Op-Ed: How India, the 'Mobile First' Continent, Can Reduce Piracy, Earn the Industry $7.8 Billion

(Victorgrigas via Wikimedia)

Vinodh Bhat is co-founder/CEO of Indian digital music service Saavn. He’s also co-founder/principal of 212Media, a privately held venture development company. Follow him at @vbhat on Twitter.

The burgeoning legal music industry in India has, thus far, received little attention from the rest of the world. But for global players, there’s a massive opportunity in this fast-growing market -- one that numbers in the billions of dollars, as revenue barriers like piracy and lack of connectivity are removed.

With a predicted 14.7% CAGR through 2016, according to PricewaterhouseCoopers, the Indian market will roughly double in the next five years. In fact, as online music continues to drive the industry, streaming continues to drive online engagement and mobile drives streaming, it’s a fair assumption that the Indian music market will surpass the West in the near future in terms of consumer numbers. The 1.2 billion people in India and tens of millions in the Indian diaspora comprise the world’s largest music-listening population.

THIS ARTICLE FIRST APPEARED IN BILLBOARD MAGAZINEGET THIS WEEK'S ISSUE RIGHT HERE

Industry experts estimate that India’s music industry could be worth $8 billion globally. However, only $250 million of that is legitimate, as 97% of revenue potential is lost to physical and digital piracy. This represents a major leap in piracy from 64% in 2008 and indicates that current legitimate services cannot keep up with demand, nor have they achieved product-market fit.

In the United States and Europe, labels slowed piracy’s growth with aggressive litigation and legislation, while accessible, legal alternatives appeared. But in India, the fight has just begun. Piracy has a massive impact on music revenue because few legal alternatives are available. Pirates have especially gained traction in digital music, where they have a 10-year head start.

In an attempt to circumvent illegal music trading, a local music label, Tips Industries, chose online music streaming service Saavn for an exclusive digital release of its biggest album this year, the soundtrack to Bollywood action film Race 2. With no pirated options available, the album set multiple streaming records.

If Indian consumers could access legal alternatives, would they use them? I believe the answer is yes.

Unlike the United States, India has neither the infrastructure nor distribution abilities to support physical sales -- its opportunity instead lies in digital, and more specifically, mobile. IFPI estimates that digital music will account for 90% of India’s sales in 2013, with physical music at just 10%. What the country lacks in physical infrastructure, it’s making up in a rapid progression toward a mobile society.

But the mobile market in India can be tricky to navigate, especially for Western organizations accustomed to an evolution from Web to mobile. By and large, India skipped broadband and is poised to be the world’s largest “mobile-first” society. That’s why when the consumer-facing Saavn was introduced in 2011, it focused on mobile (Android first) and teamed with Facebook, allowing for a seamless social listening experience that promotes discovery of legal music.

It would be a huge mistake for the Western music and entertainment industries to ignore India’s potential. Western music currently accounts for 4% of all streams on Saavn, and this is expected to grow to 10% by 2017. India is the second-largest English-speaking population in the world, a fact Western record labels like Sony and Universal Music Group have already recognized.

Digital channels have afforded extra ways for formerly “marginalized” content to reach the masses. There’s a growing trend to make Western celebrities and content more relatable to the Indian audience. For example, take Priyanka Chopra’s “Exotic” featuring Pitbull and “In My City” featuring Will.i.am, both produced by RedOne on Universal Desi Hits. And acts like Lady Gaga, Metallica and Guns ’N Roses have demonstrated a desire to engage more with Indian fans.

The future is bright in India. Rich in benefits for advertisers, mobile carriers, device manufacturers, labels and artists, digital music services like Saavn have the power to guide $7.8 billion into the pockets of its rightful owners. India’s music market is in need of disruption. It’s time to create a legitimate reality for an industry poised to become a global superstar.

 

Billboard.biz welcomes responsible commentary, please send your guest posts and op-ed submissions to andy.gensler@billboard.com.

Questions? Comments? Let us know: @billboardbiz

Print

Tagged