The Morning Brief Why are Music Labels Buying Into Film Companies?
Jan 29, 2026
Nirmika Singh, founder of MOX Asia and ex-Editor at Rolling Stone India, gives strategic takes on label moves. Rajesh N Naidu, ET film journalist, breaks down the financial mechanics. They unpack how labels buy production stakes to secure music IP, the role of streaming cash, differing strategies of Universal versus Saregama, and what these deals mean for control and distribution.
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Labels Use Studios To Cut Costs
- Music labels invest in production houses because buying through a studio is cheaper and less risky than bidding for single film music rights.
- Rajesh N Naidu says minority stakes can cut music acquisition costs by 30–50% and raise ROC versus direct film investment.
Minority Stakes Improve Returns
- Minority stakes offer better returns on capital than direct film investments while reducing risk exposure.
- Rajesh N Naidu estimates ROC from production-house investments at 30–40% versus ~11% from direct film investments.
Deals Lock Long‑Term IP Pipelines
- The deals aim to secure perpetual music rights and long-term IP pipelines, not just short-term hits.
- Rajesh N Naidu notes Saregama’s option path to boost stake to majority by 2030 to lock future catalogs.