Share on whatsapp
Share via Whatsapp
Share on twitter
Tweet it out
Share on facebook
Share on FB
Share on linkedin
Post on LinkedIn

If you’ve been whiling away the hours listening to legends such as Lata Mangeshkar or Kishore Kumar, you’re not alone. And as you returned to yesteryear classics, so too have stock markets gone back to two companies that own the rights to these and thousands of songs. SAREGAMA India and TIPS Industries have seen their stocks hit new highs after 20 years. 

music stocks

Image Source : Saregama Website

SAREGAMA and TIPS own the rights for thousands of songs from the 90s. SAREGAMA owns the rights for over 1.3 lakh songs, TIPS owns rights for nearly 25,000 songs.

The two stocks have gained 10 times in the last 1 year!

So, why the sudden revival of old music? A few developments appear to have led this trend.

  • An increased demand for streaming music, thanks both to the explosion of such platforms and cheap data, and from the effect of the work-from-home development.
  • Legal developments that worked in favor of licensing rights of the music IP owners
  • Companies signing licensing deals with streaming platforms.

Quite apart from these, the fancy for these stocks could also be that markets were picking up on work-from-home beneficiaries! Please note that this is not a review or a recommendation on the industry or the stocks. This is simply a quick take to explain the trend in music stocks.

Music and video streaming platforms

Cheap data and high smartphone penetration are driving demand for music through streaming platforms. The music segment now contributes significantly to the total revenue for the Indian music recording industry. The demand for music also appears to have jumped as millions working from home turned to increased streaming. A survey conducted by Nielsen for Spotify concluded that audio-streaming apps are among the top five ways Indians discover new music.

The OTT music streaming segment is highly competitive with domestic music platforms like Saavn, Gaana & Hungama, as well as international streaming platforms like Apple music, Amazon Prime, Google Play, Spotify & others.

Internet broadcasting & copy right laws

Two, an interesting development on the legal side seems to be working in favor of these companies. The Spotify Vs Warner legal battle in India appears to be leading to favorable thinking in terms of rights and licensing requirements. 

The need for licensing agreements pursuant to an interim order by Bombay HC in a recent legal battle points to better pricing deals for IP right owners in future.

Music stocks – business boost

So, how has this helped Tips and Saregama? Well, they are licensing their IP rights on their song library to various platforms. The shift in the way people consume music as well as legal developments have helped companies combat the piracy and licensing issues that they struggled with in the past. This is helping them monetize their IP rights on a significantly larger scale. 

SAREGAMA, for example, has inked licensing deals with both domestic and global players including Facebook, Spotify, ShareChat, and Triller, as well as big platforms such as YouTube and Amazon Music

For SAREGAMA, licensing revenue has doubled in last 4 years from Rs. 138 crore in 2017 to Rs. 283 crore in FY2021. This jump comes even as the company reported a decline in revenue from Rs 544 crore in 2019 to Rs 442 crore in 2021. It now wants to invest Rs.200 crore for acquisition of new music over the next two to three years to capture 20% share of new music. 

Similarly, TIPS has inked licensing deals with Facebook, YouTube, ByteDance’s Resso, JioSaavn, and Amazon Music. The company, which is also the largest producer of Punjabi films, has initiated a demerger exercise to separate music and film businesses, suggesting that it sees enough promise in the music industry to let it stand alone.

Of course, how steadily these revenue sources can scale up for the companies bears watching.

Share on whatsapp
Share via Whatsapp
Share on twitter
Tweet it out
Share on facebook
Share on FB
Share on linkedin
Post on LinkedIn

Please note that any specific queries on any of our recommendations will be answered ONLY through email. If you are a subscriber, please mail contact@primeinvestor.in.  Only general queries or discussions will be answered through the comment section of the blog. For full details, please refer to this post – How to communicate with PrimeInvestor.

2 thoughts on “OLD is GOLD for Music Stocks!”

  1. Hi Sir,
    I once analyzed the company and according to me the lever for the growth in the revenue would be slow. Can you please put some analysis on how would be the revenue thing in next couple of years?

    1. N V Chandrachoodamani

      Thanks for writing Vikas. We do not intend to do a research coverage on these companies at this point of time. Longevity of these new trends are difficult to predict. And there are issues with rules related to licensing until it gets amended in law.

Leave a Comment

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Register for FREE!

Gain instant access to more PrimeInvestor articles, researched products, and portfolios

The essence of PrimeInvestor

Register for FREE!

Gain instant access to more PrimeInvestor articles, researched products, and portfolios

Legal Disclaimer : Redwood Research (with brand name PrimeInvestor) is an independent research entity offering research services on personal finance products to customers. We are a SEBI registered Research Analyst (Registration: INH200007478). The content and reports generated by the entity does not constitute or is not intended to constitute an offer to buy or sell, or a solicitation to an offer to buy or sell financial products, units or securities. All content and information is provided on an ‘As Is’ basis by PrimeInvestor. Information herein is believed to be reliable but PrimeInvestor does not warrant its completeness or accuracy and expressly disclaims all warranties and conditions of any kind, whether express or implied. The services rendered by PrimeInvestor are on a best effort basis. PrimeInvestor does not assure or guarantee the user any minimum or fixed returns. PrimeInvestor or any of its officers, directors, partners, employees, agents, subsidiaries, affiliates or business associates will not liable for any losses, cost of damage incurred consequent upon relying on investment information, research opinions or advice or any other material/information whatsoever on the web site, reports, mails or notifications issued by PrimeInvestor or any other agency appointed/authorised by PrimeInvestor. Use of the above-said information is at the user’s own risk. The user must make his own investment decisions based on his specific investment objective and financial position and using such independent advisors as he believes necessary. All intellectual property rights emerging from this website, blog, and investment solutions are and shall remain with PrimeInvestor. All material made available is meant for the user’s personal use and such user shall not resell, copy, or redistribute the newsletter or any part of it, or use it for any commercial purpose. PrimeInvestor, or any of its officers, directors, employees, or subsidiaries have not received any compensation/ benefits whether monetary or in kind, from the AMC, company, government, bank or any other product manufacturer or third party, whose products are the subject of its research or investment information. The performance data quoted represents past performance and does not guarantee future results. Investing in financial products involves risk. Mutual Fund Investments are subject to market risk, read all scheme related documents carefully. As a condition to accessing PrimeInvestor’s content and website, you agree to our Terms and Conditions of Use, available here. This service is not directed for access or use by anyone in a country, especially, USA, Canada or the European Union countries, where such use or access is unlawful or which may subject Redwood Research or its affiliates to any registration or licensing requirement.

• Aditya Birla Mutual Fund • Axis Mutual Fund • Baroda Mutual Fund • BNP Paribas Mutual Fund • BOI AXA Mutual Funds • Canara Robeco Mutual Fund • DSP Mutual Fund • Edelweiss Mutual Fund • Essel Mutual Fund • Franklin Templeton Mutual Fund • HDFC Mutual Fund • HSBC Mutual Fund • ICICI Mutual Fund • IDBI Mutual Fund • IDFC Mutual Fund • IIFL Mutual Fund • Indiabulls Mutual Fund • Invesco Mutual Fund • ITI Mutual Fund • Kotak Mahindra Mutual Fund • L&T Mutual Fund • LIC Mutual Fund • Mahindra Mutual Fund • Mirae Asset Mutual Fund • Motilal Oswal Mutual Fund • Nippon India Mutual Fund • PGIM Mutual Fund • PPFAS Mutual Fund • Principal Mutual Fund • Quant Mutual Fund • Quantum Mutual Fund • Sahara Mutual Fund • SBI Mutual Fund • Shriram Mutual Fund • Sundaram Mutual Fund • Tata Mutual Funds • Taurus Mutual Funds • Union Mutual Funds • UTI Mutual Funds • Yes Mutual Funds

Equity: Large Cap Funds | Mip Cap Funds | Large And Mid Cap Funds | Small Cap Mutual Funds | Contra Mutual Funds | Dividend Yield | Focused Mutual Funds | Find Top Index Funds | Best Sector Funds | Thematic Mutual Fund | Best Value Mutual Funds | Equity Linked Savings Scheme | Tax Saving Funds Debt: Banking And PSU Funds | Corporate Bond Funds | Credit Risk Funds Mutual Funds | Dynamic Bond Funds | Floating Rate Funds | Gilt Mutual Funds India | Find Top Liquid Funds In India | Long term debt funds | Low Duration Funds Debt Funds | Medium Duration Debt Funds | Medium To Long Duration Funds | Money Market Debt Funds | Overnight Debt Funds | Short Duration Debt Funds | Ultra Short Term Debt Fund Hybrid: Aggressive Hybrid Funds | Arbitrage Mutual Funds | Balanced Advantage Mutual Funds | Conservative Hybrid Funds | Dynamic Asset Allocation | Equity Saving Funds | Multi Asset Funds | Multi Asset Allocation

Mutual fund rolling returns by category: Balanced Advantage | Conservative Hybrid Fund | Corporate Bond | Dividend Yield | Dynamic Bond | Equity Linked Savings Scheme | Floating Rate | Index Funds | Large and Midcap fund | Large Cap Fund | Liquid funds | Low Duration | Mid Cap Fund | Multi Cap Fund | Short Duration | Small cap Fund | Solution Oriented – Childrens Fund | Ultra Short Duration

Login to your account
OR