In his advancing years, RPG Enterprises founder Ramaprasad Goenka retreated from an active role in most group companies. Not so in Saregama India Ltd. It was a company close to his heart and he chaired SIL’s annual shareholder meetings, speaking lovingly of his association with the company.
Over the last few years, however, the new leadership has struggled to keep Saregama relevant in an era of free music downloads. However, Carvaan, a pre-loaded bluetooth audio player that comes with a retro package, enabled it to monetise the firm’s huge music repertoire and helped SIL find its mojo again, while energising the management to chart out a strategy for the future. The company is also signing deals with the likes of Amazon Prime and Apple Music for content delivery through their platforms. Excerpts from a conversation with Sanjiv Goenka, chairman, SIL:
Having tasted success with Carvaan, what is your strategy for the future? Is the Carvaan journey sustainable?
It is true that none of us was expecting Carvaan to be so well-received. What I find most satisfying is that we have, through this product, brought back the sentiments and emotions attached with music. It has become a vehicle for family-bonding.
For the first several weeks since the October 2017 launch, we did not market it, but now we have begun to market it aggressively. We distribute online and offline through a retail network of 12,148 dealers in over 300 cities. Sales stood at 1.64 lakh units in the first quarter of 2018-19. This is expected to rise to 2.5 lakh units by September 2018.
We will launch new variants around Diwali, aimed at the youth. There will also be language-variants capitalising on our vast repertoire of songs in many Indian languages. It is possible to customise the product with a photograph, for bulk orders.
These audio players are now imported, but we also have plans to make them locally. Exports have begun to the U.S., U.K. and Canada. I met a man in Switzerland, who buys the sets from Amazon and sells it to Indian tourists! Our biggest strength with the product is that it will remain proprietary as nobody else has the right to this repertoire.
A branded audio player with embedded music has allowed you to monetise your intellectual property and content. What is Saregama doing about new content?
We are creating and producing content for Tamil television serials in a big way. There is further potential to grow in this area. New channels are coming up. New IP is also being created through the film business. We have made Telugu and Malayalam films and also the music for some of these films. We are also planning to [enter] Marathi films.
After a break, Saregama is acquiring film music for Hindi and Tamil films. The monetisation of these songs has begun through various streaming platforms. In 2017-18, SIL added audio and video rights for 46 new film songs.
How does the future look?
Saregama has three business verticals — music, TV and films and publication. Bulk of our revenue (83% in FY18 ) comes from music, driven by various B2B partnerships. Through a disruptive product like Carvaan, the younger generation is paying for music from the older generation.
We expect 2018-19 to be good. TV and films are also contributing well, [accounting for about 15% revenues). Our long-term strategy is to capitalise on the data boom through improved monetisation of our existing IP which will then help the creation of new IP. Over-the-top streaming and YouTube revenues will see double-digit growth.