The Indian Music Industry & SaReGaMa
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The Indian Music Industry & SaReGaMa
MG 785: Group Project
Aditya Banerjee - 08927850
Phani Raj- 08927896
Pramit Joshi- 08927815
Shishir Pol- 08927808
Sushant Waghmare- 08927827
Vasant M V- 08927807
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Agenda
Music Stakeholders – Labels, publisher, online,
KE concepts – Commons, New Business Model, Technology
Current Online trends – Global
Current Indian music scenario
New Biz Models
Sustainability
Reference
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Music Stakeholders
Artist
Professional Musician
Labels
Recording Studios
Event Managers
Consumer
Regulators
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Uti lizati on of KE Concepts
Creative Commons
Copyrights
Technology as Enabler
New Business Models
Long Tail
Social Networks
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SaReGaMaThe Company
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Licen
ce Fe
es
Audio Compact Disc
s
Free C
ommercial
Time -
TVDVDs
Pre-Reco
rd. C
assett
es
Others
Distrib
ution Rights
Video CDs
05
1015202530354045
Composition of SaReGaMa's Revenue
2009 2008 2007
% o
f Sal
es tu
rnov
er
Licen
ce Fe
es
Audio Compact Disc
s
Free C
ommercial
Time -
TVDVDs
Pre-Reco
rd. C
assett
es
Others
Distrib
ution Rights
Video CDs
0
10
20
30
40
50
60
Sales Value in Crores
2009 2008 2007
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Rati o Analysis - SaReGaMa
Music Industry (INR bn) 2005 2006 2007 2008 CAGR 2009p 2010p 2011p 2012p 2013p CAGR
Physical 7.25 6.34 5.55 4.86 -12.5% 4.37 3.93 3.54 3.19 2.87 -10.0%
Digital 0.86 1.11 1.44 1.88 30.0% 2.44 3.22 4.19 5.24 6.55 28.4%
Television and Radio 0.21 0.26 0.32 0.39 22.5% 0.46 0.56 0.67 0.78 0.92 19.0%
Public Performances 0.03 0.07 0.12 0.17 75.3% 0.21 0.25 0.29 0.33 0.38 17.0%
Total Industry Size 8.3 7.8 7.4 7.3 -4.4% 7.5 8 8.7 9.5 10.7 8.0%
Ratios SaReGaMa TipsIndustry (Whole Content provider)
Mar-09 Mar-09 Mar-09Debt-Equity Ratio 0.35 0.46 0.19Long Term Debt-Equity Ratio 0.07 0.4 0.13Current Ratio 0.99 3.46 1.63Fixed Assets Turnover 1.2 4.51 0.48Inventory Turnover 5.61 1.18 4.11Debtors Turnover 4.3 6.97 3.44Interest Cover Ratio 1.47 7.14 4.42PBIDTM (%) 9.16 24.91 19.88PATM (%) 1.32 17.69 6.1ROCE (%) 5.01 13.94 4.35RONW (%) 1.46 15.34 2.41
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Financials – SaReGaMa/Tips
Income f
rom Fi
lm Pro
dn & Disb
n
Royalty
recei
ved
Compact Disc
Pre-Reco
rded
Audio Cassett
es0
20406080
100
TIPS sales
200920082007
Income f
rom Fi
lm Pro
dn & Disb
n
Royalty
recei
ved
Compact Disc
Pre-Reco
rded
Audio Cassett
es0
20
40
60
80
TIPS % of sales turnover
200920082007
39%
34%
10%
5%
3%3% 3% 2%
Revenue break up - SaReGaMaLicence Fees
Audio Compact Discs
Free Commercial Time -TV
Digital Versetile Discs
Pre-Record. Cassettes
Others
Distribution reights
Video Compact Discs
Jan/05 Jan/06 Jan/07 Jan/08 Jan/090
20
40
60
80
100
120
140
160
Changing times for SaReGaMa
Net Sales Operating Profit Adjusted Net Profit
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Reactions down the memory laneDisruptive technologies & copyright
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Technology Innovati ons
And parodies…
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Copyright for the masses
1906 2004
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The Enforcers
MPAA
USA Canada Australia
UK International India
Entertainment Industry associations around the world
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Creati ve Commons
“The commons” — the body of work that is available to the public for free and legal sharing, use, repurposing, and remixing.
Standardized way to grant copyright permissions to their creative work.
“All rights reserved” to “Some rights reserved.”
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What Creati ve Commons Off ers to Music business?
Promotion to the artist and his records
Allows artists to reach larger audience
Build upon reputation
Foster interaction between music members
Encourage artistic and future exchange
Freedom from economic pressure of big companies in releasing any kind of work
Bypassing traditional distributors and publishers
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Will it change the face of music business?
Relationship between the parties involved in the music business
Artists are dependent on the work of others
The internet not creative commons makes disintermediation or cutting the middle man
Creative commons is all about skipping the intermediary
Only small record labels have agreed to license their work under the creative commons model
Big record labels already have a established system with lots of artists and work of art with them with market reach
Big record labels make a lot of money out of the current copyright system
Creative commons model will jeopardize their present business model , revenues and even their existence.
Stakeholders not yet clear how creative commons model will fit within those agreement signed previously.
Creative commons model is helpful in limited situation and not in all
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The International SceneTechnology as the enabler
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Online Music Stores
Major license
revenue for labels
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Music Streaming
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Portability
The Good Enough Revolution
New Devices
New Media
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Online Radio
Major opportunity to recommend & guide users
to purchase channels
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E-merging trends
Music recommendation engine acquisitions
Game changers
Search & recommendation
the key
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The Indian ScenarioTechnology followers?
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Music Streaming
Revenue from licensing
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Music Downloads?
Where are the legal sources?
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Amateur Publishing
• Crowdsourcing• Commons• Social Networking• Prosumer friendly
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Personalizati on Services
Multiple revenue sources: License, service charges, partnership
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Mobile Downloads
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Mobile Music Exchange
Growing demand for music content on mobiles
Indian Music Industry (IMI) launched Music Mobile Exchange (MMX)
MMX a 7-member body comprising SaReGaMa, Aditya Music, Tips, Venus, EMI, Sony and Universal
MMX license - mobile stores/shopkeepers can legally sell music without violating the Copyright Act
MX licence - for a period of one to three years, at a minimal cost of Rs 1500- 5,000 per month per computer
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The Value ChainEvolution over the years
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Past
Produce Manufacture Distribute
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Present/Future
ProduceConsume• Also producers
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Where’s SaReGaMa?Technology leader/follower/laggard?
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SaReGaMa.com over the years
Source: http://web.archive.org/web/*/SaReGaMa.com
1997 20012004 2006 2009
Focus seems to be on Hamaracd.com
rather than SaReGaMa.com
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SaReGaMa on iTunes Store
License revenue
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Hamaracd
Personalised Audio CD
Video Catalogue
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rajshri.com
Some Partners
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Business ModelsPutting it in action
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Key Observati ons
Copyright infringements still a major worry
Key revenue streams online
Advertisements
Licensing
Value added services
Freemium models quite popular
A large user base is the best asset online
Long Tail can be manipulated
Fattening
Recommendations
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Business Model Ideas
Policy to give away old tracks/single track from new albums under a CC license
Generates publicity
Draws people to channel
Charge for remastered/modified tracks (Classics’ Revival etc)
Subscription based streaming service
Purchased tracks remain in the cloud
Multi device applications to play purchased tracks
Allow DRM free downloads of purchased tracks
TV channel
Store with studio
CSR: Sponsored music labs in schools
Bands & Artists under the SaReGaMa umbrella
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Music from the CloudsBusiness Model 1
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Do P2P users buy more music?
Caveat: Survey relies on consumer recall & accuracy of information
Studies conducted by CRIA & in UK indicate that people who download music illegally from the internet spend more on music purchases than or equivalent to those who do not
Can it be extended to
India?
UK Study
CRIA Study
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Some numbers – iTunes Store Sales
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Music from the cloudsSaReGaMa Online
Service
Individual ConsumerCorporate
Partners
Price:Rs 10-15 per track (PPP$)Subscription services
Promos:• Reward points• Discounts
Special terminals at outlets to customise service as per customer’s needsMedium of customer’s choice: USB, CD, DVD etc
Alternate pricing strategies:• Pay what you like• Demand based ~ airline tickets
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SaReGaMa BandsBusiness Model 2
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Music Band Touch points
Pro Conce
rts
•National Level Artist•Huge Promotion •Revenues: Sale of ticketsLocal
concerts
•During festivals (local, College)•Corporate celebrations•Promotion: By organisers • Consumer: Invites sent by organiser, usually does not pay
Private Concer
ts
•Marriage parties, Business Hotels, Cruiz , etc•Promotion: At the discretion of the host•Revenue: Host family pays•Consumer: Friends and Family
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SaReGaMa BandSigns up
contracts with local Bands
Infrastructure sharing
Easy search for Consumer
Quality and standardisation
Steady income flow from
performance
Event locations can also double
up as POS
Band Members paid per
performance
Band members promoted through
SaReGaMa Network
SaReGaMa taps a larger audience and
an alternative revenue stream
Regional Band which grow in popularity can
compete at national level
SaReGaMa gets a steady stream
of content
Win win situation for all stake holders
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What’s in it for a Music Band?Financial/technical support from SaReGaMa
Co branding ,Possibility of making it big!!
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Consumers of Band Music
Assurance of quality
Value for Money
SaReGaMa Experience
Search time reduction
Professional Service
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How does it benefi t SaReGaMa?
Expands its networks of music
Commission on performances
Can promote songs under its label
Content Creation
Platform to distribute merchandise
Brand recall increase
Could get consumers to collaborate
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Image sources
Wikimedia.org
http://techperspective.com/?p=7
www.hamaracd.com
Flickr.com
http://www.loc.gov/exhibits/bobhope/images/vc36.jpg
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Reference/Links
http://www.indianmi.org/newsletter/Dec1/GurmeetInterview.html
http://www.indianmi.org/newsletter/November1/Subroto%20Interview.html
http://contentsutra.com/article/419-SaReGaMa-plans-online-music-store-whos-going-to-change-the-game/
http://www.rajshri.com
Ipsos MediaCT survey in UK: http://www.independent.co.uk/news/uk/crime/illegal-downloaders-spend-the-most-on-music-says-poll-1812776.html
CRIA study in 2006: http://support.crtc.gc.ca/applicant/docs.aspx?pn_ph_no=2006-1&call_id=29786&lang=E&defaultName=Canadian%20Recording%20Industry%20Association%20%28CRIA%29
http://www.wired.com/gadgets/miscellaneous/magazine/17-09/ff_goodenough?currentPage=all
http://arstechnica.com/tech-policy/news/2009/10/100-years-of-big-content-fearing-technologyin-its-own-words.ars
Indian Music Publisher’s Annual Reports
http://www.india-server.com/news/indian-music-industry-launches-music-7227.html