Independent artistes, internet services and new-age publishers are giving the industry a new lease of life. Ringtones, ringback tones, downloads and mobile radio streaming services, besides downloaded singles and albums from online stores are generating additional fees from mobile subscribers and more licensing revenue for record companies.
Subscription services from Apple and Google, expected soon, are likely to further fuel revenues of the music industry.
Forget the minor fact that record stores — like the Saregama-run Music World chain — are shutting down.
According to the latest International Federation of the Phonographic Industry (IFPI) digital music report, the Indian recorded music market grew for the third consecutive year in 2012, with digital sales overtaking physical sales.
“With 2012 revenue approaching an all-time high, some within the business believe India could be among the top 10 markets, globally,” the report added.
It was, however, a different story a decade ago.
In the 2001-2003 period, the legal music market shrunk by 27% in unit terms and 38% in value terms, according to the Indian Music Industry, a body that represents over 140 music labels in India.
"During 2001, half of the 20 major music labels in Bollywood stopped. The year came as a shock to the music industry," said Shridhar Subramaniam, president, Sony Music, India and West Asia. "But good times are here again as the industry is poised to grow 25-30% year-on-year."
What initially saved the domestic music industry was mobile value-added services or VAS. Besides consumers services such as ringtones and downloads, the royalty paid to labels by mobile operators for using their songs, also helped in increasing sales.
Then came the growth of digital albums. By the end of last year, several countries including India, US, Norway and Sweden, saw digital sales making up more than half of the music revenue kitty, the digital report said.
“First we all thought digital was killing music but it has saved music,” said Subramaniam.
“The real task for us is how to grow the music business and set a real goal of a billion dollars in annual revenues that we can achieve in the next decade," said Neeraj Kalyan, president, T-Series, which was once famous for cheap pre-recorded cassettes.
With over 500 labels releasing music in over 20 languages, India does offer a vast potential.
“We have been working hard to licence a range of services that meet the needs of consumers," said Devraj Sanyal, managing director, Universal Music India.
“India’s music tastes are changing and with consumers open to modern interpretations of old Bollywood numbers, many labels have started investing in this area,” said Subramaniam.