Excerpts:

You have made many contributions to the Indian music industry. What are your thoughts at the current market scenario?
There is still a lot to be done. If one moves from zero, it’s not difficult to say you’ve covered a 100%. But where are we in terms of what we’re actually doing in terms of music? I think the industry is shrinking.

The industry has no value left in it and that is a concern. If you look at the west, the entertainment industry has two very distinct parts – films and music. Here music is only a part films. Hence there’s a lot that still needs to be done for music. We need to promote music and artists to bring it to a level where it is a substantial industry.

When you say a lot still has to be done, what exactly do you mean?
From Rs 12 billion (Rs 1200 crores) some years back, the music industry now has shrunk to something like Rs 5 billion (Rs 500 crores). So there is a huge task ahead in terms of monetizing it. Music is being downloaded and exchanged for free by consumers, yet we hear that more people are listening to music because the media and formats are fragmented. We need to first address that to see if we can start earning money from these formats.

Secondly, the industry at some point needs to get behind non-film music. The dependence of film music is a trading business and has nothing to do with music. My contention is that if film producers went to any FMCG companies, they would get much more money and their music would reach more people than by coming to the music industry. It’s just a habit because at one point there was one music company and then the number grew. Producers used to toddle up to music companies because we had the ability to manufacture and distribute. However, today you can manufacture music anywhere. I can do it on my laptop and the internet distributes it for you. The producer is only interested in making money and wants his promo played on television at a cheap rate so that he can get an opening for his film.

Moreover, when cassettes were around, we used to sell almost 15 million units, today that number has shrunk to under 500,000. Music companies are buying rights at exorbitant prices not on the basis of the music itself but on the basis of the actors starring in the movie. Even marketing music is not going to make people rush out and buy the CDs.

Isn’t that often the case, especially as a brand building exercise?
For whom? Consumers don’t buy music seeing the music company label. Ultimately the consumer is rejecting the content, irrespective of the fact whose label the music is on. When you have a hit, the content will sell on any record label. The brand is the product. While a Pepsi makes cola through the year, we too make music every single day. The problem is that after a film is out of the theatres, we chop that area off. That’s not what the music business is about.

Somewhere as an industry it started on a right note. Are we now going backwards?
Some music channels today have stopped playing non-film music. They now only play film music or reality shows. International music sales have vanished. We have not seen a 20,000 seller in the last two years because nobody supports that form of music. Music channels, which helped grow the music business to selling 800,000 units for the Vengaboys album, today don’t support that form of music.

While you say that the channels are not supporting it, is it possible that the consumer is not out looking for it and hence the stance?
Of course the consumer wants it. I read in the papers about Alison Moyet’s new album and went to the stores to buy it. I didn’t find it and so I asked the record company if they put the album out. They didn’t even know what I was talking about. I happened to travel abroad, went to a store and the music was all over the place. Now if I had not read about it, if I had been sitting and watching one of the music channels I would have not even known about it.

Today labels want to invest money only on stars. There is no support for a young and upcoming singer.

Even television channels are reluctant to play independent artists’ videos as most of their FCP is occupied by film content. We are a film-mad country. There is a need to break into the clutter. However, if everyone is going to withdraw their hands, it will never happen.

So where do you see the solution in this?
I don’t know the solution. What we have been talking about is the fact that we need venues for artists to perform. There is already a movement happening with the young bands coming, but there is no money in that. One day AIG or Live Nation will decide to come into India and will take over the reigns and do a great job.

We could do it too but we are stuck in the filmy rut and it’s sad. If tomorrow our top actors decide to retire, our industry will collapse. We refuse to build stars. It’s not that we don’t have the artists; we just don’t have the opportunity. The only way to build an artist is to get serious media behind it.

Are you suggesting that creating new brand entities in the form of singers is perhaps the way forward to doing something about the music industry?
Absolutely! There are many good singers. There are about 300 Hindi films made, which have music. The priority of these movie producers are the top league music directors. Only when they are not available, do they go looking elsewhere.

Moreover, in a country where everyone is going gaga over music reality shows; where are the new singers? These shows are more about melodrama than talent. Which one of those voices has actually become someone that people look up to? Let’s not confuse ourselves between looking for talent and television shows.

How does embracing the online space work for the industry?
At Saregama, we do business of Rs 50 – 55 million (Rs 5 – 5.5 crores) a month. What are we selling? We have no big films! We have good music, which people are still buying. As the options are increasing, we need to make music available on more formats. Our job is to sell music in any format the consumer wants.

Three – four years back, the ringtone market was huge. Today, the market is about 7-12 per cent of the total mobile market and this is due to technology and sharing options like Bluetooth etc. Technology will only always enable the consumer. On the online front, we are moving to a subscription model where consumers can subscribe to a site and get the music. Let’s not get into piracy because it is going to plague us forever.

On the internet, hardly anyone buys music. I asked some 50 odd people about when was the last time they bought a CD. Only three of them said they had done so recently but those were pirated. What the industry is trying to do is engage with the likes of YouTube and MySpace to get a percentage of revenue, which is great. I think that a few years down the line all music will be free on any device that one wants it in.

That said, online is a great marketing tool. There is a huge community out there who one can’t talk to through a conventional store. However, the problem is that we haven’t been able to monetize it the way we could or should on the internet. The only reason why we haven’t been able to monetize it is because it’s available for free on a lot of websites; so why will the consumer pay for it?

So where is the revenue?
Perhaps the revenue lies in merchandising like an exclusive T-Shirt or an autographed CD. The way people will spend money to own a music property will change. However, it’s still early days but these are the initiatives that need to be taken. Today, you cannot dictate to a consumer the format he should consumer the music it.

Avril Lavigne’s manager Terry Mcbride did an innovative thing when he dubbed her first single of her third album in seven languages and distributed on the internet for free. He asked people to mix it in the way they wanted it and send it back to him. If he liked it, he would include it in the record and pay them a percentage. It really worked. I am not saying it is a solution, but it is interesting.

But then there’s the pressure of doing something new each time.
Of course, that’s the business. But the problem with this industry is that everything is marketed the same way. The first time I do something new, it is marketing. After that it becomes the norm!

Cut a thirty second promo, get 20 radio stations to play it and do interviews and the marketing is done! That’s not marketing! One needs to understand the product, live with it, know where the consumer is and how to reach him.

Where does Saregama India feature amidst all this?
We took a few decisions a couple of years back and now with the financial meltdown, in hindsight those decisions were very good for us. Most of our experienced people left the company and we had a very tough time building back. Training new people takes time.

The first decision we took was to stay away from film music and concentrate on selling our catalogue. If we did that we could manage to make a successful amount of profit in a year. However, the problem in doing that was that in five years we would have become irrelevant.

I personally have great faith in artists and non-film music and there’s a great opportunity in it. Hence we are moving into that space. I believe there is a global market for our music, which has not been tapped yet. We still try to sell our music in vegetable stores abroad and the Indians go and buy it. That’s not the way to do it.

As the first step, we got the City of Birmingham Symphony Orchestra and paid a tribute to Mohammad Rafi with Sonu Nigam singing his songs. We held three concerts in Birmingham, Manchester and London. Sony telecast the show and it was received well. What we tried to do is repackage the music and take it to an international audience. We will be doing concerts and creating other properties through this. My dream is to get every artist to do 200 concerts a year. It can be worked on a 50:50 revenue share between us and the artist. That has massive potential as a business.

By selling all music related products, what exactly happens to the music itself?
If the consumer wants it free, then that is the model. As the generation changes, the concept that – ‘This is something that needs to be paid for’ – will also change. The consumers are willing to pay for everything else and what is creating that is music.

Instead of one, now it’s a two step process. The one step business was to come out with the music and sell it on a format. A simple example is the Sonu Nigam concert. We sold the rights to Sony to telecast it and now if someone wants to come out with the DVD, we have to be open to it. We can’t be resistant to change.

Has fragmentation of platforms made the job tougher?
We’re not going to cry hoarse about CDs and cassettes not selling. We’re here to create a property that the consumer likes. From selling it on two formats, we now have to sell music in 200 formats; from talking to two TV channels, we now have to talk to 2000 channels not to forget print, radio etc. The scope of the job has expanded and monetization is becoming difficult because there is no one single format that is driving sales and unlike old times one can’t sit and figure out the expenses because the logs for each format come in at different times.