The Indian music industry, long overshadowed by its global counterparts, is finally orchestrating its rise to the forefront of the global stage. Thanks to digital transformation, evolving consumer habits, and strategic partnerships, the Indian music business is not only expanding but also redefining how music is created, consumed, and monetized.
Gaana – the top music streaming platform has reached 150 million monthly active users. Free-to-hear music streaming has got around 80% of its revenue from advertising.
The CEO, Sandeep Lodha, said you could not build a business for free. So our number one strategy for growth is a subscription. We have been running pilots. Over the next two or three years, the advertising to subscription ratio should be 60:40.”
Adarsh Nair, Airtel Digital CEO, who also runs Wynk, says. “There’s nothing wrong in an ad-funded business. The issue is when you apply it to premium content. No amount of advertising can help you recover the cost of content. The root of Wynk is the idea of building a subscription-driven business, which has 30 to 40 % margins.”
Keep reading the article to have deep insight into the Indian music biz getting its act together and how it’s hitting the right notes. Also, explore how subscription-driven business helps top players bring significant revenue and attract more unique visitors.
Swerve to Subscription is a Reaction to Growth and Challenges
Out of 834 million Indians online, about 192 million are using streaming music apps. The number is up from 130 million, measured two years ago. Rakesh Nigam, the Indian Performing Rights Society CEO, says, “Music consumption has shot through the roof.”
Around 70% of the ₹1800 crore music revenue comes from streaming. However, almost all of it is from advertising. In 2019, the advertising revenue earned by the music streaming market across India amounted to ten billion Indian rupees. The revenue is predicted to reach around 20 billion rupees by 2024, marking a 14% compounded growth rate.
Every time a song has been streamed by a label, the rights owners get around 4 to 10 paise per play against an estimated 50 to 90 globally. That does not amount to much in a business awash with hundreds of labels with a few thousand songs each. Five years after streaming took off, music remains at less than half of radio or 10% of films in revenue size.
Lodha says, “Business remains small because it’s free.” A sharp swerve to subscription is the foremost reaction to the challenges and growth that streaming has brought. The second is deal-making and fund-raising in a business that was rendered comatose by the internet.
points out Blaise Fernandes, president, and CEO of the Indian Music Industry, said, “mergers and acquisitions activity crosses the 10 billion mark globally.” In the last four years, Bob Dylan, Neil Young, and David Crosby, among others, have sold Royalty Exchange, Hipgnosis, or Shamrock Capital at 10 to 15 times their value.
The Indian arm of Paris-based believes bought out the music arm and catalog of Venus globally for a reported ₹380 crore in 2019. In 2021, it took a 76% stake in South-based Think Music for ₹1000 crore. Around the same time, Saregama raised ₹750 crores for music acquisition and tech, among others. “We can monetize music better now,” Saregama director Vikram Mehra says.
Streaming Built: Explore the Market Growth in Past Years
When MP3 took off in the late 19’s, the resulting file sharing, however, destroyed the CD ripping to a great extent. The global revenue fell from $23.4 billion to 14.7 billion between 2001 and 2011. The revenue started rising again and reached around $22 billion in 2016.
The launch of streaming apps like Spotify, iTunes, YouTube, and many more changed the business. User-friendly music streaming apps like Spotify reduced piracy, boosted transparency, and helped users discover new music. Vivek Raina, managing director of Believe India, says, “Streaming has been the silent savior for the industry.”
With nearly two billion users Google’s brand across video and music, making around $20 billion in revenue from advertising. It paid $4 billion to the music segment in 2020.
YouTube Music has surpassed 100 million paying subscribers worldwide. That’s not surprising, right? Free platforms perform best on numbers, but subscription-driven ones go with better engagement.
Spotify users spend 15 times more time on the music streaming platform; the number is more compared to average Gaana listeners. Spotify has around 174 average minutes per visitor with 36 million unique visitors. The margins are amazing.
Global norm keeps 30% of subscription revenues. At the same time, the remaining 70% is distributed as 10% to publishers (of music) and 53% to recording firms (which pay artists). This is the primary reason why a subscription is attractive. More than two million Indian listeners subscribe to a music streaming app, while very few choose to go with a video streaming platform. Video streaming apps have 100 million subscriptions.
Advertising-supported free content is crucial for walk-ins in the video as well as music streaming apps. It plays an essential role when it comes to turning 192 million streaming app users into paid subscribers. Nair says, “Analytical is critical.” However, there are rare firms that manage with the combo of tech, algorithms, AI, mood, and music.
Spotify has 400 million users, which makes it the world’s largest subscription-based music service platform and helps the company to make 8 billion in revenue. Akshat Harbola represents three crucial things that Spotify has contributed to. “Initial is the playlist, there are more ways of music consumption. Second, is artist-driven music, and last but not least is the main-streaming of podcasts.
Akshat Harbola says, “We have to keep experimenting with new things to get people behind pay.” Spotify started making revenue in 2019, almost 14 years later after its launch in 2006. This is where all the capital Indian firms are raising comes in handy. One more thing that affected the subscription is what the COVID-19 pandemic brought.
Director of music partnerships, India and South Asia, YouTube, Pawan Agarwal, says, “There is continued democratization of music. We have a lot of independent artists who got fame and fortune.” He points to Emiway Bantai, an Indian rapper who has 17 million subscribers, and also to the rise of different languages like Haryanvi, Bhojpuri, Tamil, and Telugu, among others online.
Raina thinks, “25 to 30% of listeners subscribe while just 10% in others in a mature market. However, in India, it’s less than 1%; however, the subscription is growing faster. Like other global markets, we’re on a trajectory; the upside curve might be delayed.
Indian Music Biz Getting Its Act Together
The Indian music industry is undergoing a transformative journey fueled by digital innovation, regional diversity, and the rise of independent artists. Streaming platforms like Spotify and JioSaavn have democratized music access, allowing regional and indie artists to flourish. Bollywood remains a dominant player but is evolving by embracing diverse genres and international collaborations.
Key advancements include the diversification of revenue streams, heightened focus on intellectual property rights, and the adoption of emerging technologies like AI for personalization and blockchain for royalty transparency. However, challenges like piracy and intense competition among streaming platforms persist.
Despite these hurdles, the Indian music industry is charting a promising future, blending creativity, technology, and strategy to solidify its position on the global stage.
Digital Revolution
One of the most significant drivers of change in the Indian music industry is the digital revolution. With over 900 million internet users, India is a fertile ground for music streaming platforms. Services like Spotify, JioSaavn, Gaana, and Wynk have capitalized on affordable mobile data and smartphone penetration, making music more accessible than ever. These platforms have also enabled regional and independent artists to reach audiences nationwide and beyond, breaking barriers set by traditional distribution channels.
Regional Music Boom
India’s linguistic as well as cultural diversity has catalyzed a regional music renaissance. Tracks in Tamil, Telugu, Punjabi, Marathi, and Bengali, among other languages, are topping charts and amassing millions of streams. Streaming platforms are investing heavily in regional music catalogs, recognizing the untapped potential in these markets. This trend has not only elevated local artists but also diversified the Indian music landscape.
Independent Artists: New Powerhouses
The rise of independent artists is another key development. Platforms like YouTube Music, Instagram, and SoundCloud have provided artists with tools to produce, distribute, and promote their music without relying on traditional record labels. Artists like Prateek Kuhad, Ritviz, and Divine have garnered massive followings, proving that indie music can thrive alongside Bollywood hits.
Bollywood Still Holds Its Ground
While independent and regional music is growing, Bollywood remains a dominant force. Songs from Bollywood movies continue to dominate playlists, owing to the deep connection between Indian cinema and music. However, even Bollywood is adapting to new trends, incorporating diverse genres and collaborating with international artists to appeal to younger audiences.
Monetization and Intellectual Property
The Indian music business has seen a shift in monetization strategies. Revenue streams have diversified from physical sales to digital subscriptions, advertisements, and sync deals with brands. Additionally, the focus on intellectual property rights has grown, with organizations like the Indian Performing Right Society (IPRS) ensuring that artists and composers receive their due royalties.
Role of Technology
Emerging technologies like artificial intelligence (AI) and blockchain are making their mark. AI is being used to analyze listener preferences, curate personalized playlists, and even assist in music composition. Blockchain, on the other hand, is poised to revolutionize royalty distribution and copyright management, ensuring greater transparency and fairness.
Challenges Ahead
Despite the progress, challenges remain. Piracy continues to plague the industry, eating into potential revenues. The lack of a robust legal framework for intellectual property and artist rights also poses hurdles. Furthermore, the competition among streaming platforms is fierce, leading to challenges in sustainable monetization.
Promising Future
The Indian music industry’s ongoing transformation paints a promising picture. As it embraces digital innovation, supports regional talent, and empowers independent artists, the industry is well on its way to becoming a global powerhouse. By addressing its challenges and fostering collaboration, the Indian music business can continue its upward trajectory, offering a vibrant and inclusive ecosystem for artists and audiences alike.
With the right mix of creativity, technology, and strategy, the Indian music biz is indeed getting its act together—ready to take on the world stage.
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FAQs
How is the Indian music industry evolving in recent years?
The Indian music industry is undergoing a significant transformation with the growth of digital streaming platforms, independent music releases, and a rise in music festivals.
What role do streaming platforms play in the growth of the Indian music business?
Streaming platforms like Spotify, Apple Music, and JioSaavn have revolutionized how music is consumed in India. These platforms offer easy access to both local and international artists, while also providing new revenue models for musicians through digital royalties.
Is the Indian music industry embracing independent artists?
Yes, independent artists are gaining more recognition in India. The rise of platforms like YouTube, SoundCloud, and Instagram, alongside music distribution services, has empowered indie artists to release music, build fanbases, and collaborate with brands without needing major labels.
What challenges do artists face in the Indian music business?
Some of the challenges include limited revenue from streaming, piracy issues, lack of proper copyright enforcement, and limited infrastructure for live performances in smaller cities.
How are Indian music festivals contributing to the business?
Music festivals are a major driver of revenue and exposure for both mainstream and indie artists. They have become cultural landmarks, providing a platform for live music, brand partnerships, and music tourism. The growing popularity of festivals such as NH7 Weekender and Sunburn is boosting the industry’s commercial prospects.
What is the future of the Indian music sector?
The future looks promising, with more investments pouring into music tech, infrastructure, and talent.
Are there any new trends emerging in the Indian music scene?
Some emerging trends include the fusion of traditional Indian sounds with global music styles, the rise of music videos as a critical marketing tool, and an increasing number of collaborations between Indian and international artists.