Key Takeaways
- Music licensing revenue has grown to record heights, and is likely to keep growing, as it is directly proportionate to growth in adoption of digital music services and streaming video platforms that license music. However, revenue overall has yet to recover to pre-COVID levels.
- Carvaan device sales have bounced back since the pandemic, when their sales reduced due to store closures, and have grown 70% QoQ to 138,000 units being sold.
- Film releases have been muted during the pandemic, depressing at least one source of music revenue.
- Old and new music both contribute heftily to licensing revenue, with the two decades since the turn of the millennium accounting for 34% of income.
An increase in royalties from music and sales in its Carvaan music players helped Saregama’s net profit triple year-over-year to ₹31.6 crore, even as overall revenue (and spending) was still recovering from the hit of the COVID-19 pandemic. “Even on [a quarter-over-quarter] basis, Q3FY21’s consolidated turnover at ₹133.9 crores and profit before tax at ₹41.4 crore grew by 24% and 8% respectively,” the company said in a press release. The company cited growing adoption of digital music consumption as a key revenue driver.
Growing licensing: As always, licensing revenue is growing strongly on the back of increasing digital licensing from music and video streaming services, both curated and user-generated like Spotify, Netflix and YouTube. Music licensing, in particular, has not grown that much over the year due to a lack of new film music.
Source: Saregama
More digital uptake: The uptake in digital services thanks to cheaper internet access and growing traffic during the pandemic has bolstered digital revenues. This is illustrated in Saregama’s YouTube channels’ consolidated views, which has grown significantly over the last few quarters to 2 billion.
Source: Saregama
Carvaan sales back, but not all the way: Carvaan device sales suffered enormously due to the pandemic, and since the company has spent less on marketing it, sales have not recovered to pre-pandemic levels. However, they are getting there, growing 70% QoQ.
Source: Saregama
Revenue, investment recovering: The company’s revenue and profit-before-tax margin is recovering to pre-COVID levels, but film revenue (seen below as “Publication”) is lower than usual, and music revenue is also not back to where it used to be. The company said that it has signed rights to the music of four big films that will release in the coming year.
Source: Saregama
Financial snapshot — Q3FY21
- Revenue: ₹134.6 crore (up 7% YoY, up 22% QoQ)
- Net profit: ₹28.2 crore (up 207% YoY, up 6% QoQ)
- Music licensing revenues: ₹114.2 crore (down 1% YoY, up 13.7% QoQ)
Update: A previous version of this article stated that there were no new film releases by Saregama during the pandemic. While the number is small, releases have happened on OTT platforms.
