What does the music market look like?
The consumer market size is around Rs 1500 crore. The figures in the company’s books would be about 25 per cent less. Legal business accounts for 75 per cent of this Rs 1500 crore. Half of the legal business comes from organised large music labels and the other half from more than 200 small regional labels. HMV’s market share is estimated at 15 per cent. Our turnover in 1998-99 was Rs 128 crore. This year’s target is Rs 150 crore.

How has your growth been over the last three years in different segments? What would you say is your competitive advantage?
In the last three years catalogue sales have grown very rapidly . We hold the largest catalogue in India. Two-thirds of film music up to 1985 is with us. We have a third of the ghazal market, half of the Bengali market and are aiming for a third of the Tamil market. Catalogues and new movie releases are our growth engines. In the past year, we have signed up rights for 12 Tamil films, and have acquired recording labels like Sangeetha.

At the company level, there are two competitive advantages. First, it will take any other music company about 20 years to reach our library size. Second is the music rights acquisition. We have been very aggressive in acquiring music rights for the new Hindi film releases in the last four to five years. The two landmark million-unit sellers in the period "Hum Aapke Hain Kaun and Dil To Pagal Hai" belonged to HMV. They will continue to sell for the next 30 to 50 years, as will cassettes of movies made in the fifties and sixties.

What has been the guiding motive behind the foray into film making? How has it benefited your audio business?
Acquisition cost of music software is 60-70 per cent of the total film making cost. If we are to fund this, we thought, we might as well invest the remaining and test the upside of that business. We have produced or co-produced six films of which only Sapnay and Bada Din were audio hits. The rest have not really pulled their weight. However, Godmother won six President’s gold medals in the national awards. The future of this activity is under debate.

Do you think music companies integrate better into movie making than vice versa?
I see no relationship there. They are mutually exclusive. While film making is a creative business, a music company never creates music -- its strength lies in spotting talent and marketing it.

What changing trends do you perceive in the entertainment industry as a whole and music in particular?
In the last decade 20-25 million homes have gained access to cable TV. This has had an incredible payoff for the music industry. Earlier, we could promote a record only through print, but now we advertise in audiovisual medium and even offer samples. This has also given a tremendous lease of life to the catalogues. Today, a lot of youngsters are listening to the music of the 60s and 70s -- they were not even born then.

Then, weightage of film music is slowly but surely going down. We now see a lot of individual recordings. In the last four years new artiste releases have gone up by four to five times. In Indipop category alone 250 new albums were released last year, against just four albums four years ago. Also, there has been a significant jump in the sales of international music, double in the last three years. The change from cassettes to CDs has accelerated, with CD sales doubling every year.

What do you think are the benefits of the Net?
Promotion. We cannot play a song for free on TV, here we can. Also, we can deliver a customised solution -- cassettes and CDs with the music combination the customers want to their homes. Retailers can set up e-commerce/cyber stores.Those who are IPR owners will gain tremendously.

What is the reason behind your diversifications into pop and devotional music? The former was hit badly in the last year, the latter has traditionally been a low-profit segment.

Devotional music gives high volumes. We plan to offer value by introducing well known singers like Lata or Jagjit Singh. That will help maintain margins. In pop, we have always been a cautious player. We are among the very few who have introduced successful artistes (Shankar Mahadevan and Kamal Khan) when hundreds have fallen by the wayside.

Are there collaborations coming up? Do you plan other mass library acquisitions?
No, we would like to remain an Indian label. The London-based MBI’s annual survey (excluding the big five -- EMI, Warner, Sony, Universal and Polygram) puts HMV among the top 10 music companies in Asia . We are always on the lookout for buying out a good library. But these are very chancy and opportunity-based.