The Hindu Business Line : Music industry shrinks by Rs 350 cr: CII-KPMG

AMID growth trends returned by the other main arms of the Indian entertainment sector, the music industry shrank by about Rs 350 crore over the last three years, a CII-KPMG study has said.

"In India, growing piracy and free downloads have reduced music buying. Consequently, the industry has shrunk to around Rs 1,000 crore from around Rs 1,350 crore three years ago.

"The silver lining is that though music buying from legitimate sources might have reduced, the delivery of music through new formats such as FM radio, Internet and mobile phones has actually increased interest in music," the CII-KPMG's report, titled `Indian entertainment industry Focus 2010: Dreams to reality,' said.

According to it, future growth for the music industry would come from non-physical formats such as digital downloads, royalty income and ring tones. The rollout of additional distribution platforms such as DTH, digital cable and IP-TV, with the growing popularity of large formal retail stores, will create many more channels selling music.

"Based on the current trends, the industry is expected to grow only moderately to (Rs 1,300 crore) in 2010. With the right technology and regulatory push to curb piracy, it has the potential of achieving double-digit growth," it said.

The entertainment sector — mainly composed of the television, film, music and radio industries — grew in value from Rs 19,600 crore in 2003 to an estimated Rs 22,200 crore in 2004. Television was the main driver, contributing 62 per cent of overall growth; films had 27 per cent while other segments such as radio, live entertainment and interactive gaming fetched the balance 11 per cent.

By 2010, the industry's receipts are pegged at Rs 58,800 crore. "However even with such growth, it could be just scratching the surface of the Indian market's true potential. ... The entertainment industry is now at an inflection point. The earlier phase of growth has run its course. Now the industry is ready to enter a second stage of growth powered by the twin engines of technology (availability of quality infrastructure and accelerated penetration of digital connectivity) and an enabling regulatory environment," the report said.

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