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, A.R. Rahman, Badshah, Armaan Malik, Sanjay Leela Bhansali and Arijit Singh. The move reflects a broader push by artists to retain control over intellectual property and capture a larger share of long-term revenue streams.


“Over the past four to five years, India’s music industry ecosystem has become fairer and more transparent. Singers and composers have realised that music has genuinely 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. Today, seven out of the top ten songs on audio streaming platform Spotify are non-film songs, which shows the growing importance of independent artists in the music ecosystem. By launching a label, an artist gets the share of labels in royalties. They also own perpetual rights to their creations. This is a much better deal for them,” said Shivansh Jindal, CEO, Merchant Records, a label launched by music composer duo 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. So, 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.

Increasingly, labels fetch attractive valuations in the long run, music licensing players said.

“Today, private equity investors and HNIs are interested in music assets. They want to now invest in intellectual property. And music is good for long-term monetization,"shared a CEO of a leading platform for music licensing. "Also, labels, when acquired by private equity investors, can generate 10 to 25 times returns on investments. Emerging labels are good candidates for acquisition by large labels as well,” he added. “Beyond the acquisition of music IPs, these strategic investors have realised that music assets provide almost consistent revenues from various digital avenues available in the music ecosystem. One must also bear in mind investing in labels can be a way of portfolio diversification for these investors,” he explained.

In launching one’s own label, artists gain creative freedom under their own labels.

“A label frees artists from the constraints of film music. They can create music the way they want to. Independent artists also nurture new talent through their labels. So, in a way, they give back to the industry what they have rightfully earned through their labels,” said Aditya Kalia, an independent music business professional.

The Journey to Launching Music Labels:

• On average, singers generally earn between 2 lakhs to 10 lakhs a song
• Singers earn from concerts—a strong revenue source.
• Royalty Revenue Structure: 50%--labels, 25%--composers, 25%--lyricists
• In launching labels, composers gain more than singers as their share goes up to 75% in royalties.
• Singers gain 50% of royalties in launching labels apart from perpetual rights to creations
• Globally, more composers than singers launch labels.
• Film Music fraught with uncertainty as stories do not demand songs and films flop
• Young artists reinvest money earned from concerts and digital avenues to launch labels