The 2009 KPMG-Ficci report on the Indian media and entertainment industry points out that the music industry has declined from Rs 830 crore (Rs 8.3 billion) in 2005 to Rs 730 crore (Rs 7.3 billion) in 2008.
Revenue from the sale of compact discs and cassettes that accounted for 87 per cent of the total turnover of the industry has dropped to 60 per cent. Piracy and the increasing trend of loading portable storage devices with unauthorised and unlicensed music have eroded the profitability of music companies.
Against this backdrop, Bhushan Kumar, chairman and managing director of the Rs 350 crore (Rs 3.5 billion) Super Cassettes Industries, the country's leading music company that owns the T-Series label, is gunning for platform-owners (television and radio channels, among others) who are making unauthorised use of his music.
Kumar, 31, spoke to Shuchi Bansal on the challenges facing the industry and his company's initiatives to keep its head above water. Excerpts:
In the last few months, why has T-Series been so relentless in its efforts to take legal action against people/companies making unauthorised use of its music?
In the changing paradigm, the revenue verticals are moving from traditional physical formats (cassettes and CDs) to non-physical formats and publishing which is a very important revenue stream for any music label to sustain growth.
T-Series has invested heavily in monitoring technologies and is very aggressive in protecting its copyright. We have taken stringent legal action against television channels like CNEB, India News, TV5, TV9, Focus TV, Hamaar TV and Doordarshan, and are further contemplating legal action against a few others.
Even dance and music reality shows cannot make use of music without the permission from the copyright owner. You can't play a CD on air and start dancing to its tune.
We set up the monitoring cell six years ago but we've been aggressive for the last three years. T-Series has invested in systems and about 200 people sit in Mumbai and monitor TV channels and radio stations 24X7 to prevent misuse of our copyright. There is another team of 180 people that is spread across the country to keep a vigil on piracy.
What are the main challenges facing the music industry today?
Monetisation of rights in an era of YouTube, Google, online piracy and free downloads is the biggest challenge for the entire entertainment industry. Piracy and royalty pay-outs by various entities are definitely major issues and we are working towards solutions while keeping the interests of all the stakeholders in mind.
Though new media formats have replaced the loss due to the decline in physical formats, the growth from these is yet to be seen.
For instance, in India, music companies barely get a 30 per cent share of the revenue from music sales such as ringtones, caller tunes and song downloads. The telecom operator keeps the balance 70 per cent. In developed markets like Japan, the ratio is the reverse. We are negotiating with the telecom operators.
Do FM radio channels pay royalty? How much do they contribute to the Indian music industry's revenue?
We are working very closely with FM radio in India and except for a few rogue channels, radio stations do pay up.
Though the radio industry has been seeking royalty relief at different legal forums, we are addressing this at an industry level. But as most of these issues are subjudice, it will not be prudent to comment on them.
However, the radio industry does not contribute more than 15-20 per cent to the total turnover of the industry. Royalty per song is low at approximately Rs 660 per hour. We buy music rights to a film for between Rs 5 crore (Rs 50 million) and Rs 8 crore (Rs 80 million) with about five songs. Each song costs us Rs 1 crore (Rs 10 million) and more.
T-Series seems to be working independently and not as part of any of the Indian music industry bodies like IPRS. Why?
That's not true. We support Phonographic Performance Ltd and the Indian Performing Rights Society's policy decisions from outside. The IPRS also looks after our ground publishing interests -- that is, music being played at restaurants, ground events and public performances.
We monitor the remaining media platforms like television, mobile and radio ourselves. That's because IPRS has a huge workload and it may tend to get a bit liberal at times with such infringements.
We have now set up a separate team for monitoring digital music as well. The focus is on websites. Action has already been initiated against YouTube and Yahoo Video. We are now targeting the mobile stores which sell unlicensed music to mobile phone customers. The store owners zap the music from a CD onto a chip for the mobile user.
How would you rate T-Series' performance when the overall industry is shrinking?
The music industry is in a very bad shape. There is no growth.
But it is a worldwide phenomenon. If we are able to maintain our profitability, it is because of our old devotional song catalogues including Mata ki bhenten, aartis and Shiv bhajans created by my father.
These are doing very well in the digital world. They work as ringtones and caller tunes. We make profit because of that.
But T-Series is supposed to have 60 per cent of the market and buys the majority of the latest music.
I have been at the helm for the last 12 years and have tried to build the company from where my father had left (it).
T-Series is consolidating its current position and is working towards further improving its majority market share. We have an aggressive acquisition strategy. Today, we do about 45 films a year.
This year's major music releases includes Kaminey (featuring Shahid Kapur), Jashn (a Mukesh and Mahesh Bhatt film) and the Salman Khan-starrer, Wanted, among many others.
We are also very bullish on the regional content front.
T-Series is already big in Bhojpuri, Gujarati and Marathi but not so much in the south Indian languages. We now plan to do Himachali and Kashmiri music.
Hindi films contribute 35 per cent to our total turnover, the rest comes from our devotional catalogues. Apart from music, T-Series is also producing a couple of films. We'll never be a film factory though.
Isn't it ironic that your father, the late Gulshan Kumar, allegedly violated copyright laws to build his music empire and now you are leading the battle against piracy and copyrights infringement?
My father never violated any copyright laws. He created cover versions, that is, he got new singers to sing popular Hindi songs to build his music empire. This was permitted under the law and he did not do anything illegal.
In fact, he gave a chance to a host of new singers. For instance, Anuradha Paudwal sang Lata Mangeshkar's songs while Sonu Nigam sang Mohammad Rafi's numbers. He also gave a platform to singers like Kumar Sanu and Babul Supriyo, among others.
It was only later that the law was amended. Even now, cover versions are allowed but after two years of the release of the original albums.
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