When music isn’t just about the note but about ‘notes’, too

Mumbai: In a shift mirroring a long-established trend in Western markets, a growing number of Indian composers and singers are launching their own music labels, signalling that music is increasingly being viewed as an asset class by both artists and investors, executives at independent labels, music licensing platforms and industry analysts said.

Most recently, Tamil composer Anirudh Ravichander launched Albuquerque Records, his own music label. Over the past six to seven years, at least eight prominent artists have set up similar ventures, including Salim Merchant, AR Rahman, Badshah, Armaan Malik, Sanjay Leela Bhansali and Arijit Singh. The move reflects a broader push by artists to retain control over IP and capture a larger share of long-term revenue streams.

“Over the past four-five years, India’s music industry ecosystem has become fairer and more transparent. Singers and composers have realised that music has become a very valuable asset class which they can monetise in different ways,” explained Gaurav Dagaonkar, co-founder and CEO of Hoopr, a leading platform for music licensing.

A favourable revenue structure involved in functioning as a label is a key reason why artists are launching their own labels.
“It is a great time to be an independent artist. Seven out of top ten songs on Spotify are non-film songs, which shows the growing importance of independent artists. By launching a label, an artist gets the share of labels in royalties. They also own perpetual rights to their creations. This is a better deal for them,” said Shivansh Jindal, CEO, Merchant Records, a label launched by Salim-Sulaiman.

Apart from streaming, publishing, licensing platforms, YouTube and other digital avenues, music labels earn revenues from royalties (from audio streamers as well). The revenue structure of royalty payment is as follows: 50% goes to labels, and the remaining 50% of royalty revenues is equally shared by composers and lyricists. Singers earn revenues from payments either by composers or labels and from concerts. When composers or singers launch their own labels, they earn 50% of the royalties earned by labels, in addition to their own share of earnings.

Labels fetch attractive valuations in the long run, music licensing players said.
“Today, PE investors and HNIs are interested in music assets. They want to now invest in intellectual property. And music is good for long-term monetization,” said the CEO of a leading platform for music licensing. “Labels, when acquired by PE investors, can generate 10 to 25 times RoI. Emerging labels are good candidates for acquisition,” he added. In launching one’s own label, artists gain creative freedom under their own labels.

“A label frees artists from constraints of film music. Independent artists nurture new talent through their labels. They give back to industry,” said Aditya Kalia, an independent music business professional.