Dividend from CESC Investments + Interest on Income Tax Refund
Nice article on Saregama’s evolution:
Some interesting details on Carvaan Podcasts that I have not seen in previous concalls/IPs
- Mehra is also not stuck on getting Carvaan-only exclusive podcasts. “Our model is a little different. As a company, we are telling podcasters to bring their podcasts to us on a non-exclusive basis. And if ever we make revenue off of it, we plan to share 40% of it with the content partner,” he added.
- If things go as planned, Saregama plans to start monetizing its podcasts in the next 2-3 years.
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With Caravan they are beating a dead horse, it is a waste of their time and energy, why would one wants to listen to a podcast on a device which looks like an outdated radio instead of using their Phone, people who listen to podcast are bit advanced on the technology , cross selling Carvan to an younger crowd is a sure shot failure.
Caravan is a noise that one has to ignore from Saregama , the real money lies in music copyrights.
Disclaimer: Invested
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Agreed. I don’t see any value here except for 60+ age market. But even the 60+ population is now acquainted with tech as we are using devices since 15-20 years now. Maybe there is some potential in tier-2 and 3 cities but I don’t know why anyone would buy this over a phone.
Over time, a device like that will become more and more irrelevant with smart speakers like Alexa which can play any song with regional language instructions.
Disclosure-Invested
I just have 1 line comment without going into the details of why carvaan is a brilliant idea. The opposite of a good idea, can also be a good idea. 
This is often the most misused reasons to chase a Idea which doesn’t have a future, too cliché applying this to each and every idea is like giving an hammer to the kid 
The whole Caravan business is like selling Alarm Clock to this generation, Yes there is a market for alarm clock but do u want to be in that business is the question?
I had bought Carvan for my father, though my father is a big fan of old Hindi songs he rarely uses it, probably he is one of a case.
I will keep buying Saregama stocks but not for their Caravan business , and management should not waste their time either.
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If you did understand the essence of that talk, then you would also understand that one cannot be too quick or harsh in judging an idea. Because the way reality turns out is really just noise compared to various possible stochastic outcomes which could have been realized. Your reasoning aside (because most people dont think logically and thus success of products does not depend on logic) management is one which learns from mistakes and makes prudent spending decisions. If carvaan (2.0) does not see requisite growth, i fully expect them to not throw good money after bad and ramp it down. The thing which matters to me is that they are willing to try out interesting ideas to gain a differentiation which can help them in the core business (leave it as an exercise for the interested reader to figure out various ways carvaan helps music streaming). One has to be willing to experiment and fail, in order to succeed.
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Just wanted to add a point here gathered from my peer network. Young parents are also buying carvaan mini for their kids. So possibly that could be a segment working for carvaan.
Disclosure - Not invested
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think of the 60+ population as a set of 2 kinds of people:
- Ones that are tech savvy and love using their phone and learning new things.
- Ones that are not tech savvy and do not love using their phone. They use it, albeit grudgingly and not or very many things.
Most would lie somewhere on the spectrum I have highlighted. There is no easy way me to know how many lie near the extreme 1 and how many near extreme 2. But my anecdotal evidence is that not only 60+ but 50+ people generally want to avoid learning new things on the phone, or learning new apps. The tendency to not learn as we grow old is well documented and also increases with age. Let us leave 50+ population aside for now and only focus on 60+
According to https://vikaspedia.in/social-welfare/senior-citizens-welfare/senior-citizens-status-in-india#:~:text=According%20to%20Population%20Census%202011,to%20173%20million%20by%202026. there are 10cr 60+ citizens in India (as of 2011) and expected to reach 17cr by 2026. All these 17cr people lie somewhere on that spectrum. Even if i conservatively assume that half of them are tech savvy (my own experience is that this number is way lower. Maybe 10%). Saregama has a total addressable market of ~8-9cr people. Podcasts include bhajan and spiritual things too. Kids shows too. Podcasts does not mean everything to do with tech, or things which young people like. With an addressable market of 8cr people, a quarterly sales of 0.25M is nothing. They have a huge opportunity to grow, if they want to. asking why carvaan works is like asking why google home works (when telephones exist). The answer is it is a different product aimed at a different user experience.
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A new concept called digital detox is gaining steam and Caravan can as well address that need very well.
Also, the market of portable Bluetooth speaker is very much active. Carvaan also fits this need and does more.
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Out of this 8 cr people, We need to consider the affordability too. I think the product is not affordable for people living in lower income base towns and villages. Only retired people with disposable income base can be the target audience.
I’ve bought a Saregama tamil mini for my Mom recently. Disappointed with the Price vs Irritations. Just with a Vintage image, they cannot beat the sophistication of technology. Nevertheless they have the best music repository in listed companies.
Disclosure: Not invested. Sold Tips industries in the recent run-up.
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Very positive development for Saregama going ahead. Saregama could also monitise it’s digital music catalogue by selling select old, original songs / tracks as a non-fungible token (NFT). This could lead to huge inflows as and when they happen.
Disclosure : Holding since many years, hence could be biased
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A bit more complex:: the artist here is a song writer and performer, and he has sold a personal recording. For cos like Saregama, things are a bit more complex on who owns what. Also, depends on if Saregama has a private collection which it has the rights to monetize. Recordings already available to the public might not have as much a value.
Disc: not invested.
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Good summary
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I was looking how companies monetize IP.
Interesting things observed.
- Famous songs are recreated with audio (almost same video) in different languages, check song of Badshah ( zee music) in Bengali, Gujarati etc.
- One Gujarati song of Rakesh Barot is recreated with Kajal Maheriya ( female version).
- Short video platforms uses all new songs to re create videos.
- As I write earlier, famous hindi songs are recreated in Bhojpuri, Apni to Jaise Taise, Pardesiya etc.
- Using old songs ( many together) with Sanam and other singers.
Companies for newer ways to monetize. Interesting time ahead.
Disclosure: Invested
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One thing that I find interesting in the licensing business is:
Upside is non-linear - A song goes viral on youtube (revenues), same song heard on audio ott over and over again (more revenue), short video apps (more revenue)
Downside is linear - A song does not work but money spent does not depend on number of platforms it is available
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Reminds me of this mental model by Charlie Munger :
Disney is an amazing example of autocatalysis. They had all those movies in the can. They owned the copyright. And just as Coke could prosper while refrigeration came, When the video cassette was invented, Disney didn’t have to invent anything or do anything except take the thing out of the can and stick it on the cassette. And every parent and grandparent wanted his descendants to sit around and watch that stuff at home on videocassette. So Disney got this enormous tail wind from life. And it was billions of dollars worth of tail wind.
Obviously, that’s a marvelous model if you can find it. You don’t have to inventanything. All you have to do is to sit there while the world carries you forward.
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A small update on the trends playing out here:
Recently got the rights to publish Badshahs new song Pani-Pani. Been the most viewed Yotube video in last 24hours (Saturday)
This song is going viral on Insta reels. This kinds beautifully connects with what Mr Munger mentioned. Autocatalysis
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I have a short question here, do we know how much amount was paid to acquire these rights? How do we make sure that we don’t overpay for these rights?
Badshah song is like Bollywood movies (in terms of cost), didn’t the management say that they will not go into high budget songs/movies?
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