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Social media opens revenue stream for music labels

Last Updated 14 December 2019, 13:10 IST

Music labels such as T-Series, Times Music, Universal Music Group and Saregama are set to earn over Rs. 100 crore from social media apps, which have to pay a licence fee to them for rights to use music, according to a Economic Times report.

Industry experts say that music labels should earn Rs. 100 -120 crore this year from social media networks, which is a revenue stream that did not exist till last year.

In the report, a senior executive with a large music label said, "Facebook and Instagram have signed annual deals with most of the labels for their entire catalogues, while TikTok is being selective. Put together, these companies are spending over Rs 100 crore this year, out of which (spending by) Facebook will be close to 80%."

An Instagram source said the company was "ready to invest heavily for music rights", to offer more options to consumers and that it has global deals with top labels.

Many experts claim that music labels are likely to benefit as more and more people in India are getting exposed to various features on social media.

Mandar Thakur, COO, Times Music, said, "We are now in version 3.0 of music’s overall digital usage; first being mobile ring backs and downloads, second being streaming and the third being consumers expressing themselves using our music on open platforms.”

These apps are also helping music labels to promote their songs free of cost. Many songs on social media apps have become popular as influencers make or recreate videos using them, which leads to a variety of user-generated content on the same audio.

Vinod Bhanushali, president of media, marketing, publishing (TV) and music acquisitions at T-Series, said, "These apps are not just good revenue potential but also a promotional platform for us. These platforms take our music directly to consumers and more popular content gets more hits and further drives popularity.”

Prashant Puri, CEO of digital marketing from Adlift said that 80-85% of the campaigns on TikTok have licensed music in the background. "TikTok is also trying to get into the YouTube realm now with content on education and health, so that could be the rest 15-20%," said Puri. "But, with Instagram and Facebook also launching music offerings – and depending on the license fee and how deals are structured – music distribution companies are looking at these partnerships as a promising revenue stream."

"Influencers were very excited when the music offerings were launched on Instagram in September," said Ahmed Aftab Naqvi, co-founder and CEO of digital agency Gozoop. "Even brands like Swiggy, JBL and McDonald's have leveraged music offerings very creatively on Instagram.”

However, influencers on Instagram are not being able to edit, remix and pace the songs as can be done in TikTok. Bhuvan Bam, India's most famous YouTuber and influencer, said, "Platforms like TikTok use music like no one else. The cross-promotion of songs from TikTok to YouTube is massive. Music has universal appeal. A music piece on any visual would have more impact.”

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(Published 14 December 2019, 13:10 IST)

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