Thread by @mmvRavindra

Companies with old music libraries are becoming gold mines. They are finding new ways to monetise the content. With music streaming gaining traction due to increasing data availability, these companies getting good revenues for their old libraries.

Thread 👇@varinder_bansal

As expenses are fixed and very minor, all the increase in revenue flowing down to the bottom line. Huge operating leverage will be played out

An interesting fact : Short vedio apps like Tiktok , josh, moj etc need to pay to these companies even if they use small bit of music from their library

#Saregama with 1,30,000 songs has grown its music business from 138.8cr in FY17 to 238.1cr in FY20 which is a 20% CAGR

#TipsIndustries with 29000 songs has grown its music business from 42.6cr in FY18 to 97.9cr in FY20 which is 52% CAGR.

This growth is coming from their old libraries without much spent on new licenses. Do note that EBIDTA margins are at 70%+ and even has scope to improve further

Music business has two stream of revenues
1. Revenues from OTT
2. Revenues from Publishers

OTT players pay to content owner based subscriptions and and number of streams. They pay minimum guarantees (MG) to content owners based on deal and once certain number of streams crossed they get overflows from OTT.

When you listen to song on OTTs like Gaana or Youtube or Spotify etc they earn few paisa. When you subscribe to these OTT they get part of that money. Currently less than 10% music listeners are subscribers, this number can grow to 30%+ by 2025

Publishing revenue is the money from publishers like TV channels, Short video apps, Social media etc. when their music is being used. Music companies are recently getting deals. For eg. #TipsIndustries has a deal with Facebook and #Saregama has a deal with Josh

One more Interesting thing is if any of the film uses some old song as remix, then either film producer has to pay to content owner for using the song or they will give rights of the new remix song to these companies at no cost.

These music companies have IP rights till 60 years or even more (in case of music composer dies). These companies acquired rights in 1980s / 90s at lowest prices then but as they have rights till 2040 or 50 or even more they continue to mint the money even now.

Most interesting part is that revenue per song per year is continuing to rise. A hit song is like a burger, like you eat burger daily (or often) you listen the song daily (or often). Like price of burger rises every year , revenue of a hit song rises every year.

As more people start using online music these companies continue to get increasing revenues. Our earlier generations ( Baby boomers & Generation X) love these 80s and 90s songs. These are the people now turning into online music.

Ends the thread

Another Music lable "T-Series" is the most viewed YouTube channel in the world.