Media & entertainment

Music

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AI anchor Sana
 167

Executive summary
Indian audiences continue to have a strong engagement with music. Film music leads consumption, primarily through
music streaming. However, the live events space made a strong comeback. Digital music consumption continues
to rule, recording a majority of the music industry’s revenues. We expect to see consolidation in the records labels
space. Technology will continue to play an important role in the music industry in the coming times.

Music segment revenues ► The

► Indian music segment grew by 10% to reach INR24
billion in 2023, slower than previous years as certain
music OTT platforms went pay and stopped or reduced
37
their free services
► Film music comprised 64% of total music consumption,
28 but artist-driven music continued to grow and reached
24 27% of the total music consumed in 2023 ►
22
► Digital revenues grew 9% in 2023 and accounted for
87% of total music segment revenues
► Music
► streaming had an audience of approximately 185
million. However, only around 7.5 million paid for a
subscription
► Revenues
► at a label level increased from INR25 billion
in 2022 to INR29 billion (net of taxes) in 2023, driven
2022 2023 2024E 2026E
by a growth in digital revenues of 17% and performance
INR billion (gross of taxes) | EY estimates
rights of 20%
► Publishing
► revenues reached INR8 billion to INR9 billion
► The
► music segment is expected to grow at a CAGR
of 15% to reach INR37 billion by 2026, on the back
of increasing digital revenues, the pay subscriber
base growing to 15 million and continued recovery of
performance rights as events and activations increase
in scale
 Media & entertainment

Music consumption
Indian consumers spent 24.4 hours Music consumption was led by film
a week listening to music1 music
► Indians
► continued to engage strongly with music in 2023, Digital listenership by genre
though the overall time spent dipped by 5% to reach 24.4
hours per week vs. 25.7 hours per week in 2022 Others 10%
64% Film music
► However,
► this was 18% higher than the global average of
20.7 hours per week
► A
► study of Indian music listeners reports that:
• 9
► 4% use a licensed audio streaming platform
Artist-led
27%
• 76% said that music is important to their mental music
health
• 74% discovered a new artist or music weekly
► However,
► 74% also use unlicensed or illegal ways to listen
to music, much higher than the global average of 29%

IPRS estimates | Uses extrapolations and pertains to data from select DSPs.

► 64%
► of consumption was film music, this has reduced
from ~80% three years ago as a more artist-driven
industry emerged2
► Artist-driven
► music comprised 27% of the music
consumed. Top genres enabling this include Punjabi
music, which is now gaining popularity internationally
► 2023
► marked the first time an Indian artist, Diljit Dosanjh,
performed at the Coachella Valley Music and Arts Festival
in California, bringing Punjabi artist music to a well-
recognized global stage
► This
► has opened the door for international collaborations
as well. Music artists in India have started to create at the
top international levels, which has improved the quality
of music. Indian artists have released singles along with
international artists such as:
• Hass Hass by Diljit Dosanjh X Sia, an Australian artist
• Palpito by Diljit Dosanjh X Camilo, a Columbian artist
• Maan Meri Jaan by rapper King which got
re-launched featuring Nick Jonas
► Other
► genres consumed were devotional and folk songs,
which comprised ~10% of the consumption
► Approximately
► 10-15% of all digital music streams
pertained to international music

1
IFPI “Engaging with Music 2023”
2
Industry discussions
 169

YouTube remained the platform of Live events and concerts made a

choice for music consumption comeback
► Live
► music events came back with a bang this year with
Subscribers Video views
Rank online ticketing sites flush with music events every
Label Millions Label Billions week

1 T-Series 255 T-Series 241 ► The

► biggest spectacle was Lollapalooza, which had
its inaugural Indian edition in January 2023. The
2 Zee Music 103 Zee Music 62 multi-genre festival had over 40 artists — a mix of
international and homegrown and resulted in a footfall
3 Shemaroo 67 Wave Music 41
of over 60,000 in two days. It is on track to break-even
4 Tips Official 62 YRF 38 by its third edition in 20256

5 Wave Music 60 Tips Official 35 ► This

► set the tone for the rest of the year with an
impressive line-up of international artists who made
Social Blade as of December 2023
India part of their world tours in 2023, such as
Backstreet Boys, Rema, John Legend, 50 Cent, Deep
► As
► the top ad-based music OTT platform, YouTube Purple, Westlife, Goo Goo Dolls, Bastille, Kodaline, and
continued as the preferred platform for music more7
consumption, with an estimated 2.2 trillion streams3 ► Indian
► artists are still warming up to tour culture;
► Four
► of the top 10 most subscribed YouTube channels in currently one-off gigs and festivals are still more
India are music channels4 common. However, listeners are primed for a more
dynamic events line-up, and this can be leveraged in the
► T-Series’
► YouTube channel is the most-subscribed
coming years as the sector evolves
YouTube channel globally4

Hindi and Bhojpuri music accounted

for 70% of the music consumed5
Digital listenership by language
Others
8%
70% Hindi and
Punjabi 8% Bhojpuri
South Indian
languages
14%

IPRS estimates | Uses extrapolations and pertains to data from select DSPs

► The
► balance 30% was split across Punjabi (8%),
Tamil (5%), Telugu (5%), Kannada (3%), Marathi (2%),
Malayalam (1%), Haryanvi (1%), and others (8%)

3
EY estimates
4
Social Blade as on 28th December 2023
5
IPRS estimates
6
https://www.livemint.com/companies/news/lollapalooza-india-is-on-track-to-break-even-next-year-bookmyshow-11706165616886.html#:~:text=%E2%80%9CLol-
la%20will%20break%20even%20by,%E2%80%9C%E2%80%A6
7
https://www.gqindia.com/entertainment/content/backstreet-boys-bonobo-4-big-upcoming-international-acts-to-check-out-in-india
 Media & entertainment

Monetization
Digital revenues were 87% of the Digital revenues grew 9%
total music segment
► Music
► streaming apps had a base of approximately 185
Break up of music segment revenues million active users8
► Of
► the above, the paid subscriber base grew
4% 1%
significantly from 4 million to 5 million in 2022 to
Sync approximately 7.5 million9 in 2023
Physical
8% ► After
► Gaana in 202210 , Resso announced a shift to
Performance SVOD exclusively11
rights
► Spotify
► introduced further listening restrictions to free
users in India – they will no longer have the ability to
play songs in a particular order in a playlist, repeat
tracks, return to previous songs, or move to a specific
part of a song to listen to12
► Digital
► music revenues (including YouTube) increased
87% almost 9% in 2023 to INR18 billion, ~77% of which was
Digital advertising driven
EY estimates | At end consumer prices | Does not include electronic products
with embedded music

► Digital
► garnered 87% of music segment revenues,
comprising revenues earned on music streaming
platforms, YouTube, short video, and social media
platforms, and from telecom operators
► Sync
► and performance rights held on to their share of
overall revenues

8
Comscore
9
Industry discussions, EY estimates
10
https://musically.com/2022/09/12/gaana-ditches-free-streaming-in-favour-of-paid-subscriptions/
11
https://techcrunch.com/2023/05/04/bytedance-is-making-its-music-streaming-service-resso-premium-only/
12
https://www.newsbytesapp.com/news/science/spotify-introduces-listening-restrictions-for-free-users-in-india/story
 171

Revenue for music labels increased Content acquisition costs

by 17% skyrocketed
► Competition
► to acquire Tamil and Telegu music has
Label revenue growth over 2022
increased the price of audio rights

Performance rights 20% ► Two

► years ago, one of the highest prices for a Telegu
film’s audio rights were INR45 million for Mahesh Babu’s
‘Sarkaru Vari Paata’17.
► Other
► high-value sales included RRR (INR250 million),
Overall 17% Saaho (INR220 million) and Baahubali 2 (INR100
million)
► In
► 2023, ‘Pushpa: The Rule — Part 2’ was sold for an
estimated INR650 million18
Digital 17%
Music publishing revenues grew to
INR8 to INR9 billion
Sync 14% ► Music
► publishing revenues have been on an upward
swing on the back of international music OTT, social
and short video platforms entering into licensing
IMI, EY estimates agreements with the IPRS as well as independent music
publishers
► Revenues
► at a label level increased from INR25 billion
in 2022 to INR29 billion (net of taxes) in 2023, driven ► Domestic
► businesses also started complying with
by a growth in digital revenues of 17% and performance publishing licence requirements during 2023, notably
rights of 20% Sony, Zee, etc.

► Share
► of label revenues attributable to digital were 90%,
and they also contributed 90% of the absolute revenue
growth for labels

Some short video platforms

struggled
► After
► a peak in domestic short-video platform usage
in 2021, daily active users have been on a downward
trend13 , out-competed by international players, such as
Instagram Reels and YouTube Shorts14
► Several
► platforms have seen scaled-down business
verticals, founder exits and complete shutdowns as well
► Sequoia
► exited its investment in Trell at a loss of 78%15
► This
► has impacted music monetization for record
labels with platforms reconsidering renewals of music
licensing contracts in an attempt to curb costs16

13
https://inc42.com/features/india-short-video-apps-social-media-wasteland/
14
https://inc42.com/buzz/short-video-platform-tiki-shut-down/
15
https://inc42.com/features/sequoia-exits-trell-massive-loss/
16
Industry discussions
17
https://timesofindia.indiatimes.com/entertainment/telugu/movies/news/mahesh-babus-sarkaru-vari-paata-audio-rights-sold-for-a-record-breaking-price/article-
show/84901752.cms
18
https://www.news18.com/entertainment/telugu-cinema/pushpa-2-audio-rights-sold-for-record-price-a-new-feat-in-indian-cinema-7712443.html
 Media & entertainment

Future outlook
We expect the music segment to Record labels will continue to
reach INR37 billion by 2026 consolidate
► We
► have seen several deals in the music segment as
Music segment revenues
larger labels consolidate their holdings across language
37 markets, and we expect this trend to continue
► This
► will improve monetization potential through digital
streaming, help bring more genres and regional music
28 to the mainstream market and strengthen labels’ ability
24 to invest in artists and creators

Rights values could remain elevated

► The
► entry of several global music labels and publishers
in India, as well as the improved performance of
theatrical films across languages, are expected to keep
music rights values at their current elevated levels in
2024 and perhaps into 2025
2023 2024E 2026E
INR billion (gross of taxes) | EY estimates

► We
► expect the segment to grow at a CAGR of 15% over
the next three years to reach INR37 billion
► Growth
► will be driven by expansion of the smartphone
base as the next 100 million users get access, growth in
the SVOD base, more music concert revenue, increased
reach of social media, growth of YouTube, as well as
increased international consumption of Indian music

Paid subscriber base could reach 15

million by 2026 or 2027
► While
► subscriptions are not significant at present, they
are the future, since OTT platforms cannot sustain
providing free or ad-supported music
► The
► market has the potential to grow the number of
paid subscribers to 2-2.5x their current volume in three
years (15 million) and four to five times in five years (35
to 40 million)19

19
Industry discussions
 173

#Reinventing music
Create new artist discovery Focus on collaborations
methods
► As
► music acceptance and experimentation increase,
► We
► expect that the share of artist-driven music will the number and type of collaborations can help cross-
continue to grow and contribute around 40% of pollinate fans, both globally as well as locally
consumption by 2026-202720 ► Local
► collaborations across languages as well as genres
► Crowdsourcing
► original music for OTT and film content can create a new variety of music, as well as be the
can bring about choices, and provide chances to young foundation for many entertainment/ reality shows
and fresh talent

Bundle, and keep on bundling

Enable infinite artist life
► Bundling
► music with video and news OTT products, D2C
► The
► ABBA Voyage Tour used virtual avatars of the brands, newspapers and magazines, ISP subscriptions,
iconic band to perform “live” in front of 3,000 people etc., can significantly increase the scale of paid
everyday, generating US$2 million every week over 15 subscribers
months21
► 45
► years after The Beatles disbanded, a single was
released using AI to clean up an old demo of John
Market music via games
Lennon’s voice22
► A
► survey conducted by us indicates that 48% of gamers
► AI-driven
► voice models can recreate any song in the spend over an hour a day playing games
voice of any artist, as well as create original music
► The
► opportunity to bundle background music along with
► With
► appropriate regulatory guardrails, these game play can provide a significant opportunity
innovations can enhance the listener experience and
improve monetization prospects
Do AFPs Ab Initio
Go for the superfans ► As
► the influencer marketing industry grows, the music
segment can provide a scalable set of musicfluencers
► Artists
► will attempt to keep their fans engaged through for brands to partner with
their artistic life-cycle via deep engagement, building a
base of “superfans” ► We
► estimate the ad funded video production can reach
approximately 10% of industry revenues in four to five
► Superfans
► are often willing to invest more in their years
favorite artists, whether through purchasing concert
tickets, funding content creation, buying merchandise,
etc. Superfans also help create “virality” of content that
is necessary for gaining popularity
Find those one-song wonders
► Thus,
► they provide a foundation beyond streaming, ► Use
► of intelligence can help in identify music with a high
offering alternative income streams and ensuring chance of success, even if the creators are not yet well
artists can continue creating music known or have a fan base

Improve royalty collection OTT-driven music

► Web3.0
► has the ability to determine consumption in
► As
► connected TVs cross 30 million households, they
near real-time, and allocate revenue shares to relevant
have become a significant source of reach, and
publishers, authors and labels, which can create a high
including songs on OTT content can be a new mode of
degree of confidence in artists, and encourage them to
discovery
create more and better music
► CTV
► in conjunction with AI also can provide an
opportunity for custom music TV products viz. think
personalized MTV, with packaging to suit viewer tastes
e.g., song trivia, band information, video insights, chart
data, etc.
20
Industry discussions
21
https://www.bloomberg.com/news/newsletters/2023-09-04/-abba-voyage-tour-makes-2-million-a-week-with-an-avatar-band
22
https://www.cnbc.com/2023/11/02/a-new-beatles-song-is-set-for-release-after-45-years-with-help-from-ai.html
 Media & entertainment

Trends
Spotify India
Reach

70 Tier-I 7,500
million cities
Spotify users in India at the end A majority of the Towns in India where Spotify
of October 2023 streams for Spotify in was streamed between
(per Comscore) India come from here 2021-2022

Consumption Most popular Top genres

languages in India in India
Film
70% music Hindi Film music
(led by Bollywood)
Spotify India users’ The most popular category English
share of local music for music streaming, though Pop music
Punjabi
consumption, highest non-film music listening has (Hindi, Punjabi, Tamil)
among Spotify’s 180+ increased to an all-time high Tamil
markets in 2023 Hip hop across local
Telugu languages
(Punjabi, Hindi, etc.)

Spotify 2023 India charts

Top artists Top songs Top podcasts
1 Arijit Singh 1 King Maan Meri Jaan 1 Shrimad Bhagwadgita

2 Pritam 2 Kaifi Khalil Kahani Suno 2.0 2 The Ranveer Show

3 Pritam Kesariya 3 Krishna - The Supreme Soul
3 Anirudh Ravichander
4 Sachet Tandon Malang Sajna True Story Bro! with Triggered
4
4 A.R. Rahman Insaan
5 Shubh Cheques
5 Shreya Ghoshal 5 Mahabharat Gaatha
6 Jasleen Royal Heeriye (feat. Arijit Singh)
The Horror Show by Khooni
6 Amitabh Bhattacharya 6
Anirudh Monday - Scary Stories in Hindi
7 Chaleya
Ravichander
7 Alka Yagnik 7 The Ranveer Show (f► gUnh)►►
Phir Aur Kya Chahiye (From
8 Sachin-Jigar
8 Vishal-Shekhar "Zara Hatke Zara Bachke") 8 Ajay Bhalla
Agar Tum Saath Ho (From
9 Sidhu Moose Wala 9 Alka Yagnik 9 The Stories of Mahabharata
"Tamasha")
10 Udit Narayan 10 Chani Nattan Daku 10 The Joe Rogan Experience

Note: All data has been provided by Spotify India and is based on their research. It has not been validated by EY, and presented in summary form for
representation purposes only
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