The mystical realm of the Indian Music Industry, forged by the diverse cultures, languages and landscapes of India. The industry has so much to offer from the age-old classical music to the catchy Bollywood tunes and now even the emerging independent scene. The Industry has much more to it than what we get to hear.
In this article we will delve into the intricacies like its structure, how artists and various stakeholders within the Indian music industry earn, the size and growth of the industry as well as its economic impact and the revenue generated for the same.
Structure
There is no doubt that Bollywood is a massive part of this industry, about 80% of the total revenue generated in the music industry can be attributed to Bollywood itself. But Bollywood is only a part of the industry. We can further divide into 3 core parts.
Recording Industry:
The recording industry occupies the major chunk of revenue generation in the Indian music industry; this segment had reportedly grown from 1,663 crores in 2017 to 2,568 crores in 2021. By 2026 the revenue is expected to expand to about 4,849 crores with a steady CAGR of about 13.6%.
Streaming is the major source of revenue in this segment, with about 90% of total revenue generated by the recording industry.
Live Industry:
ranges from performances in small clubs to mega shows by prominent artists. The revenue estimated in 2021 was around 434 crores and is expected to grow up to 1,052 crores in 2026 increasing at 19.2% CAGR (compound annual growth rate). Live industry contributes about 8-9% to the revenue generation of the industry.
The ticket sales are only 30% of the entire revenue, the rest 70% is covered by merchandise, brand sponsorships and deals, private events etc.
Publishing Industry:
Even after necessary amendments which eliminated the assignment of copyrights to music producers, the publishing industry is extremely small in India. Payment of royalties to artists is still not the norm, loopholes are exploited to avoid the payment of royalties.
Therefore, publishing occupies only about 1% of the total revenue generated by the Indian Music Industry.
How various Stakeholders in the Music Industry earn
In the mainstream music industry, the stakeholders are the labels, singers, producers, sound engineers etc.
Labels: Labels are the ones who possess the assets for making the song, promoting the song, and creating a brand for the artist or the art itself. They sponsor the music-making process including the models, shoots etc. T-Series and Sony Music are the major labels in the industry with a market share of 30% and 20% each.
Labels generate revenue through various sources:
- Streaming and Physical Sales – This refers to the income generated through sales/distribution of music online or physically. Streaming has become a major source of income for the labels with the rise of platforms like Spotify, Gaana, Saavn etc even though the revenue per stream is extremely low, popular songs by major labels are able to generate significant revenues.
- Licensing – Labels can license their music which is used in movies, video games, commercials, series etc.
- Royalties via radios, and televisions – Rights for the song have to be purchased by radio or television channels from the labels.
- Others – Other sources can be merchandise, managing shows and performances, YouTube etc.
Now for the musicians, contrary to popular belief musicians are not paid for making music similarly singers are not paid to sing a song. The majority of the earnings of musicians come from live shows i.e. concerts, club performances etc. Royalty is still negligible if the artist is working under a major label in India. But if the artist is working independently, then they are able to earn via their share of profit as royalty (e.g.- the profit would be divided 50-50 between an independent artist and a producer). Other sources can be contracts, session work, merchandise etc.
Producers, lyricists, sound engineers, mixers and other technicians usually charge a ‘flat fee’ for their composition which can vary according to their reputation, quality of work etc. and/or they demand a part of profit as a royalty.
Growth
Even though Bollywood contributes about 80% of the revenues of the Indian Music Industry, there is still a huge gap between both industries with the film industry being valued at around 172 Billion rupees and the music industry around 25 billion rupees only. Indian Music Industry ranks around 17th in the world which is disheartening to see, but this doesn’t mean an absence of a bright future ahead.
The rise of legitimate streaming platforms like Spotify, Saavn, Gaana etc., the dominance of YouTube as an audio-visual platform and the digital revolution in India which has increased internet penetration throughout the country has made not only music more accessible but also the music-making and distribution process more accessible to the masses. This has led to the rise of a budding independent scene in India with new artists and labels. According to Nielsen, 94% of online Indian consumers listen to music, with daily streams going up to 460 million. All this evidently makes streaming the major contributor to the revenue of the industry.
As mentioned in the graph, the Indian Music Industry is projected to be valued at 33 Billion rupees by 2025, with a CAGR of about 15%.
Economic Impact
The direct economic impact of the music industry can be deduced from the employment it generates. In 2022 the recording industry provided direct and indirect employment to around 36,800 Full-Time Equivalents.
The indirect employment mentioned also includes ‘partner’ industries like television, radio, live events/festivals and OTT platforms as the music industry contributes to the functioning of these sectors too. There are many more partner industries such as sound equipments, instruments etc. that the music industry contributes to, so the number in reality is even higher.
Music is also key to many informal sectors/usage. Brass Bands and DJs in India are popular examples which rely on the usage of music to generate revenue. The informal industry provides employment approximately to 14 million Indians, this number is more than the employment generation of the Indian Railways and the Government.
Lastly is the positive effect music has on an individual and even a nation as a whole, the universal nature of music brings people in the culturally rich and diverse country of India together. On an individual level, it has a healing effect on our mental health and has proved also to enhance the cognitive abilities of a human being. Music runs deeper than the confines of numbers and statistics, going beyond them. it is something that enhances life itself beyond the objective nature of data points.
Sources
- Statista
- https://indianmi.org/wp-content/uploads/2021/04/A-Case-for-Free-Market-Economics-in-the-Indian-Recorded-Music-Industry.pdf
- https://www2.deloitte.com/content/dam/Deloitte/in/Documents/technology-media-telecommunications/IMI%20report_singlePage.pdf
