The Indian music industry grew by 24% to reach Rs 18.7 billion in 2021, according to the latest report by the Federation of Indian Chambers of Commerce and Industry (FICCI) and consultancy firm, Ernst & Young LLP. The report titled, ‘Tuning into consumer, March 2022, Indian M&E rebounds with a customer-centric approach’ gives an in-depth analysis of how the media and entertainment (M&E) industry fared in 2021.
It goes on to report that Indian consumers have spent an average of 21.9 hours each week listening to music, which is higher than the global average of 18.4 hours/ week. Subsequently, average weekly music consumption on streaming services was 10.4 hours compared to 9.7 hours in 2019.
“While the internet is frequently associated with George Orwell’s dystopian novel ‘1984’, a better association would be with William Shakespeare. His “All the World’s A Stage”, is representative of the Global Recorded Music Industry today and the opportunity it presents for the Indian Music Industry,” said Blaise Fernandes, President & CEO Indian Music Industry.
As a whole, the Indian media and entertainment (M&E) sector grew 16.4% in 2021 to reach Rs 1.61 trillion. The industry will continue to grow at a CAGR of 13%, adding Rs 707 billion in three years, reaching Rs 2.3 trillion in 2024. Digital media grew the most at Rs 68 billion and consequently, increased its contribution to the M&E sector from 16% in 2019 to 19% in 2021. Given that video, audio, text and experiences are available across almost all segments, the M&E sector is redefining itself.
“Investments in Artiste development, Marketing Talent and Data Analytics capability will be the key to success over the next decade in the Music Industry,” said Vikram Mehra, Managing Director, Saregama in the report.
Music Consumption
About 90% of the revenues were earned in Indian music through digital means, though most of it was advertising led, with only three million paying subscribers. About 38% of online music was consumed in Hindi, while Southern languages and international music contributed to another 35% of consumption.
Regional music gained share in 2021, leading to a flurry of deals to acquire regional labels. YouTube accounted for 28% of labels’ digital revenues, and 50% of music consumption. Performance rights witnessed a recovery and grew by 89% once the lockdown restrictions were lifted post the second wave of COVID-19.
“The music segment is seeing growth in non-film music, both mainstream and regional and both of which will continue to grow. However Hindi film music & South film music will continue to lead the music consumption in India. It is time for Indian artists to genuinely break internationally,” said Neeraj Kalyan, President T-Series.
The Indian music segment is expected to grow at a CAGR of 15% to reach 28.1 billion by 2024, thanks to increasing digital revenues. The segment’s paid subscriber base will also grow to over 7 million with a forecast on continued recovery of performance rights as events and activations reach scale.
Additionally, music consumed through paid audio streaming apps increased to 3.3 hours/week from 2.4 hours/week in 2019. More than 80% of this time was spent on domestic content, higher than the global average of 49%. Around 70% of music consumed was less than 18 months old. While the average monthly stream count was over 12 billion streams in 2021.
“[The] Indian music business is at a very exciting stage with the coming of age of music in multiple languages opening opportunities for young talent and listeners alike to explore new sound and genres at the touch of a button given the penetration and of smart phones and music streaming apps in the country,” said Rajat Kakar, Managing Director, Sony Music India
Music Monetisation
Digital revenues garnered 90% of music segment, comprising money earned on music streaming platforms, on YouTube and from telcos. Sync and performance rights grew 55% and 89% respectively over 2020 as the economy came back to normal.
Music streaming apps (excluding YouTube) had a base of approximately 200 million active monthly users, buoyed by WFH passive listening and older audiences trying out digital streaming. Of this, about 18-20 million accessed music as part of data or other bundles, but the paid subscribers base was just around 3 million
The key drivers for growth included bundling with e-commerce and telco data plans, a strategy which remains key for category trial. Industry discussions indicate over 150 billion songs were streamed online in 2021. Streaming platform revenues (including YouTube) increased almost 22% in 2021 to Rs 12 billion, over 80% of which was advertising driven
When it comes to music labels, revenue grew by 34% over 2020, reaching Rs 16 billion in 2021 from Rs 12 billion in 2020. Share of label revenues attributable to digital were 90%, and they contributed about 85% of the absolute revenue growth for labels. Music labels earned revenues through branded content and in-video advertising, estimated at Rs 0.5 billion in 2021.
“I’ve seen a post pandemic, almost fully digital streamscape arise both in audio, video and allied areas. The future will greatly be driven by non-film music of all kinds & genres, short format social media & byte-sized consumption buckets across media and finally music coming to us from other sources like OTT video, branded content & new generation platforms as they keep emerging in the confluence of gaming, fashion & entertainment. The regular growth engines like streaming & radio will continue to grow at an escalated pace as the music market transforms into a music & entertainment market. The next five years are what I’m forecasting to be the golden years of growth of our businesses,” said Devraj Sanyal President & CEO Indian Music Industry; Managing Director & CEO Universal Music Group, India & South Asia
Looking forward
Paid music OTT subscribers are expected to surpass 7 million by 2024 and generate revenues of Rs 2.8 billion, at an average revenue of Re 1 per day, per paid subscriber in India. As film consumption moves on to OTT platforms, and OTT content volumes cross 3,500 hours by 2024, the music they use will begin to garner a larger share of listenership.
Plus, non-film music – particularly in regional languages – will keep increasing its share as well, driven by artist and song discovery on short video and social media platforms
Currently, music in the metaverse is limited to gaming. However, as this platform grows, it opens numerous opportunities. For instance, a virtual environment could offer digitally rendered and in-home concerts, virtual parties/weddings, music lessons etc.
After a strong start in 2020, branded music is expected to increase as customer-centric music will be focused on. Plus, brands will create audio experiences for audiences and users across service delivery and other digital interactions. In-video integrations with brands will enable mass reach through platforms like short form video apps.
Read the full report here
