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Bollywood sings a different tune
Aparna Krishnakumar
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February 10, 2005

Film maker Yash Raj Chopra was never known to change music companies; the HMV-Saregama group acquired most of the music rights for his films. This changed in 2004 when Yash Raj Films launched a music business called Yash Raj Music.

Chopra is not the only film producer to have ventured into the music industry. Subhash Ghai's Mukta Arts [Get Quote] too has launched a music label. Sahara One [Get Quote] Pictures, a joint venture between advertising company Percept and Sahara Motion Pictures, too is poised to launch a music business soon.

So the music industry, which has more than its fair share of problems (audio piracy, radio stations don't pay it licensing fees), has another headache on its hands.

To be sure, India's film producers are only emulating what has been happening in the West. V J Lazarus, president of Indian Music Industry, which represents the interests of music companies, notes that some successful artists worldwide have established their own music labels.

The Beatles had a music company called Apple Corps; in 2002, Michael Jackson launched a record label called Neverland Records. Says Lazarus: "It is usually the very small or really successful artists who launch their labels."

In India too, film producers and directors like Vashu Bhagnani, Rajiv Rai and the Morani brothers set up music companies in the 1990s: Puja Music, Trimurti Music and Time Audio, respectively.

More recently, pop singer Daler Mehndi launched Seven Star Music. None of these ventures set the cash registers ringing hugely.

Why are Bollywood producers treading on ground that others had unsuccessfully covered earlier? In many cases, they're convinced that with their established credentials, they simply can't fail.

They believe that after film production and direction, entering the music world is only a logical extension.

Says Vijay Kumar, a former HMV marketing head who now heads sales at Yash Raj Music: "For YRF, the rationale behind the music division has been -- if we can handle the production, distribution and promotion of our films so well, we can handle the music as well."

The company has sold over two million cassettes and compact disks of music from its latest film Veer Zaara.

Mukta Arts also launched its music division with music from its latest film Kisna while film director Suneel Darshan announced his foray into music by setting up Shree Krishna Studio.

This released music from his movie Andaaz.

In the early 1990s, the Rs 1,000 crore (Rs 10 billion) plus music industry was considered a cash cow.

Music companies were competing fiercely to acquire music rights from filmdom, and film producers were paid huge amounts to ensure they did not switch music companies.

Music from movies like Dil to Pagal Hai, Kuch Kuch Hota Hai and Taal then commanded a premium of between Rs 1 crore (Rs 10 million) and Rs 3 crore (Rs 30 million). With CDs and VCDs not yet quite the rage, music companies invested significantly in acquiring music titles.

But by 2000, the music industry was singing a different tune. It ran into bad times, thanks to piracy, among other things. Sales dwindled to Rs 900 crore (Rs 9 billion) and have nose-dived again to around Rs 500 crore (Rs 5 billion).

Says Savio D Souza, IMI secretary general: "The levels of piracy have increased and so the pirated audio market today also is worth Rs 500 crore." As sales began to shrink, music companies became reluctant to pay a huge minimum guarantee as they did before.

Explains Kulmeet Makkar, vice president, sales and marketing, of the RPG group's Saregama India [Get Quote]: "While music rights for movies like Karan Johar's Kabhi Khushi, Kabhi Gham commanded a rate of Rs 11 crore (Rs 110 million), today the prices have been slashed to a tenth of that."

Music companies claim that they are unfazed by the entry of film producers on their turf. They argue that small music labels won't survive in the long run. And if Bollywood's moguls are trying to sell music directly to the public, says Makkar, it's because minimum guarantees are down drastically.

Although Kumar of YRF says that the company has done extremely well, music companies demur. Sniffs Makkar: "Two million cassettes and CDs are small beer -- 10 million of them with music from Yash Raj Chopra's earlier Dil to Pagal Hai were sold."

Secondly, the music business requires a wide distribution network, something the established music companies like T Series, Saregama and Sony-BMG have.

Film producers who have moved into the music industry are aware of this. And while some of them are starting from scratch, others are tying up with exiting networks.

So while Yash Raj Films has begun establishing a network, Mukta Arts has signed on Sony to distribute music from its latest film Kisna. Lazarus argues, somewhat self-servingly perhaps, that it's wiser for a film producer to tie up with a music company and access its distribution system.

Thirdly, music company executives underline the point that music companies offer listeners a wider variety of choice.

Yash Raj Music can bring to the market individual music titles -- a Saregama or T Series can offer music from two films at the same price or make a list of the best songs and sell the cassette -- the possibilities are endless.

That's why players are trying to promote not just their own labels but those of others as well. For instance, Yash Raj music has also chosen to distribute music from films made by other producers.

Still, new systems have cropped up in the music industry. Instead of offering film producers guarantees, it is offering to share revenue from royalty.

Saregama did just this for Mukesh Bhatt's film "Murder." It suggested an 80:20 royalty sharing. The music netted the film producers Rs 2 crore (Rs 20 million) in royalties. This, according to Makkar, is the way to go for the music industry if film music is to remain a viable business.

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