Focus

The market’s worth Rs 1200 crore
And it’s music to our ears!

Music is an integral part of life in India. And ever since the moving pictures acquired tongue, music has embraced and engulfed movies, too. Film music today has penetrated the entire social fabric and become the most popular form of entertainment and recreation. No wonder, the business of film music has risen by leaps and bounds, accounting for nearly 80 per cent of the total musicassette market.

From a mere Rs 3 crore in 1970, the Indian music industry grew to Rs 20 crore in 1980, then to Rs 500 crore in 1990 and now stands at Rs 1200 crore (around US $ 300 million). The world music industry stands at $30 billion (US) dollars.

According to the Arthur Anderson survey of the Indian film industry, conducted recently for the two-day international conference organised by the Federation of Indian Chambers of Commerce and Industries (FICCI) in collaboration with the Film Federation of India FFI), the Indian music industry will grow to Rs 300 billion in the next five years. The credit for this goes to the music companies in India, each having vast networks all over the country. They are much more organised than the production sector, which provides software. Many of these companies are already in the corporate sector, while the rest are going in for public issues.

The music market is growing, whether it is in the form of cassettes or Compact Discs. The growth rate is high, not only in the domain of film music but also in the non-film music category. Indian pop songs have also become a craze. The market of cassettes of Indian classical music, both vocal and instrumental, has increased not only in India but also abroad. Though Indian music cassettes do not adorn the big music shops abroad, they do get sold. Thus, the overseas market of Indian music is growing, albeit slowly.

The music industry was the first to feel the pinch of rampant piracy. For, pirates find it much more simpler and easier to transfer music from one cassette to another by paying a paltry sum of Rs 10 or Rs 20. That is why piracy is one of the biggest problems faced by the music business today. The sales of pirated cassettes account for forty per cent of the total income of the music industry in in India because pirated cassettes are sold at very competitive and cheaper rates. To combat the growing menace of piracy, the Indian Music Industries (IMI) set up an anti-piracy cell headed by former supercop, Julio Rebeiro, who has set up branches in every district with retired police officers. They have been able to bring piracy down from the previous level of 90 per cent to 40 per cent.

Online music sales were as low as US$ 46 million in 1997. They went up ten times in 1999 to $3275 million and are expected to move up to $4 billion in 2004. Also in 2004, 8 per cent of all worldwide music sales are going to be online. Indian music is also coming on the Internet. Most of it now is illegal because there is no law against the copyright theft on Internet. The government, the music industry and the law enforcement agencies will have to work together to reduce this menace.
Taxation is another issue which is worrying the music industry. One fifth of the cost is paid by way of taxes which makes it difficult for the industry to thrive. The high excise and customs duties inflate the price and drive the consumer away. The music industry has also been demanding that music be brought under the information and broadcasting ministry.

IT’S A FLUCTUATING MARKET
Harish Dayani
Harish Dayani, of HMV, said that 65 per cent of the sales were from film music and the rest from non-film music. The Gramophone Company of India which he heads, has a turnover of Rs 140 crore, of which Rs 30 crore comes from the overseas market. However, according to him, the market keeps fluctuating as a part of the Indian economic trends.

Harish Dayani further stated that the sale of music cassettes increases if the film is also a hit. "It is co-related. A successful film always helps to increase the sale of cassettes. Kaho Naa... Pyar Hai is a big hit which is why the sale of its music cassettes is high. On the other hand, even if a film’s music is good but the film is not a hit, cassette sales go down.

Workshops to curb piracy
Ganesh jain
Ganesh Jain, of Venus, which is on the verge of going public, said that there has been a 20 to 30 per cent increase in the sale of music cassettes. He also said that 70 per cent of the income accrues from film music, 10 per cent from pop, 10 per cent from ghazal and the remaining 10 per cent from other forms of music. He said that the sale of music cassettes in the overseas market had also gone up by 15 to 20 per cent. Venus is going public soon and it has applied to Securities and Exchanges Board of India (SEBI) for public issue.

Regarding curbing of music piracy, Ganesh Jain pointed out that with Rebeiro heading the anti-piracy cell set up by the Indian Music Industries (IMI), piracy has been curtailed to 40 per cent. "We had recently organised a workshop in which the Mumbai Commissioner of Police and senior inspectors and inspectors participated. We are holding such workshops every year to bring awareness among the police personnel on what music piracy is all about and how to curb it under the copyright laws. We will conduct workshops in Bangalore, Delhi, Calcutta and other centres."

Untapped web potential
Shashi Gopal
Shashi Gopal of Magnasound, agreed that today’s music market fetches Rs 1200 crore and within five years, will touch Rs 3000 crore. He is optimistic the market will increase in the years to come. Magnas-ound’s turnover is Rs 37 crore and he is sure the sales will increase. "The Internet is coming in handy. Music on the Internet at present is illegal but once the rules are framed by the Government of India, legitimate income will accrue from the source. The overseas market for film music has not changed drastically, because of several restrictions and piracy. Big music stores are not selling Indian music, and seem to prefer Western music. If Indian music cassettes are selling well, it’s on account of the Indian stores. It has become difficult to control piracy abroad. There are countries which do not have copyright laws, since they are not party to the Berne Convention."

According to Sashi Gopal, 85 per cent of the sales are for film music from India and 15 per cent from abroad. The volume of business for film music is far higher than for non-film music like pop, classical and instrumental music. He feels that income from cover versions is negligible, since the sale of music for new films is much higher. Any company which does cover versions have to cough up royalties. He said piracy had been controlled to a great extent because of the anti-piracy cell set up by the IMI and efforts are on to put an end to the menace, with workshops intended to enlighten the police personnel about the existing provisions in the Copyright Act so that each police station can take action against offenders.

Curbing piracy is imperative
Ramesh Taurani
Ramesh Taurani of Tips, which has already applied to the SEBI for public issues also put the sales figures for film music at 70 per cent. There is an increase in the sale of music, he agrees, but the quantum of sales of Rs 1200 crore per annum belongs to all language music cassettes. "The sale of film music is good two months before the release of the film. If the film becomes a hit, music sales get even better. Every week, two new albums are released. And out of 100 odd films, hardly 60 are in the A grade. If ten films become a hit, I’d consider it a good sign for the industry," he said.

Taurani added that the Internet will become another source of income for film music, once it is legalised. He feels the telecast of music on the satellite channels increases the demand for music. According to him, the craze for Indian music is growing in the overseas market. The decline of music piracy has helped his company increase music sales appreciably, he added.

MSM Desai