Saregama’s Yoodle Films plans to build catalogue of 40-50 films in three years

MUMBAI: Yoodlee Films, the film production arm of music label Saregama, is planning to build a catalogue of 40 to 50 films in the next three years. The company also intends to create 1800 hours of new TV content during the same period.

The studio has inked a 12 movie output deal with a leading broadcaster/digital platform. It also noted that another output deal is on the cards. Saregama also said that Yoodlee is the only studio in India to give three Netflix Originals. Yoodlee, the company said, has built a library of 20 films.

In Q4 2019, the production house launched three films on Netflix namely ‘Brij Mohan Amar Rahe’, ‘Music Teacher’, and ‘Ascha Kya Chak It’. The quarter also witnessed the theatrical release of movie Hamid.

Yoodlee Films focuses on thematic films in all languages, with controlled budgets and a nucleus on an audience segment of 18 to 35 years. The company always retains the Intellectual Property for all the films launched. The films produced by the studio are driven by the powerful stories targeted at young audiences across the worlds who primarily consume content on personal devices.

Yoodlee Films has positioned itself as a writers studio. The films produced by the studio are driven by the powerful stories targeted at young audiences across the words who primarily consume content on personal devices.

Saregama said that the films business has witnessed growth courtesy expansion of overseas markets, an increase in regional content and a rise in acquisitions of the digital content by Over The Top (OTT) platforms.

The global OTT players are making huge investments to build their Indian content libraries; benefiting small to medium budget films. As per the KPMG India – FICCI – Indian Media and Entertainment Industry Report 2017, the Indian film industry is expected to grow to INR 206.6 Bn by 2021, at a CAGR of 7.7%. The entry of new players across TV and OTT is creating demand for differentiated content.

Falling data costs and digital micropayments ecosystem, both across urban and rural markets, are also supporting this video consumption trend. Social changes are resulting in individual members of family watching the content of their choice on their personal devices, thus making niche content a viable proposition.

In terms of the television business, the company’s Tamil serial ‘Roja’ moved to evening prime-time slot from noon in Q4. The company said that the IP of the serial is monetised through remaking it in Telugu, Malayalam, and Kannada.

For this business, Saregama intends to invest in shows only where it has full creative control going ahead, owing to the higher upside from air time in those cases. Saregama is one of the leading TV content producers for the South Indian market. In the past, it also produced shows for Hindi GECs, but due to IP ownership, it decided to focus on business where the company can retain the IP. The company produces TV content in four South Indian languages.

Saregama has 5700+ hrs of Tamil serial content IP and intends to create 1800 hours of new content over the next 3 yrs. Currently, it provides around 15-16 hours of content per week across four serials.

The company said that its long-term strategy is to be a pure-play content company capitalising on the global data-driven entertainment boom.

In the music space, with the success of Carvaan, the company is planning to launch Carvaan 2.0 in the next quarter. With 120,000 songs IP across 18 Indian languages, the company aims to acquire 20% market share in new film music in the next three years.

Carvaan has multiple variants across languages (Hindi, Tamil, Bengali, Marathi) and price points (Mini, Base, Premium, Gold). It is retailed through e-commerce and a pan India dealer network of 22.5K outlets. The product has also been recently launched in the UK, USA, Canada, and UAE.

Saregama licenses its music to various OTT platforms for online streaming. This segment has seen over 40% YoY growth and is expected to grow even faster with Spotify’s entry into India. The growth is driven by both the increasing number of users (growth in smartphones) and higher usage (cheaper data). Saregama Music is licensed to 45 OTT Platforms including nine in India.

On YouTube, the company has 23 channels with a subscriber base of 10 million users. Monthly views have grown from 0.5 Mn to 300 Mn in just 4 years. Over 9,000 videos have been uploaded in the last 36 months on various YouTube channels of Saregama with over 36,000 videos in totality.

The company noted that the Indian music industry was estimated at Rs 14.4 billion in FY18, having grown at a CAGR of 14.3% between FY14 and FY18 (KPMG). The growth in India has come on the back of digital consumption led by smartphone popularity. Contrary to the popular belief, it’s the audio streaming (OTT) platforms and not the video platforms that are igniting this growth.

It also said that the success of audio streaming services is fuelled by the ease of accessibility, free tiers, cheaper data, and efficient distribution models. While India-based streaming services may have gathered over 100 million users, the overall paid subscribers are estimated to be less than 1%, thus offering a huge headroom for growth. Spotify alone has 83 million paid subscribers.

The ancillary benefit of streaming services is the rising popularity of regional music namely, Tamil, Malayalam, Punjabi, Marathi, Bengali. Retro music is making a comeback, fuelled by remixes in new films, retro based radio stations.

Meanwhile, Saregama’s net profit grew by a staggering 92% to Rs 54.3 crore in FY19 from Rs 28.3 crore. EBITDA jumped 75% to Rs 94.9 crore from Rs 54.3 crore. Revenue from operations increased 53% to Rs 544.7 crore from Rs 356.6 crore. Revenue from music segment grew 65% to Rs 489.7 crore. TV & Films revenue declined 10% to Rs 47.6 crore. Publication revenue grew 8% to Rs 7.4 crore.

In Q4 FY19, net profit declined 25% to Rs 16.1 crore from Rs 21.4 crore in the corresponding quarter of the previous fiscal. Revenue increased 18% to Rs 124 crore from Rs 105.3 crore a year ago. Music revenue increased 22% to Rs 112.1 crore while TV & films revenue declined 13% to Rs 11.9 crore from Rs 13.7 crore.