India's recorded music industry can rival Europe's in 10 years: IMI study

Indian recorded music industry is losing a potential revenue of Rs 2,000 crore to Rs 3,000 crore every year due to policy gaps, archaic  rules and regulations, says a recent report published by the Indian Music Industry (IMI), the apex body that represents the recorded music industry in the country. The report says that with the right policy push, the industry has the potential to be on par with the size of the European music market in a decade.  

The recorded music revenues for Europe accounted for $6.1 billion or Rs 42,997 crore. In addition, the live music revenues were more than $8.8 billion (Rs 62,555 crore) and publishing revenues were $6.1 billion (Rs 42,861 crore) in Europe for 2019, the report said. In comparison, Indian recorded music industry is valued at just Rs 1,500 crore.

"Since 70 percent of recorded music in India is film-based, the growth of the film industry should have led to the growth of the recorded music industry. However, despite this symbiotic relationship, today the film industry is valued at Rs 19,100 crore, while the music industry is valued at a mere Rs 1,500 crore. Archaic laws compounded by unwarranted and unnecessary regulatory interventions, especially in the rapidly developing digital marketplace as well as exemptions from Public Performance Rights, due to policy lacunas point to the wide revenue gap between the recorded music and film industry," Blaise Fernandes, President and CEO of IMI said.

Fernandes, who authored the report, attributed the potential revenue loss of the industry  to obsolete laws eroding the fair value of the copyright, safe harbor provisions under Section 79 of the Information Technology (IT) Act, 2000 (leading to a value gap between the copyright holders and platform) and exemptions from Public Performance Rights.  

The report, "A case for free market economics in the Indian recorded music industry" says the growth of the industry can come on the back of 448 million smart phone users (growing up to 973 million by 2025) and the lowest data pricing in the world (at $0.09 per GB of data). In addition, the 700 million unique bank accounts, swift moves towards digital transactions - around 2.3 billion monthly UPI transactions - and the central government's Bharat Broadband programme BharatNet will bolster progress, the report says.

It also highlights the growth of India's digital advertising market at a CAGR of 24.12 percent during 2016-20 and estimates that if the growth trend continues,  the digital advertising market will touch Rs 1.66 lakh crore by 2030.

"A digital regulatory system being built around JAM (JanDhan - universal basic income, Aadhar - unique identification program and Mobile) controlled by the state which is promoting an interoperable ecosystem, to prevent a winner takes all situation, will enable a number of digital services to co-exist and the market to bloom", Fernandes says.

India's linguistic heterogeneity - 2,264 languages recognised by the constitution of India and 19,56965 local dialects - mirror the cultural diversity of Continental Europe, and it is plausible to believe that India can aim to be on par with the size of the European music market in a decade, it concludes.

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