Why brand deals are primary, not supplementary, revenue sources for Indian artists

By: Cherie Hu

Published: 2019-08-01

It’s nothing new that brand partnerships are playing an increasingly important role in the music industry, for artists of all career stages around the world.

The U.S. music business alone earns some $2.6 billion annually from brand partnerships and sponsorships, according to Billboard’s latest estimates. A confluence of factors has contributed to the increasing centrality of brand deals — from the always-shifting economics of streaming, which has forced many independent artists to seek other short-term revenue sources as they wait to break even on their recordings, to the growing ambitions of labels and other music companies to expand into lifestyle sectors such as fashion, fitness and food (and vice versa). The likes of United Airlines and W Hotels are now even releasing their own records on streaming services and launching their own labels, in an effort to get as close as possible to artists, their creative sources and their audiences.

That said, there is also a general consensus in the U.S. and in most other Western markets that brand partnerships are ultimately supplementary income streams to recording and touring, rather than dominating artists’ and labels’ bottom lines.

The situation in India, however — and in many other markets where streaming models are relatively nascent — is quite different. Brand partnerships not only are a primary, not supplementary, source of income for most independent artists in India, but also tend to come much earlier in these artists’ careers.

If you ask a typical independent artist in India how they make their money (“independent,” in this case, meaning mostly separate from the Bollywood machine and from any long-term major-label contracts), it’s likely that 80% to 100% of their income will derive from the combination of touring and brand partnerships/sponsorships. Out of that majority share, the exact ratio of touring to branding revenue might be something like 1:1 or 3:2, depending on whom exactly you speak to. Either way, revenue from brand deals ends up being around 50% or more of the total pie.

That means sync, audio streaming and all other sources then end up getting crammed into the remaining 0% to 10% of total income. This reinforces the fact that the higher-level hype around the rapid growth of music streaming in India isn’t translating to more sustainable finances for the majority of independent artists in the country, in part because of entrenched contractual practices in Bollywood.

Therefore, for artists who don’t want to go the major-label route, brands become one of the few significant sources of capital to help fund any or all points of the path to leading a sustainable music career — from A&R and recording, to distribution and promotion.

Like anywhere else in the world, brand partnerships in India manifest in several different ways. Some are more akin to influencer marketing, whereby brands sponsor content from musicians who have a close, organic relationship with their fans. Another popular route is writing or performing music directly for commercials (e.g. Badshah and Sony Music recording a theme song for a Yamaha scooter, or Clinton Cerejo writing thousands of jingles for the likes of OkCupid, Bose and Google Maps).

Arguably the most interesting deals — several of which I list further down in this post — position brands as active A&Rs, connecting artists with each other and helping to produce music videos and other visual assets in addition to audio recordings. The best-case scenario for the artist in these arrangements is that the brand takes on the A&R and marketing functions of an independent label, without buying out any of the rights. In this vein, some local industry professionals have referred to brands as “career accelerators” for unsigned artists.

This is a stark contrast to markets like the U.S. and E.U. — where I feel like artists are still wary about having brands influence the creative process itself, and instead are more comfortable partnering with brands after a record is already out, and after said artists have already cultivated their own image and audience on their own terms.

Importantly, though, because the streaming landscapes in these markets (U.S./E.U.) are more mature, many artists can also afford to delay these partnerships in the first place, and focus on building up recording and touring income first. Most artists in India don’t have that luxury, and hence team up with brands by financial necessity, particularly for digital-first projects. As I suggested in my first post for this series, this raises all kinds of additional questions about what it will really mean to be “independent” as an artist in five to ten years, both in India and globally.

A quick note on live events: even for India’s biggest brick-and-mortar music festivals, sponsorship also accounts for a significant amount of annual income, to the point where brands are equally if not more loud in the festivalgoer’s experience compared to a typical U.S. festival. According to a 2016 report, up to 70% of income for the Bacardi NH7 Weekender — one of the biggest festivals in South Asia — comes from outside brand sponsorship in any given year, with ticket sales accounting for only the remaining 30%.

Below, I’ve included a small sampling of more long-term, established music/brand partnership initiatives that I learned about at the All About Music conference, as well as in one-on-one conversations with local music industry stakeholders. If there are any important ones that you think I’m missing, please comment in the post below!

RECORDINGS

LIVE/FESTIVALS