Wednesday, March 7, 2018

“Indian youth is waiting to be enticed by knock-out digital platforms. It’s a matter of time” | Music Business Worldwide

The following MBW blog comes from Simon Wills (pictured), Director of UK-based Absolute Label Services. Wills recently attended the annual trade mission to India organised by UK trade body BPI. There, he got to understand the challenges facing the music business in the territory but also the great opportunities on the horizon.

There are just over 1.34 billion people in India, and that figure looks set to grow beyond the population of China (1.4bn) soon. Together, both China and India make-up over a third of the world’s entire population, so it’s not hard to see why so many are looking to them as the next big opportunities for the music business.

The good news is that music is already embedded in Indian culture. Getting people to pay for music over there, however, has been a real issue.

It was reported last year that the recording music industry in India generated just US$0.09 per capita in trade, compared to the UK and US, which garnered US$16.41 and US$19.42 respectively.

The streaming landscape in India sheds more light on the problem. There are over 400 million mobile internet users, of which 100 million are signed up to a freemium music platform. That’s a big userbase for any format but, of that, just 1% have converted to a paid subscription – a lowly 1 million.

The range of digital platforms available to Indian music consumers is diverse – from those owned by local telcos such as Wynk and Jio Music, to other key players including Apple Music, Saavn, Gaana and Hungama. And things are certainly hotting up with Tencent recently having bought into Gaana.

Talking to execs in the Indian market, there are two main reasons for the disparity between music availability in the country and paid-for consumption.

Firstly, we have to keep in mind that almost 70% of all music consumption in India is Bollywood, with the remaining 30% being referred to as ‘indie/international’. Unless western music companies are serious players in the Bollywood genre, they are bound to experience what seems like a disparity between the market size and the return they are getting from the country – at least for now.

“much of India’s population expect music to be free… But you only need to think back a few years to remember a similar landscape in western markets”

Simon Wills, Absolute Label Services

Perhaps more significant is the price sensitivity of the Indian consumer base when it comes to music. Speaking with local executives and experts during the BPI’s trade mission to India, the general consensus was that much of the country’s population expect music to be free. Even when the approximate price of a paid subscription service is £1 per month, music is commonly consumed via YouTube, free tier streaming and piracy. Music is also often sold on pre-loaded SD cards that can be used in mobile devices.

This may not sound ideal for any artist, manager, label or publisher looking to make moves in India, but you only need to think back a few years to remember a similar landscape in western markets. It took a long time to convince consumers in the UK, US and Europe to pay for media content, but the music industry – alongside TV and film – has made real strides. Today, the younger generation in particular think little of holding a number of entertainment subscriptions from the likes of Spotify, Netflix, Amazon, Apple and Sky each costing up to £10 a month if not more.

The breakthrough came when the added value provided by these platforms and their apps became undeniable. They are intuitive, user friendly, offer vast media catalogues and provide structure and assistance on the discovery journey.

In my opinion, it’s only a matter of time before consumers in India begin to embrace these premium services for the same reasons – as long as the product is irresistible. In fact, if you listen, you can already hear the change coming. I asked one young local man how he listened to music and was confused when he replied ‘Spotify’ – a platform that hasn’t even launched in India yet.

“It’s easy,” he said. “You just use a program that makes it look like you are listening from a different country.”

He then showed me his music library, largely made up of current R&B and pop hits from the US and UK – again parallel to what we have seen at home, with streaming helping the younger generations reach beyond the barriers of genre, language and culture (Despacito, anyone?).

I travelled back from the BPI’s trade mission eternally optimistic, because it seems to me that convincing consumers in markets like India is not so much a problem as it is a matter of time. The younger generation is ready and waiting to be enticed by knock-out digital platforms. From there the potential is huge.Music Business Worldwide


No comments: