Music label and movie manufacturing firm Saregama’s Carvaan bodily music participant suffered because the lockdown nearly utterly halted bodily retail gross sales. Even with e-commerce platforms coming again on monitor later in Q1FY21, solely 15,000 models of Carvaan had been bought, in comparison with 198,000 models in Q3FY20 and 74,000 in Q4FY20.

Supply: Saregama

The corporate mentioned it closely minimize advertising and marketing and personnel prices for Carvaan, although it didn’t specify how a lot was saved on this train — Saregama Managing Director Vikram Mehra mentioned Monday within the firm’s earnings name for the quarter that advertising and marketing for Carvaan within the coming months could be near-zero, and that the corporate would financial institution on “natural pull”, i.e. demand from clients, to deliver the machine’s gross sales numbers again to regular. Mehra mentioned that solely media shopping for businesses and exterior PR corporations haven’t been minimize from the corporate’s books, and that too solely on a retainer foundation. He added that spending on advertising and marketing for Carvaan could be too dangerous for the corporate, particularly if restrictions on retail shops return.

Film, TV manufacturing involves complete halt

  • Manufacturing stalls amid pandemic: Mehra mentioned that the corporate’s backside line was helped by the truth that it had no manufacturing prices this quarter attributable to COVID-19 pushed shutdowns of manufacturing. Saregama’s movie and TV enterprise is a small share of its earnings, and its income nonetheless comes largely from licensing music. Saregama’s offers with Spotify and Fb had been finalised on this quarter, in order that contributed to its income considerably, although Mehra mentioned the precise numbers wouldn’t be disclosed because of the aggressive nature of the data:

Supply: Saregama

  • Enhance in music consumption: As folks keep of their houses, authorized music streaming has boosted licensing revenues, Mehra mentioned. “We have deals with 45 streaming platforms worldwide and all major TV channels. Our deals are there everywhere, and our content is being used by big OTT apps. Netflix and Amazon have series that use our content. Our songs are used somewhere in their films or series,” Mehra mentioned, including that since piracy is lowering and consumption is growing, the revenues from music licensing will proceed to develop. He estimated that within the medium to long run foundation, licensing revenues would develop 15-20%, after having grown by 20-25% YoY within the final two monetary years.

Supply: Saregama

  • Public efficiency income down: The only part [of our licensing business] that was affected is public performances,” Mehra mentioned. “That business stream has taken a hit. Q1 is typically not the quarter where we get performing society revenues, but if [restrictions on performances] continue, there will be an impact. But this is a small part of our revenue.”
  • Not competing with platforms: We are not getting into launching a Netflix or Gaana competitor app,” Mehra mentioned. “We will remain a content IP company. The only area where we’re going directly to customers is the Carvaan platforms. We want to further cement on that positioning of the product.” Carvaan has a digital platform with podcasts and older music, and Mehra mentioned Saregama hopes to monetise it with advert income within the subsequent 12-18 months.
  • Movie enterprise is a good ship: Mehra mentioned that the corporate’s movie enterprise is a really frugal operation, ending shoots in beneath a month with shoestring budgets. On monetisation, he mentioned that the corporate retains the IP of its movies, and solely licenses them out in multi-year offers, with decade-long offers offering a revenue on a movie and shorter-duration offers taking some extra time to take action.

Monetary highlights for Q1FY21

Income: Rs 74.four crore (down 38% YoY, down 29% QoQ)
EBITDA: Rs 26 crore (up 420% YoY, down 21% QoQ)
Revenue After Tax: Rs 176 crore (up 3420% YoY, down 23% QoQ)