The number of streaming platforms in India has grown to a sizable amount in recent years. This year, Indians spent 19.1 hours streaming music, a decrease from last year where 22.5 hours were spent for the same.
With 90% of audience streaming music online, the non-paying consumers range the highest in the demographically overpowered country. However, despite audio streaming services available through two tiers, paid and ad-supported, 28% of the average user’s total listening time was spent on video streaming services. 27% of music consumption in India takes place on smartphones, while 29% accounts for radio.
According to the IMI Digital Music Study 2019, amongst all genres available, listeners prefer to consume music accompanied by the video. Thus, the higher preference for video streaming over audio streaming and radio broadcasting reflects across all age groups. 94% of respondents consumed music through YouTube or Vevo over audio streaming platforms like Gaana, JioSaavn, etc.
India is a Bollywood driven country which by now we are thoroughly acquainted with. Indian music consumers prefer to listen to music which is accompanied by a video. Bollywood’s ability to create visually appealing music is one of the biggest factors that mulls the percentage of respondents.
Also, the undeniable fact that consumption on YouTube is totally free of cost which gratifies the non-paying consumer group. That said, the user-engagement that takes place on video content platforms transpiring into currency is a questionable factor.
High video engagement = High returns?
The love for music is the driving force behind fans adapting and growing with technology. Although local repertoire continually dominates a country’s charts, in India primarily Bollywood, the video consumption due to the “star” factor is ever increasing. The views on YouTube having questionable grounds have increased momentum for organic views. Also, it has now become highly opted factor for OTTs to start considering viewing the song while streaming. In India, Gaana initiated this idea with the facility to switch between options of either listening with watching or just listening to music.
However, increasing internet penetration and mobile device proliferation backed by cheap internet accessibility are the key drivers for this trend. Smartphone penetration in India grew to INR 340 million i.e., 36% of total phones in 2018, up from 33% in 2017 and is expected to further increase to 39% in 2019.
Paradoxically, in India, the highest disparity lies between the amount people spend to consume music across mediums and the amount that transpires to the revenues returning to the recorded music industry. The sources being on-demand streaming ( audio and video), and radio.
Out of the 28% of the average user’s total listening time spent on video streaming, the most popular video site, YouTube, represents 38.9% of music listening time across streaming and radio but returns 25.3% of industry revenues.
Video streaming in India accounts for 55% of on-demand listening time. However, streaming revenues from Video Streaming Services only accounted for 26% of overall streaming revenues. Last year video streaming accounted for 45% of all hours spent listening to on-demand streaming services but generated 30% of overall streaming revenues for the recorded music industry.
The revenue from video streaming stood at INR 194 crore (USD 28.4 million) or 26.01% of total streaming revenue.
YouTube does not contribute to the music industry revenue as much as audio streaming services do, thereby, the percentages in these surveys are gaping wounds of the music industry.
The differences in the amount not only contributes to a discrepancy in fair value to all rights holders, but it also causes more damage than good to curb the value gap.
What damage is this causing?
The usage of pirated music content (including Cyberlockers, P2P (including BitTorrent), Stream Ripping and Mobile apps) dropped from 76% in 20186% in 2018 to 67% in 2019. This acts as the only silver lining in the recorded music industry in India. However, ranking second in the world of the Top 5 countries in piracy is hardly any good news.
Such a value gap is reflective of outdated safe harbour provisions which need to be brought in line with technological advancements in India. Due to increasing smartphone penetration and internet usage in India, music piracy has shifted from physical piracy to cyberspace.
Social media piracy has emerged in India owing to developments in cyberspace as a form of copyright infringement. certain social media apps, especially those which actively facilitate user-generated content, indulge in copyright infringement by making available to their users unlicensed sound recordings owned by record labels in India to reproduce/ distribute/ publicly perform/ communicate to the public/ synchronize or otherwise use or exploit such recordings. Such apps seek immunity under “safe harbour provisions” to escape liability.
Another factor to look up on to prevent gaping value gap is to invest in Research & Development by record labels. IMI report suggests that the investment by record labels globally on R&D amounts to about USD 5.8 billion. The recorded music industry continues to be driven by innovation. Investment should not be a huge factor for Indian recorded music and labels
The digital media space is altering for both radio and emerging platforms like TikTok and burgeoning media paradigms. Thus, creating new possibilities and adding valuations of public listed companies.
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