Excellent video on the music industry, with some salient information on Saregama and Tips. Must watch for investors in these companies.
One thing that I seek more clarity on, request anyone who knows better to please share your thoughts
At 36 min 20 sec, Shashank speaks about how Digital service providers share revenues with music labels. While YouTube has a normal revenue sharing model, Facebook has a fixed contract and Saavan, Spotify etc pay a fixed 10 paisa per song heard to the label.
If this is true, then apart from YouTube, how will the increase in premium subscription on other platforms like Spotify, Saavan, Gaana etc help music labels? The music labels get paid per song anyway, which is unaffected by number of people subscribing.
I asked Shashank this in the comments section, and his response was “When industry will shift to subscription model that time pay per song won’t be there while subscription revenues will be shared by platforms to labels”
Not sure if this is based in some fact or his assessment of where the revenue models will go when subscriptions increase. If anyone has any views on this, I’d request you to please share. For me, the entire investment thesis hings on increasing paid subscribers driving up total revenues for the platforms, and in turn for the music labels. But if there is no (or lesser) corelation between a paid subscriber and music label revenue, I will have to revisit.
Disclusore: Invested in TIPS. Interested in Saregama if valuations cool off.
Full portfolio here Vineet Jain portfolio