Apurv Nagpal, Managing Director - SAREGAMA, is a man on a mission who believes in thinking and working in today's paradigm. In conversation with Pavan R Chawla, Director Content & Chief Strategy Officer Indiantelevision Group and Editor –RadioAndMusic.com, he says vision for SAREGAMA is to make sure its content is available for anyone who wants it in whatever format -- even complete discographies, and never mind if they might end up helping the pirates. But then, he has also begun selling licenses to pirates to enable them to get legitimized. Nagpal believes that the music labels complaining of poor revenue shares on the CRBT and other platforms have brought the situation upon themselves. He recommends that the Government should think socially responsibly and reduce the costs of radio operators on the license fee front rather than from the legitimate revenues of  music labels whose content they play,  and believes the government should scrap all the Copyright  Amendment proposals, step back, and think the scenario afresh.

Let's start with your perspective on the music industry and whether you believe Industry estimates that say it will grow from 2009's Rs 7.5 billion to 26.5 billion in the next three years… 

Three years? I wouldn't believe any forecast that's for more than a year when it comes to the music and film industries. I am from the FMCG world, and we are very used to giving three- to five- or even 10-year forecasts, but not here, considering the pace technology is growing at and the way people are interacting with it. Nobody would have predicted so many people would be listening to  music on their mobile phones today, but they are, or the fact that something called an iPod would be making the kind of money it is today. Therefore I think there are a lot of surprises in store -- some pleasant, some not so pleasant,  including piracy. Forecasts are not worth the time you spend making them. So let's live in the present.

OK, so what's you forecast for one year?

I would expect a lower double-digit growth. Anywhere between 10 to 20 percent. See, every industry body will give you a vastly differing industry trends estimate number. Besides, nobody's mapping local labels and what sells in the pirate spaces. Does it include what's sold at Lala Lajpatrai Market in Delhi where a customer gives them a 2-GB stick and 50 rupees to fill it up with music? No.

I have simple way of thinking. I know what each of the big labels is doing. I know what my label is doing,  and I know what I can predict for my label and my business  What we've seen is that in the space of the physical product, companies have to revise how they have been operating, but I believe it's too early to give up on physical. I foresee a growth even in the physical business if we can get our act around piracy. And in the digital space, despite all that's been said and done, there is opportunity for growth. The way we have to re-orient ourselves is: come up with the product that the consumers genuinely want irrespective of the fact that they can get the song much cheaper somewhere else  

Is that why you've become so aggressive on the MP3 front?

We've started MP3, we've started trying to brand products, and we are trying to make it easier for the consumers. I think my vision for SAREGAMA is to make sure our content is available for anyone who wants it in whatever format.

So if a music lover wanted to buy the entire SAREGAMA catalogue – at least what's digitized – for, say,  Kishore Kumar, can he get the Kishore Kumar discography?

I want to make it available; I want discography. We have just put together the complete works of Pandit Bhimsen Joshi and Pandit Shiv Kumar Sharma separately. I know when we do that I make life extremely easy for the connoisseurs, the artiste's fans, and the pirates as well -- it's a double-edged sword. But again,  my point is I've got to do what I've got to do, and I cannot keep on second-guessing someone else. I cannot say -- and that was the view when I joined SAREGAMA as well – that MP3 is poorer-quality sound and so we won't deal with it. If consumers are fine with it and people want to listen to music on their mobile phones or want a cheaper MP3 disc with 40 not the 10 songs they'd get on an audio CD, why should I argue?

A leading music publishing company head told me he believes, and I quote, that �the Telcos in India are the biggest corporate pirates because they arm-twist the owners of copyrights of music on negotiations, and pay them really pitiable amounts from all the moneys they ultimately make on the CRBT- or other VAS-related platforms.' What is your view on that?

Nobody has put a gun to anyone's head! That copyright owner is surely free to not deal with the Telcos as he feels fit. I think to be fair to the Telcos, the music companies have brought this upon themselves. When initially this then-new CRBT service was being launched, the Telcos had wanted an extremely balanced  revenue share, but at that time the music companies and copyright owners thought it fit to opt for MG-based terms. So they've kind of brought it upon themselves. Having said that, I do believe what the Telcos pay today is unfair and too small an amount. However, dialogue and negotiation is a constant process and the two parties have to solve this.

Define your leadership style?

I always have fun in whatever I'm doing, and I want people around me to have fun as well. It's about creating great content, so just have fun while doing so, is  my belief.

With my team, it's like this: once a person has earned my trust, I'm completely hands-off: set the direction, the vision, the clear criteria, then let them be. If they are the right people, they will flower.

And that's what you seem to have done with your most recent addition at the top level, Adarsh Gupta, who heads Music. One hears that all the products he has conceived of and launched so far have done very well; in fact the big 10-cd compilation, Best of Bollywood, was sold out within a month and you went in for another impression…

I think he is the kind of person our organization needs, and what I want it to be like too -- digitally savvy, consumer-savvy, creating great packaging, great branding, making the product more relevant for consumers… creating great content.
 

Talking about creating great content, you must definitely re-package far  more than you actually create, considering you own the biggest powerhouse of retro music. Of the 3.6 to 3.7 lakh tracks your Company has produced to date, you've digitized around 1.8 lakh. Has your Company maintained the archives from Day One? If not, how are you sourcing the missing tracks? And how many are missing?

We are looking into our archives, it's an ongoing process, and we also rely upon collectors and fan clubs and music clubs; thank God there are plenty of these!

Where does SAREGAMA stand today in the Hindi music industry per revenues and market share?

I am sure we are the Number Two on revenues. When you say �share', I don't think that any share takes into account the smaller labels. I don't think that any share takes into account the smaller stores outside the LFO's. Within the Large Format Outlets like the Music Worlds, I think we would be at around the 20 percent mark; within other formats like Nokia, which is a great example of a digital store, I think we are around 40 percent.

And how about on i-Tunes?

No idea of share there.

Your physical:digital sales ratio is…

50-50, I think.

You recently said, â€?We want to re- position our catalogue to be able to connect with the consumers and the customers across age groups and geographies by making it more contemporary and up beat.'  How did you propose to re-position a truly rich but not a new catalogue as more contemporary and upbeat?

I will give you an example of a song which I think somebody did that extremely well. Bacchna ae Haseeno. It was sung very beautifully in the late Seventies when it was composed, and it's done very well since. I think there's a new version with the new film that came out. And to my sensibility, that is the best remix I have seen of the older number. None of the others, and there have been 25 other imitators in the Hindi film industry, even holds a candle to Bacchna Ae Haseeno. That's an example of contemporizing something. It's an example; it's not the only way. What we are trying to see -- and I cannot share more details right now – is whether we can take something and re-create it in different styles. It does not necessarily have to be a remix. What if it's a classical version, what if it's a rock version, what if it is a Gazal, an operatic version?

Like the Rahat and Sonu concert events?

Yes. Both have done events with us and they sang with a classical opera in London with the Birmingham Philharmonic Orchestra. That's another way of trying to make something contemporary. Atul Churamani, another senior colleague, is spearheading these events and more for us in India and internationally now, and he's doing a great job too.

See, it doesn't have to be electronic. For example nursery rhymes. We had A R Rehman and his school,  which is a music conservatory, do Jack and Jill, Twinkle Twinkle Little Star and other rhymes in a unique manner. Twinkle Twinkle Little Star, with his students, became a rap song!  But it's really nice!  My kids love it.

You said there are huge opportunities for SAREGAMA given the strength and appeal of your repertoire in both the physical and the digital space. What are the opportunities, and did they exist before you joined the Company?

The opportunities have always been around. According to me, the challenge of most music companies is to re-think in today's paradigm. What we have to do in SAREGAMA is turn the organization from been primarily physical-led to becoming more digital-savvy,  more marketing-savvy, as that's the way of the world today. Whether you are in a brand or in a music company, in films or television, you have to re-orient yourself  I think music companies have been slow to do that.

However, having said that, today, more music is been consumed than ever before in the history of the world. Earlier, there was one television channel and one radio channel. In India. There was no such thing as a Walkman for a very long time. Today, there are 25 channels in every city, 25 music channels playing music non-stop, there is internet, mobile phone, internet accessibility on the mobile phone… what more can you ask for? So opportunity is huge, because more and more music is being consumed. How to monetize that is up to each company's individual savvy.

How much does the pride-of-ownership aspect help for retro music that is well packaged and well supported?

A well packaged and produced offering will always command appeal. It's the same logic which made us release an LP. It's a throwback to a different era. It's a different feeling. It's for the aficionados who consider all that scratch and hiss as part of the original sound. It's not the clean metallic sound that you get today from the CD or especially from an MP3. So we brought it back. We might sell only 500 or a thousand, but why not?

Going forward, what one big development do you look forward to in 2011?

Many people are big on 3G, but  I think 3G will come later. This seems to be the year for non-film music.

On the vexatious radio royalty issue – your views, and what you believe would be fair compensation for music labels?

I think what is being paid today, which is Rs 660 per needle hour, which varies from city to city per the tier it comes under, is not unfair, given the kind of importance that music plays in the life of radio today. The Copyright Board ruling is saying music is the oxygen for radio, but then you know what? Oxygen cannot be valued at two percent. So I just find the logic a bit weird!

They speak of  the social responsibility of radio and I can understand that for AIR – even if the Government were to ask us â€?Can you make it (music) free for AIR?', I would look at that. But surely the Government cannot come between two profit-making bodies and say â€?You know, there's a social objective so give music at near-zero cost to private Radio'  which doesn't have the kind of social objectives that could apply to an AIR.

I also think radio stations are suffering primarily not because of the copyright owners, but because of the government policies. The government doesn't allow them to do talk shows or news or the several other things they could be doing to reduce their dependence on music. The Government is imposing this mammoth license fee by following the auction process. So when you look at the P&Ls of radio stations,  you will find two features in common: the highest outflow is not copyright;  it is actually license fee. It is more than the cost of the entire content they play in a year!

Before it asks private the music owners to think socially responsibly,  the Government should be looking at reducing the license fee for radio…

Absolutely! The government should be looking at reducing the license fee and not at what the copyright owners. The other point I think is if you look at their marketing and people cost, usually, that too comes out higher than the copyright cost. So I don't think it's a case of radio being over charged for content. However, from their perspective, I can see what radio wants – they want a lower rate.

One India head for a music label told me that even the E&G expenses of a big Radio network are higher than the royalties that they will pay. But having said that, in India,  Radio is still in the fledgling state, struggling to break even…

My perspective is a bit different. Obviously I fully admit to being a bit colored considering where I am speaking from. I believe an industry grows with certain practices, and it grows with a certain environment. If right from the beginning you are accustomed to doing things in a certain way, saying radio is only going to fetch you so  much, that's fine. However,  in an industry where we are used to certain setups and suddenly out of nowhere, radio comes in and starts playing your content 24 hours a day, don't tell me it will have no impact on any of my other businesses!  It is a new development and needs to seen as that. Abroad, radio has been around for several years and has been a powerful medium and therefore all the other forms of monetization have grown together. In India, the biggest decline of the physical business has occurred in the last 10 years, which intersects perfectly with the growth of the radio business…

… and piracy. But Radio is essential as a medium to popularize the labels' offerings…

That's the new content, sometimes. But equally, there is a fine line between the fact that now you can listen to everything for free anyways. You like retro, tune in to Radio at 9 pm which is when you know retro music will be played. Then why will you buy a CD? Let's not get mixed up with the arguments. You have to look at your industry, your setup and the way it has evolved.

The royalty issue aside, what can Radio and Music do to work together?

I think there are 50 areas where we can work together, and I really like people like Apurva Purohit, Prashant Panday, who are coming up with new interesting ideas. I think we are collaborating a lot with both of them on different fronts, and I see that working getting increasingly closer. I wish there wasn't any bad blood over the royalty. For example I think today 99 percent music unfortunately has become film music. According to me, music labels are actually not being more creative; they are being traders,  and I think it's a sad thing. So my point is can we bring back the era where we both could co-exist, side by side,  on an equal footing.

One of my biggest fears is that Indian classical music is going to die out. Everyday I think what we should do. The treasure that we have in the form of recordings is one part,  and I think it will survive forever. But Indian classical music is an art form. You would pay a thousand rupees for a Pandit Jasraj or the late Pandit Bhimsen Joshi or Kishori Ji, or Balamuralikishna. After that,  for whom will you pay? For the next lot of talent, are you ready to give even five hundred bucks to see them perform? I think not. So what I find is that the second line, though present, is not being used for various reasons, and it's not necessarily about quality; it's about stature, which can grow only if opportunities are given to them. Doordarshan, a medium with social responsibility, would promote Pandit Shivkumar Sharma and Pandit Bhimsen Joshi at a certain point in time. At 8 pm, after Krishidarshan,  it was classical music,  and if you didn't like it, you didn't watch TV. Where is that opportunity today for the second in line to become famous and acquire that stature. We would support that social responsibility as a label if were to come to us. Today it is all about money, which is why radio doesn't play classical music.

Do your contracts today specify different percentages for royalty on physical and digital sales respectively?

Absolutely, and the difference is mammoth. It should be five percent on physical, and as high as 50 to 75% on digital. It could be any amount. One learning again, for me, has been that in the music industry and film industry, no two contracts are the same.

How is SAREGAMA tackling something as damning as piracy?

We are participating in all of PPL's initiatives. I think there are two or three interesting things. One, of course, is on the rates front, and another is trying to get the pirates on our side through something called the MMX. Where we basically go to the pirates who are selling memory sticks and tell them,  â€?Why don't you take a license and become legal?' So we are looking at initiatives like that. We are piloting that in a few states to see how it goes.

What kind of license cost does it entail?

From as low as Rs 5000 to around Rs 50000 per year.

Depending upon what? He wouldn't share his sales figures with you?

Of course not. It depends upon what we see. It's a pretty good surrogate for what he actually does. A guy with one machine can only make so many copies; a guy with 10 machines would obviously be in a different league.

What are your views on copyright amendment act?

I think the Copyright Amendment Act is ill conceived in its basic conception. I think what is proposed right now by the Standing Committee is ludicrous!  I cannot have any other word to describe it. I think there are quite a few fundamental problems. It states that this is what is happening abroad. With all due respect, please show me the laws abroad, and I will ask three questions: First, please tell me the countries where rights cannot be assigned except to a copyright society. Show me that law  Second:  show me the law where it says half out of the cinematograph film in the theatre half goes to the lyricist and the composer. Show me that law. Third,  please show me the law which says future assignment, future format assignments cannot happen.

I think the Copyright Amendment proposed that the principal director should get a share of the film. The Standing Committee, in its infinite wisdom, found that the principal director actually shouldn't get it. Why? Because he is getting an upfront fee. He is working on the brief given by the producer. The producer is the true captain of the ship. The producer is putting all the investment in it. The risk is entirely the producer's. So the Standing Committee felt that the director shouldn't get anything. Please explain to me how can one rule apply to the director of the film whose role, according to me, is far more important that that of the music director? How can there be two different norms. I am a very logical person, and  I don't understand this  A film relies far more on the director than the music director, far more on the script writer than the lyricist. In fact,  the director and the producer will tell the music director and the lyricist: â€?This is where I want a song, this is what I want the song to communicate, and this is the genre of the song that I want'. How is the principal director subservient to the  music director? And anyways, even if the government were to decide that all who create a film should become eligible for the 50%, the producer is not an idiot to be investing monies in a film; the music label is not an idiot to be investing huge amounts of  marketing monies.

And what about Statutory Licensing?

Statutory Licensing is again an insane idea,  because it is talking about removing the right to commercial transaction of a copyright owner. I think we have discussed it already but statutory licensing says that, well,  I own the copyright but I must sell it to a radio station at a price which is decided by a Copyright Board. How can the government interfere between two profit-making bodies? The Government must do its  job and not try and do other people's jobs. Should the movie  channels too get films at a mandatory price level? If there can be statutory licensing for music for Radio, would the film producers accept the same for movies for Movie Channels? Both are completely wrong ideas.

What I really believe should happen is the Government should step back. It should call for a special committee which comprises whoever the lyricists and composers want, whoever the film industry wants, whoever the music industry wants. We should all be sitting around a table along with experts possibly from abroad, possibly from India, possibly some from the legal side because the way the bill is today – so ambiguous, so loose -- I think it will lead to a flood of litigation. Therefore, we need to sit around the table again. What we have so far, scrap it,  and let's start the conversation anew.

Would you summarize the year that was in the music industry?

Last year was completely a year of turmoil with one thing after another coming at us, even as piracy grew bigger all the while. I believe the â€?legal' music industry today is just 5 percent of the actual industry. I think the copyright amendment coming in in the form it did took everybody by surprise. I think this shows, sadly, how easily the government and the situations can be misled by old zealous individuals, and this is the only thing that upsets me. The same kind of thing happens in No One Killed Jessica: one person has an axe to grind and spoils the entire thing. It's not about being corrupt' it's about being misled. The same thing that happened with the Standing Committee, where we thought calmer minds would prevail; but they went out on another tangent. I think the Copyright Board ruling again showed the intent of government where they seem to be saying that they don't actually value people who are funding, creating and promoting the content  So I think it's been a year of turmoil.