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Audio OTT contributes 70% to music industry revenue: Deloitte-IMI

FE Bureau
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Audio over-the-top (OTT) platforms contributed about 70% to the total revenues generated by the domestic recorded music industry in calendar year 2018. Revenues from streaming increased to $109 million in 2018 from a little over $30 million in 2014, according to a recent Deloitte-IMI (The Indian Music Industry) report.

India's audio streaming market is divided among domestic players JioSaavn, Gaana, Wynk and global players Spotify, Amazon Music, Apple Music and recent entrant YouTube Music. As per a consumer insights survey conducted by IFPI in 2018, an average internet user in India spends 21.5 hours every week listening to music, higher than the global average of 17.8 hours.

Content forms the bulk of an OTT player's cost. Audio OTT players pay a hefty licence fee to music labels for the content they source from music labels.

Earlier this year, the government released the draft rules to amend Copyright Act 2013 that proposed to extend the application of section 31D of the Copyright Act to OTT players. Bringing OTT players under its purview would mean that copyright owners will no longer be able to freely negotiate the rate of royalty for the content sourced by the players from them. Also, it will do away with the need to form a licencing agreement with copyright owners.

Speaking at the launch of the report, Vikram Mehra, chairman, IMI and chairman, SaReGaMa, said, OTT players and record companies should be allowed to freely negotiate the terms and quantum of licence fees as streaming industry is the primary source of revenue for music labels. Section 31 (d) is a "threat", Mehra said.

In 2018, the recorded music industry is estimated to have clocked total revenues of `1,068 crore, according to IFPI global music report 2019. During the year, television broadcasters earned `2,850 crore in revenue from recorded music, radio sector earned `2,170 crore from recorded music while music added `2,090 crore in the film industry's revenue kitty, the report said.