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The indian music industry & Tik tok

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Mehvish Alam Quadri
Mehvish Alam Quadri

The document discusses the Indian music industry and the potential for musical.ly in India. It notes that while the Indian music market is growing, it still lags significantly behind the US market in revenue. It also discusses how local leaders like T-Series dominate the market due to their production of Bollywood music. The document then covers the rise of streaming services in India and opportunities for musical.ly to grow its user base, engage users, and monetize the platform through advertising, promotions, microtransactions and other means. It proposes partnerships and licensing models to help control costs and protect the platform from copying by competitors.

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The Indian Music Industry & musical.ly
The Great Indian Circus Let the show begin
› India has now become the second- largest smartphone market in the world › Estimated to reach 500 million users by 2020 › Data rates have fallen drastically enabling increased data consumption › Even then..
300,000,000$ In Annual Revenue The size which the Indian recorded music business will reach in 2019, which may seem a lot but it is just... 4%Of the US recorded music business (2016) revenue which earned 7,650,000,000$
Local Leaders › The Big 3 in music – Sony Music Entertainment, Universal Music Group, and Warner Music Group – have little say in India › The market is ruled by players like T-series, Zee Music, Times Music, etc owing to the moats they have created by ruling one thing..
...Business of Bollywood › Bollywood accounts for 80% of the Indian music industry revenue › Local leaders – produce Bollywood movies, have artists signed to their labels, and promote them as playback singers – creating a virtuous cycle which entrenches them against foreign competition
The Higher Authority › Government regulation also has a part to play in low penetration of International music › Where FM radio provided support in US and other countries, All India Radio completely regulated the radio market until 1999 › Thus, foreign players have a huge gap that they need to cover
Copyright conundrum › Until the Copyrights (Amendment) Act 2012, producers used to pay a one time fee to composers and songwriters who then had no authority on their work › The new law now assigns non-transferable rights to the artists for a period of 60 years › IPRS, registered in 2017, is a society which looks after violations where licensees do not pay royalties to composers/lyricists › There is still no clarity of scope of IPRS because of long term copyrights for artists still being in a nascent stage in India › PPL and Novex are some other societies which look after royalties for playing recorded music publicly
Rise of Streaming › Music Streaming in India recorded 27% revenue growth in 2017 › Major Players – Saavn, Gaana, Wynk, Hungama and Jio Music › Revenue Model – Advertising and Subscription › Subscription packages are around Rs 100 per month
Rise of Streaming (contd.) › International music is the fastest growing category in online streaming › Bollywood’s share in streaming dips to 60%, leaving room for International, Regional, and Indies to grow and be discovered › Piracy is still the biggest threat to the industry
Streaming Model › While Saavn and Jio license music on a minimum guarantee, Gaana and Hungama pay royalties on streams › A play is counted as a stream if the time duration exceeds 10 seconds › The market industry standard on royalties is 0.0011 cents per stream (7 paise per stream)
Independent artists and events › With platforms like YouTube giving access to everyone, independent artists are on the rise. › On YouTube 500 creators have more than 100k subscribers, 14 have more than 1 million › Movie producers are giving opportunities to new artists › Mumbai, Bangalore, and Calcutta are rife with local underground communities, with artists like Nucleya and DJ Ritviz being shot to fame › The industry still needs to be more open to this talent
The way for Growth, Engagement, & Monetization musical.ly
Audacity of Copying Well › Features don’t differentiate › Samsung copied Apple by launching full screen phones › Instagram copied Snapchat Stories › Facebook has now launched a lip-syncing functionality on live video › What differentiates Musical.ly that will protect it from this threat?
Climbing the ladder Launch of musical.ly Creating live.ly and other products Extracting value from the ecosystem First Delivering an orthogonal product that appealed to an underserved market Second Leveraging the position to create an array of products to expand the total addressable market Last Increase the service’s revenue potential through this huge unique user base
Growth & Engagement Reaching our audience Introducing musically Originals by partnering with up & coming bands. Focusing on India’s Top 15 cities. Sponsor college fests, and local music events. Preloading the app on OEMs through platforms like Digital Turbine Verbal.ly YouTube, Snapchat and Instagram lack platforms where Influencers can connect with Brands. This gap is being filled by platforms like GrapeVine. Musically can inititiate to fill this gap on an intimate level to attract more influencers. The goal is for them to migrate from other platforms to Musically Engaging our audience Monthly contests and giveaways. Brand and movie promotions
Monetization Native Advertisements Musically can now leverage its user base and the new UI to introduce native ads on the platform. Ads can be short format (5-10 secs) which don’t hinder the experience of the user Movie Promotions With big budget movies on the rise, and films regularly crossing landmark revenue figures, producers are looking to invest in a promising platform for promotions. Actively engaging audiences through film dialogues and songs trumps over passively watching movie trailers and posters Brand Sponsored Posts Musically has a young audience with a skewed female audience. Brands with this target audience have an opportunity to engage with them. Musically needs to tap these brands to unlock this huge revenue potential
Monetization (contd) Micro Transactions Instead of following a pure subscription model or a pure advertisement model, Musically can introduce micro transactions. Musers or creators can buy exclusive Songs, Stickers, Filters, & Masks for minimal cost (few cents). Will be great for launching Brand sponsored stickers Event Promotions With the rise of independent bands and the local music scene, Event organisers are looking to reach out to a larger audience. Musically can partner with major events like NH7 Weekender or Sunburn, and with city specific events
Cost Control Licensing Model Instead of licensing music on fixed guarantees, Musically can follow the Gaana model of paying royalties based on streams. A tie-up with a music partner like Saavn, where Saavn Pro users can access a wider catalogue will help reducing direct content deals with Music labels Barter Deals As mentioned before, the Indian music industry works on producers creating Bollywood movies and them having the music rights. A barter where musically promotes a movie in exchange of music rights – perpetual or limited – is a win-win
Some notes for Business Plan › The Business Plan for Musically is for the next one year › Licensing cost is based on royalties being paid per use of a music piece › Fixed costs can be discussed internally › Figures are conservative, and derived from assumptions
THANKS!Mehvish Quadri Mehvish.quadri10@gmail.com

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The indian music industry & Tik tok

  • 3. › India has now become the second- largest smartphone market in the world › Estimated to reach 500 million users by 2020 › Data rates have fallen drastically enabling increased data consumption › Even then..
  • 4. 300,000,000$ In Annual Revenue The size which the Indian recorded music business will reach in 2019, which may seem a lot but it is just... 4%Of the US recorded music business (2016) revenue which earned 7,650,000,000$
  • 5. Local Leaders › The Big 3 in music – Sony Music Entertainment, Universal Music Group, and Warner Music Group – have little say in India › The market is ruled by players like T-series, Zee Music, Times Music, etc owing to the moats they have created by ruling one thing..
  • 6. ...Business of Bollywood › Bollywood accounts for 80% of the Indian music industry revenue › Local leaders – produce Bollywood movies, have artists signed to their labels, and promote them as playback singers – creating a virtuous cycle which entrenches them against foreign competition
  • 7. The Higher Authority › Government regulation also has a part to play in low penetration of International music › Where FM radio provided support in US and other countries, All India Radio completely regulated the radio market until 1999 › Thus, foreign players have a huge gap that they need to cover
  • 8. Copyright conundrum › Until the Copyrights (Amendment) Act 2012, producers used to pay a one time fee to composers and songwriters who then had no authority on their work › The new law now assigns non-transferable rights to the artists for a period of 60 years › IPRS, registered in 2017, is a society which looks after violations where licensees do not pay royalties to composers/lyricists › There is still no clarity of scope of IPRS because of long term copyrights for artists still being in a nascent stage in India › PPL and Novex are some other societies which look after royalties for playing recorded music publicly
  • 9. Rise of Streaming › Music Streaming in India recorded 27% revenue growth in 2017 › Major Players – Saavn, Gaana, Wynk, Hungama and Jio Music › Revenue Model – Advertising and Subscription › Subscription packages are around Rs 100 per month
  • 10. Rise of Streaming (contd.) › International music is the fastest growing category in online streaming › Bollywood’s share in streaming dips to 60%, leaving room for International, Regional, and Indies to grow and be discovered › Piracy is still the biggest threat to the industry
  • 11. Streaming Model › While Saavn and Jio license music on a minimum guarantee, Gaana and Hungama pay royalties on streams › A play is counted as a stream if the time duration exceeds 10 seconds › The market industry standard on royalties is 0.0011 cents per stream (7 paise per stream)
  • 12. Independent artists and events › With platforms like YouTube giving access to everyone, independent artists are on the rise. › On YouTube 500 creators have more than 100k subscribers, 14 have more than 1 million › Movie producers are giving opportunities to new artists › Mumbai, Bangalore, and Calcutta are rife with local underground communities, with artists like Nucleya and DJ Ritviz being shot to fame › The industry still needs to be more open to this talent
  • 13. The way for Growth, Engagement, & Monetization musical.ly
  • 14. Audacity of Copying Well › Features don’t differentiate › Samsung copied Apple by launching full screen phones › Instagram copied Snapchat Stories › Facebook has now launched a lip-syncing functionality on live video › What differentiates Musical.ly that will protect it from this threat?
  • 15. Climbing the ladder Launch of musical.ly Creating live.ly and other products Extracting value from the ecosystem First Delivering an orthogonal product that appealed to an underserved market Second Leveraging the position to create an array of products to expand the total addressable market Last Increase the service’s revenue potential through this huge unique user base
  • 16. Growth & Engagement Reaching our audience Introducing musically Originals by partnering with up & coming bands. Focusing on India’s Top 15 cities. Sponsor college fests, and local music events. Preloading the app on OEMs through platforms like Digital Turbine Verbal.ly YouTube, Snapchat and Instagram lack platforms where Influencers can connect with Brands. This gap is being filled by platforms like GrapeVine. Musically can inititiate to fill this gap on an intimate level to attract more influencers. The goal is for them to migrate from other platforms to Musically Engaging our audience Monthly contests and giveaways. Brand and movie promotions
  • 17. Monetization Native Advertisements Musically can now leverage its user base and the new UI to introduce native ads on the platform. Ads can be short format (5-10 secs) which don’t hinder the experience of the user Movie Promotions With big budget movies on the rise, and films regularly crossing landmark revenue figures, producers are looking to invest in a promising platform for promotions. Actively engaging audiences through film dialogues and songs trumps over passively watching movie trailers and posters Brand Sponsored Posts Musically has a young audience with a skewed female audience. Brands with this target audience have an opportunity to engage with them. Musically needs to tap these brands to unlock this huge revenue potential
  • 18. Monetization (contd) Micro Transactions Instead of following a pure subscription model or a pure advertisement model, Musically can introduce micro transactions. Musers or creators can buy exclusive Songs, Stickers, Filters, & Masks for minimal cost (few cents). Will be great for launching Brand sponsored stickers Event Promotions With the rise of independent bands and the local music scene, Event organisers are looking to reach out to a larger audience. Musically can partner with major events like NH7 Weekender or Sunburn, and with city specific events
  • 19. Cost Control Licensing Model Instead of licensing music on fixed guarantees, Musically can follow the Gaana model of paying royalties based on streams. A tie-up with a music partner like Saavn, where Saavn Pro users can access a wider catalogue will help reducing direct content deals with Music labels Barter Deals As mentioned before, the Indian music industry works on producers creating Bollywood movies and them having the music rights. A barter where musically promotes a movie in exchange of music rights – perpetual or limited – is a win-win
  • 20. Some notes for Business Plan › The Business Plan for Musically is for the next one year › Licensing cost is based on royalties being paid per use of a music piece › Fixed costs can be discussed internally › Figures are conservative, and derived from assumptions