DIGITAL MUSIC STUDY

2018
 India: Market Overview

31 14 32 7 19
Physical Digital Performance Synchronisation Total market
Rights

Physical
Sync. 6.0%
7.0%
Performance Rights
Total market: ₹ 850 Cr.
9.0%
Physical: ₹ 60 Cr.

Digital: ₹ 665 Cr.

Perf rights: ₹ 75 Cr.

Sync: ₹ 50 Cr.
Digital
78.0%

_____________________
- Streaming revenue was key and accounted for 66.8% of the overall market and
digital sales contributed to 78.5% of all sales revenues.
- Income from subscription audio streams tripled to ₹220 Cr. while ad-supported
streaming income fell by 29.5% in 2017.
- Video stream revenues were ₹170 Cr., 29.8% of total streaming.

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 - 96% of respondents listened to
Executive music on smartphones – the
highest rate in the world.
Summary - Younger respondents listen to
more music than older age groups.
IFPI designed and ran the Music Internet users in the 16-24 years
Consumer Study 2018 across 20 of the age group listened to 23.9
world’s major music markets, hrs/week as opposed to 21.5
exploring the music habits of hrs/week national average.
consumers worldwide. Fieldwork was
carried out by independent research
2%
agency AudienceNet. India was a key 3%
13% 9%

part of the study and this document 8%

explores some of the insights taken 11%
from the responses of the 2,000 13%
surveyed Internet users in India aged
between 16-64. The policy 13%

implications of this study are also 14%

13% 3%
discussed.
Radio Interactive radio
Key Insights: Paid audio streaming Free audio streaming
YouTube Other video
- Music is central to the lives of Purchased
Social media
Piracy
Live concerts
Internet users in India. An average Other

user spends 21.5 Hours listening to Share of listening

music per week – more than three

hours each day - which is more
[1]
The global figure is a weighted average across
than the global average of 17.8 18 of the 20 countries included in the study:
hrs/week [1]. Argentina, Australia, Brazil, Canada, France,
Germany, Italy, Japan, Mexico, Netherlands,
Poland, Russia, South Africa, South Korea, Spain,
Sweden, UK, and US. The global average does

21.5 h
Time spent 23.9h – 16-24s not include China and India as the large online
listening to 22.4h – 25-34s populations of these two countries would skew
music each 22.5h – 35-44s
week in India the results.

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- On-demand streaming (comprising
paid and free audio streaming Consumption
services and any kind of video
streaming) and social media Continues to Rise
accounts for nearly half (49%) of all
the time spent listening to music. Internet users listened to music on
- Piracy continues to have a huge free or paid audio streaming services.
impact on the recorded music Engagement was even higher for
industry in India. While the ease of younger age groups with 90% of 16-
access to licensed content on a 24s and 91% of 25-34s using audio
plethora of audio streaming streaming to consume music. Most
platforms offers consumers a users engaged with free audio
simple way to consume licensed streaming services (81%) but nearly
music, 76% of internet users still two-thirds used paid streaming (67%).
admit to using pirated music in the Video streaming platforms and radio
last three months. were other popular means for
- Internet users in India spend nearly consuming music. 89% of respondents
3 hours each week (13% of total use licensed video streaming services
time) listening to pirated music. such as YouTube and 91% listen to
That means Indian internet users music on the radio, making it the
listen to pirated music for more single most used music method in
time than in any other country in India.
the study.

86% 89% 65% 76%

Licensed Audio Licensed Video Licensed Digital Piracy

Streaming Streaming Purchasing
Music consumption methods: Music Consumer Study
2018
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Accessing music through YouTube and industry still falls short on the
on social media platforms such as potential of being a top 10 market in
Facebook and Instagram were most terms of revenue per year. Increasing
popular amongst the 16-24s and 25- the reach of audio subscription
34s age groups who also used both to services, gaining fair rewards from
discover new music. user upload video services, and
increasing enforcement efforts
Smartphones and computers remain
against piracy would help the
almost ubiquitous for listening to
recorded music industry to derive
music across all age groups. 96% of
greater monetization from its content.
users said they used their smartphone
to listen to music, the highest rate
worldwide. 92% said they listened to Lack of a
music through computers. This
tremendous reach of digital music Subscription-
consumption is in line with the
continuing development in internet Based Economy
access through mobile devices in India
Currently, there are over 100 million
and reflects the breadth of cheaper
active music-streaming users in India
data rates offered by network [2]
; however, the overall conversion
providers.
rate from free users to paying users is
Licensed streaming services have also around 1% [2]. The wide availability of
allowed domestic music to flourish: music on services such as YouTube
the three most popular genres and the large consumption of pirated
amongst internet users in India are content present considerable
new Bollywood music, older challenges in persuading users to pay
Bollywood music, and Indian classical for the benefits of streaming.
music.
The study asked those who do not pay
While the digital infrastructure has for streaming what prevents them
facilitated music consumption in
_______________
India, the Indian recorded music [2]Vision 2022: India’s Roadmap to the Top 10 Music Markets
in the world by 2022; China Model - P.47
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from doing so. More than half of answered that they would pay to
respondents (52%) cited the stream music.
availability of music on YouTube.
Anything I want to listen to is
on YouTube 52% 46%
I prefer to download music for 27% 24%
free 38%
Anything I want to listen to, I
can download for free 32%
I prefer the free version of the Free tier Paid streaming Radio
streaming service 30% streaming

I believe that music should be If YouTube only allowed access to music through a paid
free 28%
subscription, 96% users would switch to…

What are your main reasons for not paying for a music
subscription service?
Respondents were also asked how
they would access music if access
Many users also stated that through pirate services ceased to be
downloading for free through piracy available. 97% of respondents would
stops them paying for streaming: 38% opt for licensed alternatives, with 53%
said they prefer downloading music of respondents choosing paid services
for free and 32% say they can (paid streaming and purchase of
download whatever they want for digital downloads).
free.
Industry experts are optimistic that
With audio and video streaming music consumers in India will pay for
services contributing 66.8% of the content if sufficiently incentivized [2],,
total Indian recorded music industry but clearly more needs to be done to
revenue, there is potential for facilitate this change.
substantial growth in the uptake of
subscription streaming services, and Addressing piracy
the survey results support this. The threat of digital piracy to a
Respondents were asked what they thriving music economy is obvious.
would do if YouTube only allowed There’s a pressing need for effective
access to music through paid anti-piracy policies and measures with
subscription, and 27% of respondents a focus on converting piracy users into
legitimate music consumers.
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 76% dire. Further, certain legislative
65% 64% mechanisms put in place to prevent
57% 55%
unlawful website blocking, while
providing vital tools to act against
piracy, are inadequate to address the
threats posed by stream-ripping.
India Brazil China Argentina Mexico
The epidemic of piracy is not limited
Piracy Rates: Top 5 Countries
to websites. There are also pieces of
More users in India use piracy to software like YTD Video Downloader
download music than in any other and browsers plug-ins that
country in the study. Stream-ripping is immediately allow the users to
the most popular form of music piracy download audio from any YouTube
in the country. page. The availability of swift
remedies, including blocking orders,
The Threat of to tackle these pirate services is
crucial to protecting the Indian music
Stream-Ripping and other creative industries.
Furthermore, the app stores and the
Stream ripping is the most common ISPs that host such services need to be
method for pirating music in India: proactive in recognizing this form of
72% of respondents use stream infringement and work with industry
ripping to obtain free downloads of bodies like IMI and IFPI in curbing
music. Stream-ripping is the number stream ripping.
one method for piracy across all age-
One of the most successful anti-piracy
groups. YouTube is the main source of
methods is website blocking. In some
content for stream ripping, typically
areas of India, orders have
through websites like Convert2mp3
occasionally been made against ISPs
and Flvto.biz.
to prevent their users from accessing
YouTube is used widely in India. Paired certain sites such as the 2012 Calcutta
with the ease of stream-ripping, the High Court ruling ordering hundreds
threat of sites like Convert2mp3 is
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of ISPs to block access to 104
copyright infringing websites. Closing the Value
IMI, in association with IFPI, has made
several attempts to take down major
Gap
infringing sites, such as those shown Despite the success of audio
below. streaming services, the IFPI study has
Take-down
Alexa rank Hosting revealed that internet users in India
Domain name rate for pirated
(India) country
content spend almost as much time listening
djbaap.com 0.00% 37,074 USA
mp3jatt.me 0.17% 39,027 USA to music on video streaming services
songspkhero.co USA
m 4.94% 46,523 such as YouTube as on audio
pagalworlds.me 1.20% 59,672 USA
yaarsong.com 5.72% 2,638 USA
streaming services. As discussed,
Joint IMI-IFPI Anti-Piracy Statistics video streaming took up 45% of all
However, ISPs based outside of Indian hours spent listening to on-demand
territory refuse to act despite clear streaming services, with YouTube
and large-scale infringements, citing alone responsible for 36%. However,
their domestic protection towards video streaming services only
user generated or user uploaded generated 29.8% (₹169 Cr.) of the
content, often claiming the protection industry’s streaming revenue (₹850
of the Safe Harbour privileges in US Cr.) in 2017, or 19.9% of total Indian
law. This makes the case for website recorded music revenues.
blocking more important: if infringing Given the fact that 97% of the users
sites based outside India refuse to use YouTube for music, the fact that
cooperate with rights holders, then video streaming generates less than
the most effective method of relief is 20% of the industry’s revenue is still a
to block access to those sites from drop in the bucket. This is the core of
within India. what has been described as the ‘value
gap’.
The value gap refers to the growing
mismatch between the value that user
upload services like YouTube extract
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from music and the revenue returned and directly benefit from, making
to the music community – those who content available to the public on
are creating and investing in music. large-scale user-upload platforms
The value gap is the biggest threat such as YouTube.
globally to the future sustainability of
The legal framework should ensure
the music industry.
that services that actively participate
in the distribution of music are liable
for making content available to the
public and therefore not eligible for
safe harbour privileges designed to
Source: IFPI protect truly passive online
Safe harbours were part of a legal intermediaries.
framework intended to foster growth Doing so will benefit creators,
in the digital economy by protecting producers, consumers and innovative
certain services from liability in digital services alike, and it will
relation to content they host. More stimulate growth and
specifically, the safe harbour competitiveness in the digital
privileges were designed to protect economy.
only passive and neutral internet
intermediaries which do not have
knowledge of infringing activity taking
Fair digital
place on their services. At the same
time, notice and takedown provisions
markets need a
were intended to provide right
holders with the ability to have fair legal
infringing content removed from such
services without having to take costly framework
and lengthy legal proceedings.
A WPPT-compatible legal framework
However, neither element was
will support the growth of the Indian
intended to exempt from liability,
digital music industry
services that actively participate in,
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In September 2016, the Indian Hungama and Gaana. As the Music
government stated in a Memorandum Consumer Study shows, 86% of Indian
that all online transmissions – such as internet users already recognise the
on-demand music streaming – would value of on-demand music streaming
fall under the provisions of section services. Never before have music
31D of the Copyright Act 1957 (as consumers in India had access to so
amended in 2012). Section 31D much licensed music. There is simply
provides that a statutory licence no market failure requiring the
applies to the broadcasting of sound draconian and internationally
recordings. The effect of the unprecedented market intervention
Memorandum would be that digital set out in the Memorandum.
music services that are currently
What is more, if Indian law is
licensed individually on free market
interpreted in the way proposed, it
terms would operate on the basis of a
would not be compliant with the
statutory licence in India. The
WIPO Performances and Phonograms
Memorandum is flawed because it
Treaty (WPPT) to which the Indian
fails to take account of the profound
Government has announced the
legal and commercial differences
country’s accession. The WPPT
between broadcast services and
provides for an exclusive right of
online digital music retailers.
making available content. The
Already, 78 percent of Indian Memorandum also appears to imply
recording industry revenues come that the exclusive reproduction right
from digital services, a substantially for sound recordings set out in the
higher share than the global average Trade-Related Aspects of Intellectual
of 54 percent. The recording industry Property Rights (TRIPS) Agreement
in India is helping to lead the and in the Indian Copyright Act 1957
transition to the digital age, having (as amended in 2002) would be
already licensed 43 million tracks to downgraded to a mere remuneration
some 400 digital music services right, in contravention of the TRIPS
worldwide, including Indian home- obligations. IMI and IFPI are
grown digital services such as concerned that the Indian law would

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become the international exception
and, as a result, its promising
commercial environment would be
severely damaged.

Conclusion
As the Indian music industry continues
to ride the wave of growth generated
by digital consumption, increased
smartphone penetration, and access
to cheaper data, obstacles such as the
lack of fair valuation of content on
some platforms, improper
implementation of price regulation,
and digital piracy threaten the
potential for growth.
The insights from IFPI’s Music
Consumer Study 2018 indicate some
positive trends. Licensed streaming
services are remarkably popular,
particularly amongst younger users.
Other insights highlight the negatives,
such as the factors which prevent Survey for Music Consumer Study 2018 conducted by
users from paying for music: abundant
free content on services that do not
return fair value to artists and a
worryingly high usage of pirated music
among consumers. Contact:
Email: [email protected]
Ph: +91 22 24367864

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