Business of Music in India

…exploring the future…

“Music like water…”

Contrary to what we’ve been hearing for the past few years, the music business is still in good shape. The problem is with the record industry and CD sales. Major labels are suffering across the world. But if we look beyond CD sales, the music market is quite vibrant and alive. More music is enjoyed today than ever before, thanks to new technologies like the Internet and mobile phones, musical TV shows, concerts, etc. “Access” to all kinds of music had never been easier.

The emerging “mobile” economy enables access to your music collection anytime and anywhere. A recent addition in this direction is that lets you store, stream your media files anywhere you go with a free service upto 1Gb of data.

New ways of discovering music today

India has around 60 million Internet users, it is the 4th largest online market in the world and has more than 5 million broadband connections.

With such increasing penetration, people are slowly turning “off” to the radio – that seems to be obsessed with Bollywood – and “on” to the Internet and the cell phone.  Just as heavy Net users watch 40% less television, radio is losing out to digital media – or perhaps morphing into it. Social networking sites like Facebook (with a base of 500 million users) are becoming important options where friends discuss what music to listen to, analyze it and post their views too. Fans and consumers have far more convenient options for discovering new music than ever before.

Digital music services such as iTunes, Rhapsody, Napster, Musicmatch, etc. report that community features are major drivers of discovery for new music. Features such as swapping playlists with others, or ‘people who bought this also bought that’ recommendations help fans discover new music online.

A Product or Service?

In 1887, Emil Berliner invented the gramophone. So without actually being present at a performance, people started listened to music. From being a performance and a service, music now became a fixed ‘product’.

In a live performance, music can never be reproduced in the exact manner every time. There are several factors that come into play – like the artists, their moods, audience reactions, auditorium acoustics, etc. Today, we still have certain forms of music in India that are best enjoyed in a live performance – like classical, folk, qawwalis, etc.

After a century of music being sold as a “product” to us – in the form of vinyls, cassettes, CDs – we seem to be returning to those early days, where music is more about the ‘experience’ than just a static plastic disc.

Like water, music has started to flow into any and all digital networks, whether paid for or not, and whether authorized or not.

Napster was the first in the series of peer-to-peer (P2P) systems, through which people shared their files from each other’s drives. The major record companies in the USA felt so threatened by this idea, that they joined forces and waged war on individuals, companies and technologies that they perceived were enabling piracy of their property.

In 2003, Steve Jobs and his team convinced these very music labels to license their songs to Apple for distribution via their iTunes music store. In March 2010, iTunes crossed the sale of 10 billion songs in March 2010 @ $0.99 per song. It has become the largest music store on the planet.

The future of music business:
Today, technology is empowering the artists to communicate directly with their fans. The digital distribution of music is gradually minimizing the ‘pay-for-product’ mentality that has now dominated the industry for over a century. Because if music won’t remain a ‘product’, then how can these labels control its access, pricing or even dictate their terms with the artists?

People like to listen to music everywhere they go. Hence we see gadgets like iPods, music phones becoming more and more popular. Many of the digital stores like iTunes (which recently crossed the 10 billion download mark), are enhancing the experience of song buyers with various new methods. The soon-to-release musicDNA technology (from the makers of mp3) will take the online music purchasing experience to yet another level. Artists will soon be able to sell their wares, lyrics, posters, concert tickets, etc. through the music player!

Singles have never been even remotely profitable for the recording artist, and this new pay-per-track online models sported by iTunes, Rhapsody, Beatport, eMusic, Amazon, etc. will ultimately fare no better. In India, we have services from Hungama, Nokia, Airtel and other music labels joining the fray of online digital stores.

When access to the Net in India will become much cheaper & faster, and mobile phones will offer songs from your handsets; when ISPs, telecom companies will start charging a marginal flat fee and allow subscribers to download unlimited music, the music business is bound to surge higher. Just like water in a tidal wave.


With inputs from MR. DAVID KUSEK, Vice President, Berklee School of Music and the co-founder of MIDI technology.

One Response to “ “Music like water…” ”

  1. vivek Says:

    hey aditya,

    all this is very relevant to today’s day and age.I really think though,that the legalities behind IPR and coyrights and the music business in practice should change to make it a mutually beneficial environment.Where will the music come from othewise if we have only business men and no musicians.We all have to adapt to changes ,coz that is constant,but make sure it’s healthy.