likened to the small also an opportunity to grow. Music is a source note from an instrument. This powerful tool to expand India’s influence report examines how this small note i.e. and spread awareness of many things the music industry creates an amplified Indian − be it yoga, tourism, or made-in- impact on the economy. India products. The first wave of impact is when It is important to shape and package our the music industry touches partner music raw material well, and create an industries of television, FM radio, live enabling environment for the industry events, films, and audio over-the-top to realise its potential. Policy-makers (OTT) streaming platforms − expanding and other stakeholders should bear in its scale to a different order of mind that anything that affects the music magnitude. This report examines this industry (positively or negatively) is magnifying effect. expected to produce a disproportionate impact through the amplification effect. Then there are “informal” users/sectors (such as brass brands) whose livelihood is closely tied to music, or where music plays a key supporting role (such as Jehil Thakkar small gymnasiums). This segment is not Partner quantified in this report. Nonetheless, to Deloitte India give a flavour of this important space, we have discussed one such element − brass bands − through a case study. 1 IFPI, Global Music Report, 2019 2 Ibid 05 Economic impact of the recorded music industry in India Glossary CAGR Compound Annual Growth Rate CD Compact Disc CIPAM Cell for IPR Promotion and Management CISAC International Confederation of Societies of Authors and Composers Cr / cr Crore (1 crore = 10 million) CY Calendar Year Deloitte India Deloitte Touche Tohmatsu India LLP DPIIT Department for Promotion of Industry and Internal Trade FICCI Federation of Indian Chambers of Commerce and Industry FTE Full-Time Equivalent FY Fiscal Year GB Gigabyte GMR Global Music Report GRP Gross Rating Points IFPI International Federation of the Phonographic Industry IMI Indian Music Industry INR Indian Rupee IP Intellectual Property IPRS Indian Performing Rights Society ISP Internet Service Provider M&E Media and Entertainment MCDCU Maharashtra Cyber Digital Crime Unit MeitY Ministry of Electronics and Information Technology MSMEs Micro-Small-Medium Enterprises OTT Over The Top PPL Phonographic Performance Limited TIPCU Telangana Intellectual Property Crime Unit TRP Television Rating Point TV Television U.S. / U.S.A. United States of America U.K. United Kingdom USD United States Dollar Note on scope and units used • “Music industry” in this report refers to the recorded music industry. • “OTT” in this report refers to audio (and excludes video) OTT streaming platforms. • This report uses the lakh/crore system, which is prevalent in India, versus the million/ billion system – 1 crore (cr) = 10 million – 1 lakh (or lac) = 0.1 million • All values in this report are in crores of Indian rupees, unless otherwise specified. • Numbers in this report refer to the calendar year ended 31 December 2018, unless otherwise specified. • USD 1 = INR 68.43 has been used in this report for any INR to USD conversions, unless otherwise specified. 06 Economic impact of the recorded music industry in India 07 Economic impact of the recorded music industry in India Executive summary The recorded music industry in India is is transmitted to its partner industries, This report covers brass bands as a sized at INR 1,068 crore3 (about 0.006% where it produces an amplified effect. of the country’s GDP), and is estimated This amplified impact is characteristic of case study, and notes that while brass to provide direct employment to 1,460 creative sectors such as music. bands are facing headwinds, the people4. When stakeholders and policy- approximately makers think about the industry, these In addition to the formal partner 25,000 people (usually from are the figures that usually provide an industries, several informal users/sectors, low-income strata) who play in such anchor for a sense of scale. However, as which engage with large sections of bands intend to continue to music is raw material for several sectors, society, derive value from music – these play, and recognise the music industry produces an impact include brass bands, small gymnasiums, that is disproportionate to its own scale : restaurants, and parlours. This report this stream as a (illustrated on the next page). does not attempt to size this segment major source of of users. their income. As music flows to its “formal” partner industries of television, radio, live events, Last, but certainly not the least, music films, and audio OTT, it is estimated to also creates an impact beyond the formal represent revenues of INR 8,660 crore and informal usage detailed above. These (8.1 times the size of the recorded music are in areas that do not lend themselves industry) and full-time-equivalent (FTE) to quantification – such as acting as a employment of 38,600 (25.2 times the force for national integration and a tool to employment generated by the recorded expand India’s culture and influence. music industry). Thus the impact of music 3 IFPI, Global Music Report, 2019 4 Deloitte analysis 08 Economic impact of the recorded music industry in India Snapshot of the impact of the music industry Recorded music industry Revenue Employment INR 1,068 1,460 Impact beyond crore FTE the numbers Impact at partner • National integration industries • Social messaging Revenue • Soft power and influence INR 8,660 cr (8.1x) • Health and wellness Employment • Brand perception Informal usage/users 36,800 FTE (25.2x) of music • Brass brands (employment for 25,000) • Small gymnasiums, malls, restaurants, etc.
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