The Indian music industry witnessed a growth of 15.3% year-over-year, amounting to INR 1700 crores in FY19. Digital consumption was the biggest contributor to this growth. By FY24, this revenue is expected to grow to INR 3500 crores.
The Indian music industry is expected to grow at a CAGR of 15.8% between FY19-FY24. Audio streaming is expected to grow at 5% higher than the overall music industry. The growth of the Indian music industry for audio streaming platforms shall be pushed by advertisements.
The music streaming share of the overall music industry revenue was 70% in FY19. By FY24, this is expected to reach 82%. The monthly active users (MAUs) on audio streaming platforms reached 165 million in FY19 which marked a phenomenal growth of 50%. This segment is also expected to grow at a CAGR of 20% between FY19-24. This growth will primarily be driven by the rise in subscription, expecting it to grow from 1% to 9% between FY19-FY24. This shall account for 40% growth in CAGR.
However, with an influx of international OTTs like Amazon Prime Music, YouTube Music and Spotify, and ByteDance planning to enter the Indian market this year, the focus for monetisation should remain on converting freemium subscribers to premium subscribers.
Indians on average, spent 21.5 hours per week listening to music which is higher than the global average of 17.8 hours a week. The proliferation of smartphones and lower tariff in data is a common phenomenon which contributed to 55% of the growth and revenue.
According to KPMG India’s 11th edition of the Media and Entertainment report, the size of the entertainment and music industry in India as of FY19 is worth 16.6 billion which is INR 163,100 crore. The growth stood at 11.5% between FY15-Fy19. While the industry recorded a compound annual growth rate (CAGR) of 13% for the same period.
The Indian media and entertainment industry is expected to grow at CAGR of 13.5% between FY19-FY24. This growth is expected to reach INR 307,000 crores by FY24.
India currently is experiencing substantial growth in video consumption, thereby increasing the importance of content-driven networking than ever before.
78% of the revenue is sourced through consumption of licensed music on digital platforms. Music in India is primarily consumed on smartphones which makes up to 96% of the lot. Thereby increasing the consumption of licensed music. Especially through the consumption of music on short video content on user engaging platforms.
An apt example would be of TikTok, a ByteDance property with over 120 million MAUs in India. The success of the app has created new modules of monetisation. TikTok’s popularity and fandom amongst the age group of 16-24 contributed to viral hits such as Lamberghini by The Doorbeen, CocaCola by Tony Kakkar etc.
With frequent and similar hits, the industry can expect more user engagement through applications. Thus, social media players entering the market will have access to licensed music throughout.
Facebook and Instagram now plan to compete with TikTok with its soon to launch app Lip Sync Live7. Facebook already has a licensing deal in place with Universal Music Group to help the platform offer personalised and interactive music features on the app’s story (including Instagram).
Nearly 300 million users in India will be able to take advantage of feature through this licensing opportunity.
The collaboration of applications and music labels shall inherently, drive an increase in quality and quantity of consumption. Meanwhile, in the global music industry, Indian music synchronisation ranks 7th in terms of revenue generation. Synchronisation revenue involves the distribution and placement of soundtracks in feature films, television shows, advertisements, video games, etc. This segment generates only 6% revenue with the possibility of increasing by FY24 through increased user engagement and applications.
Also, the freemium plans that come with OTTs continue driving the penetration of licensed music, however, conversion of the ad-supported user base to paid subscription will expand revenue generation. By FY24, digital advertising is expected to surpass television advertising with a 39.5% share of total advertising.
Reduction in piracy will automatically and organically increase consumption of licensed music if streaming platforms embark to build strong marketing initiatives. Reforms such as WIPO ratification undertaken by the Government of India is helpful in curbing piracy and stream-ripping on platforms to increase licensed music consumption.
The digital segment in FY19 contributed 43.4% growth to INR 173 billion. The revenue generated in this segment included digital advertising and subscription revenues from OTT video and audio.
Within the digital segment, the advertising sub-segment grew by approximately 38% in FY19. The growth in regional consumption also led to the emergence of new avenues for digital advertising.
Currently, India is a house to 30 OTT players with 10 OTTs dedicated to music. With digital consumption entering the Tier I and II markets, the growth is inevitable.
The majority of new users are expected to be online by 2025, which is close to 300 million subscribers. The highest group of consumers span across the Millennials and Generation Z, which is expected to be the largest group of consumers by 2030.
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