With revenues up 26% in 2016, music industry on a song, says IFPI study

The country’s recorded music industry revenues grew by as much 26 per cent in 2016, helping it grab the 19th rank worldwide in sales.

It outgrew the global recorded music industry, which saw a modest growth of 5.9 per cent in 2016.

This was revealed in a report released by the Indian Music Industry (IMI) on Monday, called the Digital Music Study 2017, a consumer study conducted for IFPI (International Federation of the Phonographic Industry) by research agency Ipsos Connect.

According to the study, the Indian music industry’s revenues growth was propelled by streaming revenues that contributed about 47.5 per cent to the total revenues.

“Physical sales dropped to just 11.4 per cent and synchronisation grew over five times to 14.7 per cent,” the report stated, adding that “digital piracy, however, remained the most popular way of consuming music.”

In a statement, Blaise Fernandes, President and CEO of IMI, said: “The global recorded music industry grew modestly by 5.9 per cent in 2016, whereas India witnessed a 26 per cent growth in 2016. The IMI certainly views the glass as half full. The rapid penetration of smart phones in the country combined with the revolution of 'cheap data' is the transforming factor in encouraging Indian users to consume streaming services which will benefit the Indian music industry. Streaming services also offers opportunities for Indian music to be discovered globally.”

The Indian Music Industry (IMI) is the apex body that represents the interest of the music companies and record labels in India.

It is an IFPI affiliate, which is a global representative of the recording industry.

Twin challenges

The study pointed the twin challenges that threaten the sustainability of domestic and international record companies.

It said that there continues to be a “big value gap”, which refers to the growing mismatch between the value that user uploaded services such as YouTube extract from music, and the revenues returned to artists and record companies. In addition, it pointed out that internet piracy, which is used by 94 per cent of the users to obtain music in India, continues to be an industry-wide threat.