India: Nearing an all-time high

Digital growth in India has been predominantly through mobile channels. Streaming services too are beginning to take off with young consumers and an expanding middle-class driving digital consumption. With 2012 revenues approaching an all-time high, some within the business believe India could become a top 10 global market.

“The Indian music scene has traditionally been driven by Bollywood, but changing demographics, massive internet exposure to global music trends and a progressive youth culture are leading to evolving tastes and this growing market is set to be much more diverse in the future.”

Mandar Thakur, chief operating officer, Times Music

India’s mobile phone market grew hugely in 2006 and has since gained more than half a billion subscribers, taking the total today to 900 million. Music plays a key role in mobile operators’ customer acquisition, branding and engagement strategies, as smartphone adoption rises. Leading operators such as Airtel, Vodafone, Idea and Tata Docomo offer a range of music services including ringtones, ringback tones, downloads and mobile radio streaming services - which are usually bundled into subscription packages. Mobile radio services are evolving to offer multi-language stations and intelligent playlists.

“The concept of daily subscription for all kinds of music products on mobile is well instilled in India.”

Shridhar Subramaniam, president, Sony Music India and Middle East

Streaming services such as Gaana, Dhingana and Saavn and download stores are beginning to emerge. Unlike music offerings from mobile operators, independent services face some key challenges, such as establishing a billing relationship with customers in a country where only 1 per cent of the population has a credit card (Reserve Bank of India).

“We have been working hard to license a range of services that meet the needs of consumers. India now has a diverse market of download stores, streaming services and bundled offers.”

Devraj Sanyal, managing director of Universal Music India

India’s emerging music business is still struggling to compete with piracy. IFPI estimates that more than half of internet users (54%) access unlicensed services on a monthly basis in India - a huge market potential, if some of them can be migrated to licensed services.

The Indian courts have started to act to support legitimate digital and creative industries. In February 2012, the Calcutta High Court issued an injunction ordering 11 ISPs to block access to the infringing website A further judgment in March 2012 ordered 387 ISPs to block access to 104 infringing websites. IFPI estimates that with this single action, nearly 10 million internet users stopped accessing these sites. In February 2013, the courts ordered all these ISPs to block a further 162 websites. However, more action is needed to tackle other unlicensed sites to enable emerging licensed services to grow.

The physical market in India is dominated by local repertoire, with Bollywood soundtracks hugely popular. Domestic repertoire accounts for an even greater share of digital sales. This is a vibrant market with more than 500 music labels releasing music in over 20 languages. India’s music tastes are changing and with consumers increasingly open to modern interpretations of the traditional Bollywood sound, many labels have started to invest in this area. As the market improves, and a growing middle-class starts to embrace its own popular culture, many suggest India could become the second-largest market in Asia.

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