VAS Conference, Mumbai: The Discussion On Music Industry And Mobile


The day two coverage of Infor-Media‘s two-day Value Added Services Conference which ended in Mumbai on Tuesday. Reported by Prashant Sethi.
Discussion moderated by Vijay Lazarus, President, Indian Music Industry
The music in mobile industry is about 2-2 -½ years old and the major issue which has proved to be a hurdle in its growth is transparency of content use and licensing. The current system is not transparent enough to ensure that the content owner has a fair idea of content use. Licensing includes music, video, audio etc for the benefit of music. Some 127 companies from the music industry have come together to provide a single window solution for licensing, this also ensures fairness to the right owner of the content. It also helps to make legitimate content easily accessible.
Discussion participated by
Vipul Pradhan, CEO, Phonographic Performance Limited
Taron Mohan, CEO,
Pankaj Sethi, Vice President- Content & Application, Tata Teleservices.
Taron: The data of content use by customers is not being shared by the operator. The content owner has a right to know how much and where the content has been used.
Pankaj: To look at the past, the music industry have been dealing with the entertainment industry, now though the entertainment industry has an organized approach to business, it lacks transparency (basically because the finance involved in the entertainment industry have various sources). But when it comes to telecom; these are large bodies and have documented reports which are periodically audited. The question of how much a content has been used can be easily answered and because of it being an IP industry, the question of where never arises.
Vipul: The music industry has a problem with the data that is being shared; also because it is not shared within a time bound system. The data about a particular content is provided as late as 6 months, which at that time looses its relevance. Again there is no partnership between the content owner and the service provider.
Pankaj: The music industry has to understand that while the entertainment industry has no reporting structure, the telecom industry is very system driven , if a download is done, simultaneously data about that download is generated. But yes, the sharing is not happening to the extend of satisfy the content provider.
Taron: It is time that the market moved from its current fragmented format to a more controlled way.
Vipul: We have to ensure right content is made available.
Pankaj: Data is in an early stage, its formats are still changing. The service provider’s issue is with the ‘value’ of content. We have an opportunity to decide with a lump-sum type of business structure or a revenue sharing model.
Vipul: As a society which represents the music owners, we believe in a revenue sharing per customer use model. It is not about ‘how much’ or value but we have to notice that a lot of different types of ownership is emerging and similarly revenue sharing also has to emerge keeping that in mind. If reports of consumer use of content are received as late as 6 months, the content owner looks at it as intent of not sharing.
Pankaj: I recognize that there is a lack of clarity from the service provider’s side but you have to understand that we are also confused, as this is just an initial stage and things are still unfolding.
Vijay: It is important to note that music on mobiles are a source of revenue for the music industry but this revenue is not large- and this fact is not just for India but applies worldwide. Physical format are still generating 95% of the revenue. The forecast for the coming year is that revenues generated by music on mobiles are going to be around 15-20%. Therefore music rights have a value in both realms.
Vipul: A copyright to music is complicated; there are multiple of rights involved. Ring tone right is a sub-set of music right.
Pankaj: What happens in terms of rights to playback a ring tone in a video format?
Vipul: Video is broken down to multiple formats having contracts with multiple people. It is a matter of individual contracts.
Vijay: Internationally there is a system of registering rights. This system helps in knowing who the right owner is and to whom it has been sold. India is soon going to be a part of this system.
Taron: We have also been exploring the possibility of bundling content.
Vipul: bundling of content has been proposed and has been forwarded to content owners. If there is a viability, why not!
Vijay: This provides a choice of content. Content is valuable and its value has to be determined.
Pankaj: A lot of discussion has been taking place on the topic of protecting content. If content is originally well protected and is made accessible faster and easier to the operators, I think that would help protect content.
Vipul: We would definitely look towards dismaying content faster.

We should start gearing up to it.
Vijay: Everybody in the model should share revenue as that will help everyone grow. There is a clear perception of the telecom companies that they are very number savvy but it is not a reality. If such enormous billings are done then why can’t these number can’t be made to flow backwards. There is some problem with the pipe.
Vipul: Things are improving. The systems were not tuned to deliver these answers but we are progressing.
Vijay: As for music, the issues of rights are very clear but for audio visual the rights are looked at as– right of ownership of visual, with the right of ownership of sound, with the right of ownership of the publisher comprise of the rights of a ring tone. Even when a producer sells the rights of a ring tone, revenue goes back to all.
Vijay: Soon there is an amendment coming, where the right of performer is also going to be bundled along with all rights already existing. (Performer meaning not just the singer but all other involved.)
One must understand that it is not a tariff but a price. You are buying a product and the owner sets the price. The richer the content, the higher the price that has to be matched.
Concluded…(Pls note that if any speaker or their conversation has been left out, it’s not deliberate.)
…Next Pankaj Mahindroo, National President, ICA

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