ValuePickr Forum

VP 2018 Meet: Changing landscape in Media Industry

Dear all,

My sincere apologies for delay in posting the presentation as it took longer to sanitize the presentation due to AGM season and travelling. Dhiraj and I tried to put together the changes that are taking shape in media and entertainment industry. IMHO, we are at he cusp of value migration within media industry and it makes sense to understand how we can benefit as investor from this value migration and be part of the wealth creation that takes place in digital media . It will be great to get views/counterviews on the same as it will help everybody further refine their thoughts around the figuring out the winners in value migration

Here is the presentation VP_2018_Media_Sector_Changing_Landscape.pdf (598.9 KB)

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Great thanks for the ppt. One prominent miss (don’t know if it’s deliberate!) is Saregama among content creators.

I have always struggled to determine who is the real winner in this digital media value chain. I have placed my bet on Saregama for its invaluable perpetual rights of old songs rather than Shemaroo which is prone to disruption at some point of time. It is also making some very interesting collection of low cost movie and TV series (own IP). Would be great to know your view on this.

Layman’s questions.

How many people in India actually spend money for music? In the past when copying was not possible on a large scale, audio sales were huge, but after Internet became available to all, I think the audio sales came down. I have seen boards displaying ‘Songs are copied here’. So is music industry thriving still? Yes, I do know about discs that cannot be copied but are all being made that way?

There are hundreds of Hollywood movie Wikipedia articles where in you get to see the sales of DVDs and Blurays being sold. But how many Indians purchase or rent like the westerners do? There are many shops who copy a company video and burn a new DVD and sell. And as we can download many of those movies and shows from Internet, the ripped versions through torrents and the TV recorded versions which are uploaded to file hosting websites, not to mention downloads from Youtube through some software or some website.

How much of new content which can only be purchased and not available anywhere, is being produced and sold by these companies so that they have good sales, profits and moats?

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Issue with media and education sector has been the bad corporate governance in the majority of the companies in these sectors.

Layman’s response:

60-80k folks buy saregama Carvaan every month which costs 5.5-6k. Their B2B subscription including streaming is growing at a very very healthy rate. These are original tracks but pirated ones are available easily. Common man pays for value and ready to pay for experience. Why do you need to burn CD when millions of songs are available at nominal charges.

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I do not have any knowledge about the topic, hence my questions. And you are not a layman, as you are knowledgeable and perhaps experienced regarding the topic, hence commented before me.

I did not know about anything you have mentioned. So, unlike young people who can get the content they like without purchasing them, elderly and old folks are purchasing, so the sales are good and growing. Okay.

I am skeptical about the entertainment industry, if it is a prospect, I would look into it too.

In context of Netflix - a streaming as well as content producer - here is an article which highlights the pain and plus points for the business.

Link

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