Global music labels bet on subscriptions and advertising to grow in India, a market where only a fraction of users pay for listening to their favourite tunes. The size of the recorded music market in India, now the 17th largest in the world, has taken off in the last couple of years, according to Devraj Sanyal, managing director and chief executive officer (India and South Asia) at Universal Music Group
“We are seeing very strong growth due to rising internet penetration and cheap data costs,” he was quoted as saying in the International Federation of the Phonographic Industry’s Global Music Report for 2021.
According to Shridhar Subramaniam, Asia and Middle East president for corporate strategy and market development at Sony Music, social media advertising through Facebook and YouTube in India is a large contributor to revenue as well.
“Large percentages of these populations are wallet-poor but attention-rich. They’d rather pay for a service by watching some ads rather than via a financial subscription,”
Subramaniam was quoted as saying in the report. “India is YouTube’s biggest market in the region and the biggest market for Facebook worldwide. And these are all platforms that are now heavily into music.”
The paid music market, however, is very tiny at the moment. “Only about 0.5% of listeners actually pay for their music in India,” Sanyal said.
Streaming services such as YouTube Music, Gaana, Spotify and JioSaavn offer premium subscription plans in the country but users can log in to listen to audio content without necessarily paying for it.
“We have seen that it takes time for users in India to pay for content. But it has happened before with mobile plans and OTT services. Gen Z and Y are paying for content today and over a period of time, the market will grow to be substantially large,” Sanyal said in response to a PMN India query.
India’s market size, he said, grew 20.3% to around Rs 1,500 crore in 2021, doubling since 2016. The headroom to grow is “plenty”, as around 65% of India’s music listeners do so through smartphones, which have a penetration of only about 42% compared to 85% in the U.S., he said.
Recorded music revenue reached $25.9 billion in 2021, the highest this millennium, according to IFPI. That’s an increase of 18.5% over the year earlier.
This was the seventh straight year of growth, with paid streaming surging 24.3% in 2021 to $16.9 billion. Growth in 2020 stood at 19.1%.
Overall streaming accounted for 65% of the total global recorded music revenue, up from 61.9% share in 2020, the report said. It was the leading revenue format in nearly all markets.
Revenue from other formats such as the physical sale of CDs and records, performance rights (use at events) and synchronisation (use of recorded music in advertising, film, games and TV), too, rose. The only channel to see a decline was downloads and other digital formats. “It fell 10.7% as the trajectory of digital music consumption continued to move from an ownership to an access model.”