India’s oldest music label Saregama, an RP Sanjiv Goenka Group company, is planning to grow its market share in the country’s music market to 37-38% over the next three-five years from the current 16%, vice-chairperson Avarna Jain said. In an interview with FE’s Mithun Dasgupta, Jain said the company aims to launch 60 new films and web series episodes over the next three years, as demand for OTT services stands strong with a permanent shift towards watching content on video OTT platforms. Edited excerpts:
Saregama’s revenue from operations rose by over 31% year-on-year at `580.63 crore for the last financial year, while net profit surged by over 35% y-o-y at `152.65 crore during the same period. What were the reasons behind this healthy growth?
The company’s music licensing income rose by 26% y-o-y for FY22. This was primarily on account of increased investment in new music and growing popularity of retro catalogue. Revenue went up in licensing verticals, including YouTube, streaming apps, short-format apps and TV channels, etc. Films, web series and TV business crossed `100 crore for the first time. Yoodlee Films licensed three movies and one web series during the year. Also, Carvaan sale crossed 0.4 million for the year.
The company’s total income grew over threefold to `615.54 crore for FY22 from `188.94 crore for FY15, while profit before tax saw a whopping 13-fold jump to `204.41 crore. What were the strategies and measures you adopted for this strong performance?
Over the last seven years, Saregama has rebuilt its music business brick-by-brick. This includes digitising its entire music catalogue, developing rich metadata behind every song which helps in search results, building data analytics strength that allows predictive models to help decide what content to pick, using technology tools to track IP (intellectual property) infringement etc. We have started buying new content aggressively, with a big focus on regional content. This has already started bearing fruit, with many of the new albums and songs becoming super hits. We decided to extend our leadership in TV business to digital films under the brand, Yoodlee. This business has started gaining size, and now it also covers web series. With Carvaan, the company not only got a big revenue spinner, but also became the only music label to have a direct-to-customer business. Also, Carvaan has helped repopularise the retro catalogue, which in turn helps the music licensing business.
How is your music streaming business doing currently and how was it impacted in Covid times? What are your plans going forward to increase revenue from this segment? Also, what is the outlook for music licensing revenue in the next 2-3 years?
Music licensing revenues have grown over 20% over the last 4 years. And this includes the pandemic times too. While streaming numbers were adversely affected initially (people not going to offices), they improved with time. And, now with pandemic over, the streaming numbers have risen to a new high. The company’s music is extremely popular across all short-format apps, including Instagram, Josh, Moj, Chingari etc. This not only helps promote the new songs but also generates revenue.
For better monetisation (of existing IP), partnerships with all OTT platforms are being launched and we have entered into licensing arrangements with all TV channels and brands for use of our catalogue music. The company has built a browser-based search functionality, using the song metadata, helping content creators find the best song fit. We have plans to aggressively invest in new content over next 2-3 years and potentially small- to mid-sized label acquisition for inorganic growth. Our target is to raise market share of new content to 30% over next two years, thereby increasing music licensing income 23-25% over the medium term.
What is the current market share of Saregama in the country’s music market and how does the company plan to increase it?
Overall, the Indian music industry grew 17% in 2022 to reach `1,890 billion. The industry is expected to grow at a CAGR of 11% in the next two years. Saregama’s current market share is 16%. Our targeted is to grow it to 37-38% over the next 3-5 years.
Yoodlee is making films in regional languages to capitalise on the increased demand for regional content from OTT players. During the pandemic, such platforms saw phenomenal growth. How many films and web series has Yoodlee Films made during the pandemic times?
Since the pandemic set in (since April, 2020), Yoodley has so far released eight films and one web series. One web series (Mindscapes delivered to Netflix) is soon to be released.
How do you plan to expand businesses of Yoodlee Films? There is increased competition in the OTT space and it has resulted in reductions of prices for OTT services. How do you plan to grow revenues in this space, going forward?
Over the last 4-5 years, Yoodlee has released 18 movies (12 on Netflix, 4 on Disney Hotstar and 2 on Zee5 and 1 web series on Netflix). Over the next three years, Saregama targets to launch 60 new films and web series episodes. The demand stands strong vis-à-vis last year of the pandemic, with a permanent shift towards watching content on video OTT platforms. For Yoodlee, focus is on web series and regional films.