85% of Saregama's turnover to come from its music biz

Written by Corporate Bureau | Kolkata, Jul 30 | Updated: Jul 31 2008, 06:39am hrs
In 2008-09, around 85% of Saregama India Ltd's revenue will come from the music business, according to managing director Subroto Chattopadhyay. The rest will be contributed by cinema and television content.

Strong growth in the new media is one of the reasons behind the predominance of the music business in Saregama's total entertainment revenue.

"40% of the total music revenue will come from the new media segment like FM radio and telephony and the rest from the physical business like CDs and cassettes," said Chattopadhyay.

He was present at Saregama's 61st annual general meeting, in which the company announced a dividend, after a gap of seven years, of Re 1 per equity share of Rs 10. The company wiped out all accumulated losses in 2007-08.

But the company's profit of Rs 9 crore in 2007-08 was a fall from the Rs 16 crore recorded in 2006-07. The reason for lower profit, according to the company, is one-time charging off copyright acquisition costs of music tracks.

"The music tracks will continue to earn revenues over the years to come, but the unrecovered investment has been charged off in the present fiscal," Chattopadhyay said.

In the directors' report, Saregama said the audio business of the company faced the industry-wide crisis of declining sales in physical formats.

"Music cassette as a format is gradually moving towards extinction. Drop in the volume of compact discs, however, was partially recovered through an aggressive foray into the MP3 segment where the company offered many new products from its reliable catalogue," said the report.

The directors' report said the mobile business has continued to contribute a major portion to the new media revenue.

One of the new initiatives taken up by Saregama is the revival of the old catalogue through new singers, said Chattopadhyay. Already, Mohammed Rafi's songs have been sung by Sonu Nigam, and many such old melodies will come in new attractive voices, he said.

Saregama posted a total income of Rs 143 crore in 2007-08 as against Rs 137 crore in 2006-07.