Physical sales continued to remain under pressure in the quarter ended December 2009 for music and entertainment label Saregama India, whose total income has been flat quarter on quarter, and fallen 18% compared to December 2008.
Lowered spend on production of television serials and films, which has fallen considerably over the last quarter (and 64% on a year on year basis) to Rs. 8.5 million resulted in profit rising 2.6 times from December 2008 quarter. Comparatively, in the September quarter, production costs were at Rs. 23 million. Saregama recorded a 42.4% sequential increase in net profits to Rs. 4.7 million in the quarter ended December 2009.
Saregama has a wide catalogue of music and movies that it licenses out to generate revenues. Revenues from licenses grew 19% to Rs. 141.6 million in the quarter ended December 2009, which is a jump of 159% from the same period last year. Its wholly owned subsidiary Open Media Network prints a weekly current affairs magazine called Open.
Music Store Launch Delayed?
According to Saregama’s investor update in September, the soft launch of its Saregama.com music store was scheduled in Oct’09 for Saregama employees and the final was to be launched this month depending on the outcome of soft launch. The site reveals it is still under construction. We had first reported on the company’s plans for a music store in August.
The site was to have not just Saregama owned content but content licensed from other labels too – so it would be an independent portal that would compete with the likes of Hungama.com or Nokia’s Ovi Music store.
Also read: Airtel versus Saregama – on which is the largest music company in India.
Segment Wise Results: Music & Film
Net losses at Saregama’s Film and TV serials division have reduced to Rs. 15 million in the December 2009 quarter compared to the Rs. 103 million in Dec 2008. Revenues have fallen 13% to Rs. 29.5 million. In the September quarter, the company was producing three commercial Hindi films by Sanjay Leela Bansali, Apoorva Lakhia and Abbas Tyrewalla’s 1800 LOVE.
Its music division is going strong with net profits rising 23.4% to Rs.69.5 million over a 36.8% rise in revenues to Rs. 237.2 million year on year.