FICCI-KPMG-Report-13-FRAMES

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144 The power of a billion: Realizing the Indian dream Branding of content and building branded properties Seeking to capitalize on the longevity inherent to musical content, labels and event organizers are seeking to build enduring brands around music platforms, events and services. Several lifestyles brands are associating themselves with live music events and concerts in order to engage with target audiences and create an experiential property. These arrangements are made for long terms in order to unlock value. Brands contribute 60 percent of revenues under a sponsorship arrangement. 84 Properties such as Eristoff Invasion, Bacardi NH7 Weekender, The Great Indian Oktoberfest, and Sunburn have built such properties for an ultimate experience. Similarly, Universal Music India has launched a division in 2012 to create brand anthems and corporate jingles which can be monetised through music sales. Bundling music services with the services of telcos and internet service providers (ISPs) can ensure in a win-win situations for both parties. While bundling enables music services to reach mass market — leveraging telcos’ and ISPs’ established commercial footprint and billing structures — music services help telcos and ISPs to enhance their service offerings and reduce churn rates. In April 2012, Deezer, a French web-based music streaming service, partnered with T-Mobile to offer unlimited music streaming service on select mobile tariff plans in Austria. 88 © 2013 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. Universal Music Group has started a ‘music launcher project’ for HP. A launcher is embedded on to all HP laptops and provides users instant access to Universal’s music catalogue. The launcher will be embedded on over 2 million devices and is accompanied by an annual subscription to the music service powered by Universal Music India. This project is currently active in about 21 countries. 84 Coca Cola India’s Coke Studio@MTV has established a dynamic music property that brings together diverse artists from different genres and countries to one platform and has set a benchmark for music lovers. The second season was the highest downloaded musical project across all platforms and is amongst the most successful and the highest ‘pre-booked’ album last year on Flipkart 85 . Similarly, Bacardi India’s Dewarist, a TV show won bronze medal at Cannes Lion 2012 Awards for Branded Content and Entertainment category. The show’s official YouTube channel garnered over 1.7 million views, making it the top rated brand channel in the country at the time. Through distribution of the 10 collaborative tracks created during the show, Dewar’s India facebook page generated over 3.2 million social engagements and over 120,000 download 86 . In the near future, brands are expected to drive music properties and create an enriching experience that drives the audience and is at top of the mind for brand recall. Adoption of new revenue models In order to generate new revenue streams, music companies are now embracing various digital distribution models and licensing content to online music services. Major online music services companies such as Spotify, Flyte, Apple’s iTunes store and streaming sites such as Gaana.com, Saavn, Dhingana etc. generate additional revenues through licensing agreements. 84 These include pay-per download to ad-based music streaming and paid streaming models. Saavn is set to launch a paid subscription model in March, 2013 for its streamed music service for the Indian market. The product will initially be available on Apple’s app store with a monthly subscription fee of INR 215 after a 30 day free trial. Apps for Android and feature phones are also planned. Key features include ad-free listening, offline listening on up to 5 devices per account and allowing consumers to sync multiple devices over cellular or wi-fi data connections 87 . 84. Industry discussions conducted by KPMG in India 85. Radioandmusic.com November 1, 2012 86. Radioandmusic.com, June 25, 2012 87. Medianama.com, February 12, 2013 “ With cost effective streaming, constant improvement of digital infrastructure and digital delivery of content – the biggest opportunities in the digital music world is yet to be unlocked. Website and application developers have to stay ahead of the technology, build trust with users on payments and use advertisers only where delivery of content is free for the end-users. The winner will be someone who can be innovative at the same time continues to engage with his customer and ensure that content cannot be pirated or downloaded illegally from their platform. “ - Anand Kumar Patner, Sand Hill Counsel Simplified music discovery to encourage consumption of newer genres Social media platforms are enabling easier discovery of varied genres and thereby allowing artists’ exposure to larger audiences. South Korean artist Psy’s ‘Gangnam Style’, is an example of international visibility and success achieved through the social media platform. The song premiered on YouTube, crossed the one-billion views mark in December 2012 and emerged as the first ever video to break that barrier. 89 Its success is indicative of growing interest in new genres by audiences and the emergency of music discovery as a tool to achieve greater success. While Bollywood music continues to command a dominant position in the Indian market, the non – Bollywood music space has witnessed a considerable activity. Both regional and international music have seen a good traction among the audience. Various industry players are taking steps to encourage consumption of new genres of music. Electronic Dance Music (EDM), a popular music genre has seen growth in audiences and leading to successful EDM music festivals in India. “ContraBass Records”, India’s first purely electronic music label, is being introduced by Universal Music India. It is a sub-label set up by Universal Music India to cater to the growing population of purely Electronic Music listeners in India 90 . 88. http://thenextweb.com/eu/2012/04/26/deezer-partners-with-t-mobile-to-offer-unlimited-musicsubscriptions-with-mobile-tariffs-in-austria/ 89. http://youtube-trends.blogspot.in/2012/12/gangnam-style-crosses-one-billion-view.html 90. Radioandmusic.com, November 21, 2012
The power of a billion: Realizing the Indian dream 145 Growing radio and television penetration will further accelerate this trend. During 2012, we observed conversion of some of radio channels into all English music channels while the television industry observed launch of niche channels in the music category. International music on the rise With world’s second largest English speaking population (more than 125 million) 91 , India has a big audience for Western music. The growing popularity of international music can be validated by the fact that ‘Vevo’– an online destination for International music – ranks 7th among the most viewed YouTube channels in India 92 . While the country is seeing a surge of demand for International music and artists, there is lack of promotion and availability of international music in comparison to other genres of music content. Many music stores are trying to bridge this gap with launch of legitimate international music destinations. While the consumption of international music on mobile is just 5-7 percent of the overall music consumption in the country 93 , it is expected to grow its share in the coming years. “ Recent reports of industry performance indicate an upward “correction”. Organized funding (such as hedge funds and private equity funds) can provide much needed lift-off to the music industry. With wider proliferation of devices, rapid evolution of technology and changing consumer habitats, such players can provide necessary funding to connect the dots over a long gestation period. In the near future we will witness increasing importance of video packaged along with audio on portable high-capacity mobile devices at a mass affordable price. Cheaper and faster pipe (for e.g. advanced LTE) access will drive consumption on digital platforms and revive the music industry fortunes. “ - Mandar Thakur Chief Operating Officer, Times Music Capturing this opportunity is digital distributor South Asian Audio Visual Network (Saavn), which has expanded its catalogue with a wide range of international music through the launch of a new product ‘Saavn English’. The company has tied up with Sony Music Entertainment and Universal Music Group to offer more than 250,000 94 international songs on its website. Saavn English brings music from artists including Jay-Z, Pitbull, Shakira, and Michael Jackson, for Indian listeners. Apart from the website, Saavn also plans to launch Saavn English on mobile platforms such as iOS, Android, and Java/J2ME (Feature phones). Another player is 9X Media Group, which has launched its latest offering in the space with an online music store for international music at www.9xo.56060.in. It has also created a WAP portal to download videos, wallpapers, ringtones and audio packs. 9XO has recently partnered with Universal Music to launch ‘GRRR!’ – a collection of the popular songs from The Rolling Stones, an English rock band, over the last five decades. It also carried out a monthlong campaign celebrating the band’s legacy in India. 95 NexGTv, a mobile TV service has unveiled an English music channel called nexGTv Music. There are over 300 popular English songs on the channel, and the number is set to grow. Conclusion The industry is innovating and licensing every viable form of music access for consumers. The next phase of growth for the industry will be driven through providing digital music services to consumers at affordable prices, with ease and access they seek. The battles for music audiences will be fought over the Internet. Improved digital infrastructure and maturing audience tastes will catalyze growth. Players which achieve consumer loyalty through enhanced music consumption experiences will stand to benefit. 91. Census 2001 92. http://www.business-standard.com/article/companies/cira-media-launches-4-english-musicchannels-113021400458_1.html 93. http://techcircle.vccircle.com/2012/02/01/hungama-brings-vh1-on-the-mobile/ 94. http://www.radioandmusic.com/content/editorial/news/saavn-expands-india-catalogue-withintl-music-partners-tips-race-2 95. http://www.afaqs.com/news/story/35323_9X-Media-Group-launches-online-store-forinternational-music © 2013 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
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Acknowledgement We acknowledge the
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FICCI-KPMG-Report-13-FRAMES

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