Youtube is Saregama’s superpower—and its kryptonite
Dec 31, 2024
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Saregama is reinventing itself, stepping away from just classic tunes to create fresh hits. YouTube plays a crucial role in this transformation, serving as a powerful platform for exposure. The relationship, however, is a double-edged sword, as YouTube holds most of the influence. The discussion also highlights the contrasting strategies of other music labels, emphasizing the importance of efficiency in the competitive landscape. Saregama’s journey showcases how even a century-old company can adapt and thrive in the digital age.
Saregama's strategic pivot towards creating fresh hits has successfully attracted a younger audience and revitalized its brand identity.
YouTube's dominant role in music distribution presents both growth potential and profit vulnerability, complicating Saregama's diversified media strategy.
Deep dives
Sare Gama's Shift Towards New Music
Sare Gama transitioned from being viewed as a nostalgia-centric music label to focusing on creating fresh hits. This change was prompted by the release of two successful songs, 'Aaj Ki Raat' and 'Tawba Tawba', which amassed an astounding 150 billion views collectively. The virality of these tracks demonstrated that the label could compete effectively in the current music landscape, capturing attention on social media platforms. This strategic pivot signifies a bold move to revitalize its brand and capture a younger audience interested in contemporary music.
YouTube's Dominance in India's Music Industry
YouTube plays a pivotal role in India's music streaming market, commanding over 50% of the industry share and acting as a major revenue source for music labels like Sare Gama. The platform's structure allows only 55% of ad revenue to reach content creators after YouTube takes its cut, heavily influencing the profit margins for music labels. Despite the challenges posed by this revenue-sharing model, the rise of YouTube Shorts has become crucial for labels, as a significant portion of views is generated from short-form content. This reliance on YouTube illustrates both a potential for growth and a vulnerability for Sare Gama as the platform holds significant power over its music distribution.
Challenges in Video Content Production
Sare Gama's expansion into video content production introduces both opportunities and risks within the highly competitive landscape. The shift towards creating regional films and digital series has increased the company's dependence on YouTube, further complicating its market position given the current reduction in budgets for original content across streaming platforms. Analysts express concern that music—which offers higher margins and lower competition—should remain the company's focus instead of spreading resources thin across various media formats. The contrasting success of other labels like Tips Music, which has thrived by maintaining a streamlined focus on music, highlights the risks inherent in Sare Gama's diversified strategy and prompts investors to question its approach.
1.
Sare Gama's Strategic Shift: Embracing YouTube for Music Success
2024 was a defining year for Saregama, one of India’s oldest music labels.
This is a company that has been around for well over a century. For a long time now, it has been associated with the kind of music your parents and grandparents grew up listening to – the classics, evergreen Bollywood numbers, Ghazals, Carnatic music…you get the drift.
But this year, something changed. Saregama made it clear that it was done banking on old melodies alone. It has been on a mission to make fresh hits. And that mission has largely been successful thanks to Youtube.
But there is a flip side to this strategy. In the Youtube-Saregama relationship, the former holds all the power.
Tune in.
Daybreak is produced from the newsroom of The Ken, India’s first subscriber-only business news platform. Subscribe for more exclusive, deeply-reported, and analytical business stories.
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