Music labels are strategically investing in film production to address the limitations of streaming revenue, with Saregama committing ₹325 crore to Bhansali’s company and Universal Music acquiring a 30% stake in Excel Entertainment. With streaming payouts ranging from ₹0.05 to ₹0.10 per stream, labels are exploring diversified revenue through film distribution rights, royalties, and global syndication. This integration allows labels to take control of content creation from the outset, rather than relying solely on platform economics, effectively transforming them into comprehensive entertainment companies.
This trend marks a significant shift in the entertainment sector, highlighted by notable recent investments that underscore the growing interplay between music and film industries. The current streaming landscape has proven challenging for music labels, prompting a search for alternative revenue streams. According to Anushree Rauta, an equity partner at ANM Global, the Indian music industry, while expanding, faces issues like limited pricing power and dependence on external content. Film and OTT platforms offer more varied revenue opportunities compared to conventional music distribution.
Rahul Hingmire, managing partner at Vis Legis Law Practice, points out that music labels’ reliance on aggregators for discovery and pricing is altered by entering film production, allowing them to influence the intellectual property cycle from the script and casting stages. This collaboration is advantageous for both music labels and film studios, as they confront unique challenges such as unpredictable theatrical revenues and selective OTT commissions.
Charu Malhotra, co-founder of Primus Partners, describes this movement as a strategic integration where music labels not only monetize soundtracks but also engage in the content creation process. Saregama exemplifies this shift by reducing reliance on downstream licensing through strategic acquisitions.
According to Gaurav Dagaonkar, CEO of Hoopr, this transition signifies a deeper evolution from rights holders to ecosystem owners. By investing in film studios, labels gain early influence over storytelling, allowing for the organic integration of music into narratives. Ashima Obhan, a senior partner at Obhan & Associates, anticipates that labels will pursue a dual strategy of preserving their music heritage while expanding aggressively into film and series production.
Hardeep Sachdeva from AZB & Partners concludes that content production will be a key growth driver, essential for maintaining relevance in a market where consumer attention is platform-agnostic. This shift positions music labels as integrated entertainment companies, where music and film content complement each other rather than compete.
