Saregama India Limited (SAREGAMA) Q4 FY23 Earnings Concall Transcript

Saregama India Limited (NSE:SAREGAMA) Q4 FY23 Earnings Concall dated May. 19, 2023.

Corporate Participants:

Vikram Mehra — Managing Director

Analysts:

Bhupendra Tiwary — ICICI Securities Limited — Analyst

Bala Murali — Oman Investment Advisors — Analyst

Dhruv Rathod — Solidarity Investment Managers — Analyst

CA Garvit Goyal — Nvest Research — Analyst

Ravi Kumar Naredi — Naredi Investment Private Limited — Analyst

Devanshu Sampat — Avendus Wealth — Analyst

Shubham Ajmera — SOIC Ventures LLP — Analyst

Presentation:

Operator

Ladies and gentlemen, good day, and welcome to the Q4 FY’23 Earnings Conference Call of Saregama India Limited hosted by ICICI Securities. [Operator Instructions] And there will be an opportunity for you to ask questions after the presentation concludes. [Operator Instructions] Please note that this conference is being recorded.

I now hand the conference over to Mr. Bhupendra Tiwary from ICICI Securities Limited. Thank you, and over to you, sir.

Bhupendra Tiwary — ICICI Securities Limited — Analyst

Thank you, Michelle. So welcome, everyone. On behalf of ICICI Securities, we welcome you to the Q4 FY’23 results conference call of Saregama India Limited. From the management we have Mr. Vikram Mehra, who is the Managing Director; Mr. Pankaj Chaturvedi who is the CFO; Mr. Saket Sah, who is Head Investor Relations; And Mr. Pankaj Kedia who is Vice President, Investor Relations.

So without much ado, I’ll hand over to Vikram who will give the opening remark, post which we’ll take the Q&A. Over to you, Vikram.

Vikram Mehra — Managing Director

Hi, good evening, everyone. What an eventful year for us to see people, see this impact of the digital revolution playing out along with our content play. So financial year ’23 saw our operating revenues of INR751 crore, and a PAT of INR189 crore, which basically means on an year-on-year basis, our revenue has grown on by 29%, while PAT has grown up by 24%. In fact what I’m more proud of that, this is not a one-off journey. If you actually see our seven-year journey, which we have also shared in our corporate presentation, our revenue has been growing at 23% CAGR for the last seven years now. While our profits have been growing at 59% CAGR.

I have always requested all of you people, and I continue requesting please look at our numbers always on an annual basis, and not on a quarterly basis. Our business unfortunately cannot be analyzed on a quarterly basis. One, because of the seasonality that displays a very important role here. Advertising revenues completely fluctuate depending on the seasonality. And second, the accounting treatment of our overflows. We booked them whenever the overflows come in, and the nature of advertising and overflows is such that for us quarter three is our biggest quarter, then is quarter two, then quarter four, and then quarter one. So whenever you are analyzing us either do on a financial year basis or on a rolling 12 month basis.

Our growth has been great, but I am very confident that we have still just touched the tip of the iceberg. The digital consumption in our country is not going to stop. It’s going up both in terms of more people coming into the bandwagon of buying a smartphone, and also people who have a smartphone consuming that much more content on their smartphone. Content can be anything, it can be audio, it can be video, it can even be gaming. But overall, as people get hooked on to this digital economy, they will end up consuming content connected to company like Saregama.

We are also seeing more and more people are getting comfortable with the payment economy that fits behind digital. Five years ago nobody used to go out there and pay. Today’s younger generation is getting more and more comfortable to pay for gaming. The good part is, if you pay for gaming, you’re going to be equally comfortable paying for other audio or video content, which from our perspective looks like a great future. We are both not just advertising-based revenue, but subscription based revenue may also kick in, improving the profitability of an IP-owning company like Saregama. Remember with technology platforms fortunes change. For pure-play content IP company like ours, our Lag Jaa Gale song was a super-hit 60 years ago also, 30 years ago also and today also one of the top songs of the country. And that’s the beauty of audio or video IP-owning companies.

Let me brief you on the status of a de-merger scheme, which was approved by the shareholders. The current status is that the application for de-merger was heard by NCLT on 28th of April. The pronouncement of the order is still pending. Awaiting the final order sanctioning the scheme, our financial results have been prepared without giving the effect of de-merger. Once we get the order the scheme will be effective and necessary revisions are going to be made in the financials.

Let me start with the music piece. I think the biggest industry change that I have been talking for now a couple of years have started rolling up, which is the movement of streaming platforms from being a free platform to a subscription-based platform. We saw three our platforms during this year raising their hands and saying and announcing formally that they want to move completely behind a paid wall, which means out of the nine platforms, six platforms are going to be now behind the paid wall. I have repeatedly explained this that a song which is heard by a paid subscriber is commercially that much better for us than a song which is heard by a free customer.

Globally, if we look at it, we are seeing around 589 million people were paying for music subscription and listening to music that way. In fact, 67% of music industry revenue actually came from paid streaming. That number is very, very small in India. Just imagine if you are making this much amount of money when paid subscription is yet to take off, what will happen once it takes off. And the signs are now there. There is only three platforms that are left right now haven’t turned paid.

I’ll again warn that in the short run, it will create pressure on all of us. If people go behind a paid wall, you will see the monthly active user base falling in the short run. But on a short to medium-term basis, I see far more money being made by all stakeholders including the IP owners like Saregama. And since we are sitting on the bulk of the music IP, I think we will have one of the biggest advantages you’re going to see right now of subscription base economy taking off.

The other advance thing that works really to our advantage is that we have a very strong catalogue in the southern part of the country, Malayalam, Tamil, Telugu, Kannada. We are seeing traditionally whenever a paid subscription has taken off, it’s led more by the South Indian state first, and then it starts moving more towards the North Indian states. Since we have a larger share of the South Indian languages content, we believe we will have a big advantage as India starts moving towards subscription.

Our licensing revenue this year grew by more than 20% for fifth year in a row. And the big driver for this growth have been new content acquisition. The thing which almost sounds unbelievable to most people and at times even to us is that, if I look at the financial year ’23, 48% of our revenue actually came from music, which have been released post 2000. People often call Saregama as a catalogue company. I can hardly call it a catalogue with close to — and close to 50% of my revenues are actually flowing from 21st century music.

What makes us even more proud is not just the fact that we are picking up a lot of music in Telugu, Malayalam, Hindi, Bhojpuri, Gujarati, but the fact that we are picking up winners. We are not — it’s not about just picking up songs that are coming out, that’s an easy thing anybody can do it. It’s about being very, very stringent about the — about how you go of picking up the music. Investment that we people have made in data analytics, predictive modeling, and the entire decentralized decision-taking process where one person sitting in Bombay at the senior level is not taking the decisions. People who are locally based who and with KRAs and the back-end system, which are very strong that we can — we can control and evaluate what they are doing. They use to take the help of the data models, which have been created, they are taking the decisions, which net-net result is, is allowing us to pick winners and performance, which is far better than any of our competitors.

Why should you believe me, what I am saying. It’s very easy to claim this. Please go out there and checkout my corporate presentation. This year we have actually given data point after data point in each of the languages, showing that how our songs are scoring extremely well in all the major charts that are announced by all the streaming platforms and YouTube. So we have given examples of Spotify charts, we have given example of YouTube numbers here. Have a look and you will realize that our content selection is really clicking.

In fact, if I look at YouTube alone, 11 of our songs released in 2022 have already crossed 100 million views on our own channels. Forget the — these are same content, which creating more views right now on user-generated channels, which in our case are typically ratio of 1:2. Our own channels, these songs have already crossed 100 million number. This is only 2022 releases. I’m not even talking of our older releases, Kishore Da, and Rafi Sahab’s music is not included here. This is the latest music you are talking about. There is Hindi sitting in there, there is Telugu sitting in out there, there is Bhojpuri sitting in there.

If you look at the subscriber base of all the channels that Saregama has, and similarly for all our competition, thus — we did not have the largest subscriber base on YouTube, because we did not own too much of video content, in fact all the content we own pre-2000 is primarily only audio. So we did not have too much of a play on the video side. Now that we are investing in the newer content, which comes along with the video, the subscriber growth rate, not the absolute numbers yet. But the growth rate that the subscriber base of all Saregama music channels vis-a-vis everybody else’s complete aggregate number of music channels, we are growing at the fastest rate in the market.

Apart from the work that we people are doing on the way we select music, data analytics, predictive models, decentralized decision-making process, all that being one, I think the other big key is a partnership that we have been able to strike with all the major production houses. I have stated in the past, even while the QIP was being done, that time also I was asked this a lot that why do we believe we have a chance to win. And I said, one of the big reasons is the old partnerships we have with majority of the production houses. We people had procured music from the same production houses than maybe their grandfather or the parents of the current generation were working. And we have been paying royalty to them for since a very, very long time. So there is an innate belief in the fairness at which Saregama deals with the market.

What is the net result? Today whether it’s Dharma, which is Karan Johar’s production house or Sanjay Leela Bhansali or Vidhu Vinod Chopra or Mythri, which is the Pushpa production house, all of those people are very, very comfortable now dealing with Saregama, and have granted the music of their films to Saregama. Again, repeating, 48% of Saregama’s revenue actually comes from music, which has been released after 2000. Unbelievable even for us. This year saw us taking a leadership position in new content. And the criteria of leadership is view generated on YouTube through new content. We are already the number one player right now in Telugu, Malayalam, Bhojpuri and Gujarati. This year as we people move ahead right now, we plan to take leadership position also in Hindi and Tamil.

With multiple big musical films getting released from our side, we believe right now the numbers will swell. If I look at quarter one alone this year, you are going to be seeing, we already released the first song of a big Vijay Deverakonda and Samantha’s movie called Kushi. The first song of Vicky Kaushal and Sara Ali Khan’s Zara Hatke Zara Bachke, being released two days ago, we are expecting songs of Ranveer Singh, Alia Bhatt, Karan Johar movie Rocky Rani Ki Prem Kahani starting from the month of June.

Even if I look at the other languages, this year is going to see big releases including Ajay Devgn’s Maidaan, Vicky Kaushal’s other movie called Rola. Tamil superstar Suriya’s two of the films are going to get released this year, and music is with us. Malayalam superstar Mohanlal’s Malaikottai Vaaliban or Mammootty’s Bazooka. There are big movies, all lined up, all schedule date. So you are going to be seeing big numbers. Yes, obviously there will be an immediate impact of that on the financials too both on the revenue side and the cost side. For that matter, if I look at my quarter one this year, FY’24, our content cost may just be double of what we people paid last year. But you will start seeing the impact of that on the revenue also immediately.

This is new content. And we talk a lot about new content. But I’ll also want to share with you right now the amazing work, which has been happening on the catalogue side. Now this is the older content we are talking about. We have shared this year in our corporate presentation the revenue growth that we have seen over the last four years in all our catalogue music, basis the decade of their release. Now why will people go out there and listen to the older music? One, we are promoting that older music a lot on platforms like Instagram and YouTube shots, we ensure many more influencers who are very active in this media end up using our songs in every reel that those people are creating, many of them are paid, many are free, partner deals, all kind of work is going on, ensuring that the younger generation keeps on getting exposed to this older music.

But the even bigger job which is happening is, we are creating versions of this music, which make this older songs even more relevant to the younger crowd. Now whether it was the Mera Dil Ye Pukare Aaja, now which became a huge phenomena some seven months back, or a Nadiya Ke Paar song right, which is now a huge phenomena going on. These are what? These are lo-fi versions, trap mix version, acoustic versions or dance covers. This new age content, which is basis the older content only which we people are releasing typically on a zero upfront cost, we ask creator economy to create content for us only on a royalty sharing basis. We typically end up giving 10% royalties to all these people, which is now resulting on some high-quality content coming to us and in large numbers. We have also opened up a consumer scheme whereby we are inviting every bathroom singer in this country to start sending their own version of the big Saregama songs, retro songs. And all these are then uploaded on a special YouTube channel, and whatever money is made by us, we share 10% royalties with them.

So suddenly you have somebody sitting in a Meerut or a Jabalpur or a Ujjain also now getting a chance to sing Lag Ja Gale or Mere Sapno Ki Rani Kab Aayegi Tu. Put the stuff up, this came as about quantity also, they — since they create the content, one, they get invested in that content and they listen to the content that much more on streaming applications. When they create their own version, they tell their friends, families. Some of those versions breakout and everybody makes money out of it. What is the net-net impact? Imagine the music, which was created and released by us in ’80s or ’90s has also grown up by over 19% on revenue perspective in the financial year ’23. So this year were 19%, last year was single-digit, but the fact of life is this is 40, 50 year old song that you’re talking about. Last four years, every year we have seen growth in the money that we are making even from a catalogue. So while we keep on investing in newer content and keep this company ready for 2050, at the same time, we will not let go of any opportunity to make more money from the catalogue.

One other part I want to inform you people is, whenever we create a new version of a song, take any song, Jumma Chumma, we create a new version of that song, the new song ends up getting a fresh copyright life. So the newer song becomes popular, that means you’re keeping the older song alive through the new songs in that 60 years sound recording copyright like that starts getting included. Publishing rights are anyway moving right now at a much longer basis. So it is a win-win situation this entire endeavor of pushing more and more of the catalogue music. And it’s not happening by chance. Like we have a new content departments within the company, so there is a Bhojpuri team, which is a separate new content. Hindi is separate, Bengali is separate, Gujarati is separate, Tamil is separate, Telugu is separate here. There are people who are in charge. Similarly, now we have a full-fledged catalogue team whose only job is to create versions of this and find innovative ways to go out there and market it.

Financial year ’23 also saw at the industry level a big resolution of an old conflict that we were — constantly happening — having with these singers. Their association called ISRA has been on loggerheads with music labels about an old conflict. We have been thankfully been able to resolve it at the later part of the last financial year. The good part now is that ISRA will not be reaching out to any of the customers now. These customers may be Saregama — our digital customers or our hotel or a wedding, all these people were approached now earlier by music labels for the sound recording right, and by IPRS for the publishing rights, both ways we were making money. Now, ISRA was also going in and asking a separate — money for the separate right, which was creating some amount of disturbance in the market. And more importantly the two stakeholders have to work together were working in conflict.

Thankfully with the blessing of Honorable Minister, Piyush Goyal Ji, we have been able to resolve this issue once and for all. Now instead of a conflict, singers actually work with us. The deal is that they will be paid 25% of all the public performance revenue that we people create. What is public performance revenue? The money that we collect right now from a hotel or from a event or a function or a wedding or a concert, that money which we people were collecting, 25% of that money is now going to flow to singers. But singers in turn are going to work with us and ensure that the public performance revenue overall goes up.

So I’m — if the initial month is anything to go by, we are already seeing that the royalty hit that we’ll end up getting because of this 25% of public performance revenue going to them will be more than compensated by an increase in the public performance revenue. Anyway the short-term problem of this royalty payout has been that entire financial year ’23 royalty payout to singers got booked in quarter four. One of the reasons why you will see quarter four margins looking a little lower compared to quarter three because the entire royalty payout for the 12 months has happened in a single quarter. But as we people go forward, the royalty payments are going to be happening on a quarterly basis.

The fear can be, does this mean that the overall royalty payout that Saregama talks about between 12% to 15%, does that go up? Good news is, no. As a percentage also the increase that we people will have because of the royalty payouts for singer more than gets compensated by the reduction in the royalties that we are paying for the newer content because more and more of a newer content is coming on the regional side, which we people procure on a one-time payment basis and zero royalties getting attributed to them. So if you look at our numbers also, you will see that as a percentage quarter four royalties have gone up as a percentage because they’re one-time payment of all the four quarters hitting in a single quarter. But if you see it on annual level, our royalty payouts have actually come down as a percentage.

My last part, in music, it will be — I’ll be missing if I don’t talk about the play of artificial intelligence. There are various views being taken of how AI is going to be affecting the industry. We don’t want to — we want to be ahead of the curve, we for the last 12 months or so have been building our own understanding and a knowledge bank in the world of AI. We are working with some of the leading institutions in this particular space, and investing a lot internally on the relevant manpower so that we are ahead of the curve. We are actually, if you ask me, pretty excited about the value that AI will bring in to a content creation company like us. It can help us with a huge database of forms that we people are sitting on, literally the golden catalogue of music in this country, we are in a great position to allow the AI learning engine to learn on our stuff and help us predict even better as to what kind of a music is going to be working in which genre. We believe our investments which were done in the data analytics is what is helping us today have a better success rate than any other player in the market. And our investments, which are going in the area of artificial intelligence are going to help us a lot in two years to three years to come.

Carvaan, our retail business. Carvaan maintains its growth trajectory during the year. We on a unit basis grew by 40% odd to touch a sale of 5.6 lakhs during the year, compared to the 4 lakh sale that we did last year. It has actually helped us write a very small positive margin this year. But I think the more heartening part for ourselves, that this is fourth year in a row, there has been no marketing that’s going on, and still the brand is able to go and keep on growing up purely basis its own consumer pull. Yes, the large contributor of the sales driver this year for Carvaan brand has been the Carvaan Mobile, which allowed us to grow at a lower price point, which also explains why the revenue growth in Carvaan is lower than the unit sales growth because Carvaan Mobile is coming at a lower price point.

But overall, I think we are — we maintain our positive outlook towards Carvaan numbers, we will continue pushing Carvaan in the market here without putting any major marketing efforts behind it. Remember it’s not just the very small breakeven or a small contribution margin because of which we are in the world of Carvaan. Carvaan helps a lot on the catalogue side. Now there is enough amount of data sitting out there with us which is proved a causal effect relationship between the songs, which are put in Carvaan, and the song which are growing at the fastest rate on the streaming platforms.

Let me clarify when we say we put 5,000 plus songs in a Carvaan, they are not our biggest 5,000 songs. They are 5,000 songs from say in Hindi, whatever 23,000 24,000 our number is, from that 5,000 songs have been picked up, so that they do justice to all the singers whose station has been created, or all the composers whose station has been created within Carvaan. They are not necessarily our top 5,000 songs. We saw data, which is very clearly saying, whichever songs we are putting in Carvaan, actually on digital also, grow the fastest. We were surprised by this, we did a lot of qualitative study here. And we came back to the conclusion now that if most tones in Carvaan has heard, the middle age and the older age people are not hearing Carvaan through earphones or headphones, they actually use it as a speaker and keep it on during the daytime.

There is a lot of passive listening of those great older songs being done also by the younger age group. Many of the songs are — some are liked by that generation a lot because now they are, in a way forced to listen to that. And they start growing a fascination and a liking for those songs, end up consuming those songs that much more on streaming platforms. So Carvaan has is playing this big role for us, from catalogue marketing perspective too, but that doesn’t mean we’ll ever allow Carvaan to get into losses, this world of Carvaan that we people are in will always be breakeven or hopefully like we saw in this year a small contribution margin coming from its side.

The films series and events vertical touched the highest ever revenue this year. It crossed a number of INR150 crore in financial year ’23. Let me talk about each of these three verticals in detail. Movie business which has started around five years to six years ago has now started delivering steady profits. We have been able to establish our reputation in the market. We — the volume that we people have right now allows us to get the cost optimization done, so both on the cost side, the volume is helping us on the revenue side since we have now an established reputation, we are able to go out there and ensure a decent margin for our films.

This was in fact our first year where the focus moved more on actual release of our theatrical films. We released two of our Malayalam films, and one Punjabi film in the theater and got very good reaction. This is also now I’m happy to share with you that one of our films called Agra, it’s an unreleased film has actually got selected in the super prestigious Directors’ Fortnight at Cannes this year. So my team is sitting out there in Cannes as is half of the Bollywood world where the movie premier is going to be happening in the Directors’ Fortnight. It’s a very big thing, very, very few movies end up getting rights at the Cannes Directors’ Fortnight level.

It just shows that the paths that we people have chosen in terms of creating good quality commercial cinema is working out. We people plan to scale this business even further next year, but the basic principles remain the same. We are not going to be taking big risks, we will work only on those films — only on regional films where we can secure a large part of our revenue through digital and TV rights sale.

Coming to the web series business, we finally after working for these many years were able to get a break in a web series business and we have successfully released two of our web series, first is a series called Hunter with Suniel Shetty. And the second is a series called United Kacche with Sunil Grover. Both of them were released on the digital platform this year. As these were our first series releases, we were not able to get enough breaks on the series side. We have just put our best foot forward, and which means that we have literally released these on a cost recovery model basis. We did not keep margins with ourselves because we wanted to show to the world that we can create high-quality content.

I want to give you guys comfort right now, we have not written any losses here. But this is literally on a cost basis that these two series have been gone out. We are very, very hopeful that, for both these series, there is a high probability either we get a second season or looking at this series somebody else may end up giving further number of series across to us. So it’s a good start which has happened out here on the series business. In the long-run as the reputation starts building up, in series business too, we will very comfortably end up making 15% margins.

The third vertical, which literally was given life in this financial year was the events vertical. We did multiple concerts with Diljit Dosanjh with at the global level, this was absolutely first time for us, India, US, Canada. And we also launched our musical IP called Disco Dancer-The Musical. Please keep in mind, I’ve been saying this for last four quarters now, please keep this in mind, events business is where our films business or a new music business or a Carvaan business was six years to seven years back. We are in a stage right now, we were just establishing this business. There will be losses that will be written in the short term on this. But as we people go forward in a 12 months to 18 months horizon, we will be able to go and start writing positive margins on it. And the leverage this gives us in our music business anyways is the icing on the cake.

But to give you guys comfort, I want to state something else also too, which is an internal policy, which we will share with you now. While we continue to grow our films, series, and events vertical, film, series, and events vertical, but we will be extremely cautious in our approach as we people take it forward. We — our internal policy is very clear on it that the total capital allocation to films, series, and events business will never exceed 18% of the capital deployed at any particular time in the company. I’m repeating myself, the total capital allocation to films, series, and events business will never exceed more than 18% of the total capital deployed by the company at any particular time.

So there are various checks and balances, which are sitting in place out here. Only once we get our comfort — if we ever are changing this capital allocation policy, we will come back to you people. But at this juncture, we are very confident that we should be able to grow our — this business vertical at over 25% year-on-year and write a profit — films are profitable, series should get profitable as we people — the Bengali [Phonetic] series is not a lost thing, it’s a cost-plus only. Events vertical in next 12 months to 18 months will turn positive.

On the last part, which is the television serial world of us, we retired two of our super successful Tamil serials, both of them had completed over 1,200 episodes each, and replace them with two new serials called Iniya and Ilakkiya, like it has become a norm here, all the serials end up getting becoming a slot leader from the word go. Both these serials are doing extremely well on Sun TV, and leading their respective slots on the Tamil TV content side. And like always we people own the IP of all these serials we are creating for Sun TV, putting us in a unique position of being the only production house, which can go out and claim this.

So ladies and gentlemen, a great year for us, on all the verticals of ours; music licensing, music retailing, films, events, and series. I’ll be happy to take any questions from your side now.

Questions and Answers:

Operator

Thank you very much, sir. We will now begin the question-and-answer session. [Operator Instructions] We have the first question from the line of Bala Murali [Phonetic] from Oman Investment Advisors. Please go ahead.

Bala Murali — Oman Investment Advisors — Analyst

Yeah, good evening. I want to know about this film side business, and how many films we are planning to release in this financial year. And are there any films which are satellite rights are due and about to renew in this year?

Vikram Mehra — Managing Director

So the kind of films that we people will be releasing during, that are listed in our corporate presentation. Our focus continues being Malayalam and Punjabi only. We are expecting anything between six to eight of these films to release during the year. So all are in various stages of production at this moment. All I can share with you philosophically, we believe work on film, which in a fashion right now, then majority of them gets secured [Technical Issues] and TV right, not be able to share specific data about which films rights have been sold or not. Films business, the 50% margin, after the entire — the first, and we hold on.

Operator

I’m sorry to interrupt. Sir, there is a lot of background disturbance from your line, Mr. Murali. Mr. Murali?

Bala Murali — Oman Investment Advisors — Analyst

Yeah, yeah.

Operator

There is a lot of background disturbance, sir. We are not able to understand what you’re speaking.

Bala Murali — Oman Investment Advisors — Analyst

No, I haven’t spoken anything. Okay. And so, sir, I’m speaking about that, already the content of films, which you have, any films satellite rights due in the current year or coming year, so that’s what I’m asking.

Vikram Mehra — Managing Director

So, the first set of movies that were put on the digital platform, all I can tell you right now, couple of movies that came out of the digital platforms have now gone out there and the rights have moved to the other digital platform. That’s all I’m in liberty to say. So the second round of monetization of some of our earliest films has just started. As you know, the TV rights, the deals typically happen for a much longer duration. They don’t happen for short durations at all. So none of our movies have come out of that yet. Remember my team — the film business is only a five-year old business.

Bala Murali — Oman Investment Advisors — Analyst

Yeah. Thank you. And lastly on margin side, what would be the projections for this current financial year? How much we can expect there?

Vikram Mehra — Managing Director

On to our adjusted EBITDA percentage of 33 — 30 to 33.

Bala Murali — Oman Investment Advisors — Analyst

Okay. That’s all. Thank you, sir.

Vikram Mehra — Managing Director

Don’t look at this number on a quarterly basis. On an annual basis, adjusted EBITDA, we have been hold — we have been stating this in the range of 32% to 33% and we stick to that.

Bala Murali — Oman Investment Advisors — Analyst

Okay, that’s it. Thank you. Thanks a lot.

Operator

Thank you. We have the next question from the line of Bhupendra Tiwary from ICICI Securities. Please go ahead.

Bhupendra Tiwary — ICICI Securities Limited — Analyst

Yeah, hi, sir. So I had two questions. The first one is on the, if you look at the guidance part, I believe that we have actually have given earlier and I believe it should kind of prevail that, we are looking at 20% to 25% growth in the licensing business going forward also.

Vikram Mehra — Managing Director

Yes.

Bhupendra Tiwary — ICICI Securities Limited — Analyst

But the fact is that we have a strong content releases this year, new content releases this year. So, does that change our stance on the guidance. I mean, of course, the long-term and medium-term kind of visibility is 20%, 25%. But does that change that course for FY’24?

Vikram Mehra — Managing Director

No, actually, it does not right now. We will hold on to these numbers only. Please understand the way our deals are also structured, you don’t get the impact of a new content release overnight. If you’re in a fixed fee deal with somebody, which happens with the short format apps, TV channels, there you don’t get the impact immediately. You will have to wait for the one-year cycle to get over before you actually start seeing the upside on the revenue part. On platforms like YouTube, you see the impact immediately. So we will hold onto this number of 22% to 25% only at this moment.

Bhupendra Tiwary — ICICI Securities Limited — Analyst

Okay, that’s great. Now the second question is on — you alluded to the fact that now six of the — out of the nine streaming platforms are, you know, have turned into paid format and just wanted to understand what is our kind of revenues. I understand it’s low, but what’s the kind of percentage there in terms of subscription part, and how much can it go over the next three years to five years? I’m not talking about the one year, but what do you visualize it going forward, if this is the trend going ahead? I mean —

Vikram Mehra — Managing Director

I’ll explain the match to you again, and you form the judgemental call. It’s a free customer of any OTT application, a streaming application who is listening to the latest Arijit song on an app. On an average we get paid 10 paisa, on an average, right? The nine platforms. Now suppose you are a paid customer of any of these platforms, and suppose you paid INR100 as your monthly charge to that platform because you are a paid customer who does not want to listen to advertising. You come in — then the deals are this way that whatever you have paid, which is INR100, 50% of that money, on an average, 50% is going to be earmarked as what they call content pool. So in INR100, INR50 becomes content pool. This will be divided equally amongst all the songs that you heard during the month.

Bhupendra Tiwary — ICICI Securities Limited — Analyst

Okay.

Vikram Mehra — Managing Director

Average customer listens to 66 songs, 64, 66 songs, suppose you heard 100 songs in the month, that means every song will be worth 50 paisa.

Bhupendra Tiwary — ICICI Securities Limited — Analyst

Okay, okay.

Vikram Mehra — Managing Director

Now assume you’re not — India is not a INR100 per month economy, India maybe the INR50 per month economy, possible. In that case, every song becomes equal to 25 paisa. Now you can do your maths, how big a jump is going to be as streaming services keep on moving towards paid. There will be pain in the very, very short run, as people move from a free and the free stuff because free to pay can only happen if you start turning off the tap of free. So this will fall down and pay will start building up. But as I have shared in my corporate presentation, it was very interesting graph, how the paid subscriber base globally has moved over the last eight years to 10 years.

It shows a steady numbers in which paid starts moving up, once our platforms decide that enough of free, we want to move towards paid. The good news is in India, the piracy incident in the larger towns have fallen dramatically. So the base streaming platforms in Bombay, Delhi, Calcutta, Bangalores or the Jaipur and Ahmedabads of the world start saying, I want to turn pay custom — and you come pay at a reasonable fee, anything between INR50 to INR100 per month. There will be a large number of people who will start moving towards a pay side.

Bhupendra Tiwary — ICICI Securities Limited — Analyst

Okay. Okay. I think that’s a really fair point. And in terms of margin, when we say about, you know, we’ll maintain the EBITDA before content charge, charge of 32%, right. You talked about. Yeah, so now the thing is, I understand, so I just wanted to clarify, I mean, so this year we’ll also see that — those content charges, big content charge is also hitting into the balance sheet. I understand we look at steady state is without content charges how is this the margins. But is it fair to assume that this year, while the revenue growth will also be high, the reported kind of EBITDA might look lower because of the content charge, I mean —

Vikram Mehra — Managing Director

Content charge comes below the adjusted EBITDA.

Bhupendra Tiwary — ICICI Securities Limited — Analyst

Yeah, so I am saying — so that’s why I’m saying, so I understand the EBITDA before content charge guidance, but below part, this year might look, I mean, because the content charge hitting pretty high this year.

Vikram Mehra — Managing Director

See, the whole part is, if the incremental revenue given by the new content is lower than the charge-off connected to the new content, then you are absolutely right. So let’s talk about absolute numbers, not percentages here.

Bhupendra Tiwary — ICICI Securities Limited — Analyst

Okay.

Vikram Mehra — Managing Director

But if the revenue matches and our endeavor will be right now to go back and at least do our revenue matching kind of a part, but the delta — not going to be this way or that way, delta is not going to be very massive. It will be a very marginal delta here and there. So we are not going to come and tell you right now that our PBT has fallen down just because we took a massive charge.

Bhupendra Tiwary — ICICI Securities Limited — Analyst

Got it. Got it. And one last question if I can just squeeze in. Regarding — so we haven’t utilized large, in fact almost most of the part of the things that we raise as QIP. What are the kind of acquisitions, are there acquisitions or the kind of content thing that we are looking to kind of spend on for the money that we kind of raised?

Vikram Mehra — Managing Director

Yes, so we are very, very aggressively — the first let me acknowledge it that we have not been able to pick catalogues primarily because they were coming at your valuation, which were not making sense, we believe right now that was not value accretive. Just because we had the money did not mean we should go on and pick a catalogue at any price at which they were available.

In fact, there were very few — in fact there is no catalogue deal that have happened anywhere in the market, apart from the one single deal that we people had done. We are also not revising the model, earlier our entire thought process was that we will just go and pick up catalogues. Now, we are also looking at that, can we pickup minority stakes moving to an absolute majority in regional music companies, allowing the label — regional label to run with the company for next two, three, five years.

So we come as a minority now, we help them out, and then pick up the majority or an absolute number right now in next three years to five years. So that’s another model we people are looking at. And I am hopeful that we should be able to go back and strike deals. But one thing I am again assuring you, just because the money is sitting with us, we are not going to pick up catalogue at bizarre prices.

Bhupendra Tiwary — ICICI Securities Limited — Analyst

Thanks a lot sir. That was very, very clear. Thank you.

Operator

Thank you. The next question is from the line of Dhruv Rathod from Solidarity Investment Managers. Please go ahead.

Dhruv Rathod — Solidarity Investment Managers — Analyst

Hello, good evening, sir. Actually I had a few questions, as the telecom companies focus on the ARPU growth, right, and they will be taking mobile data prices up, so do you see that impacting on music label business if audio or video streaming would drop?

Vikram Mehra — Managing Director

This — again you’re asking me to do crystal ball gaming. All — if you ask the pure financial part right now, how can I tell you right now that if the prices go doubles tomorrow, which I see very unlikely, but that people, the consumption will not come down, it looks that consumption should come down, but I am going to counter it with the cultural change that you’re seeing in the country. If for five minutes, I go out there and tell you that I want to pause this call, almost 70% to 80% of everybody on this phone call right now is going to take out their mobile phone, even if nobody has send them a WhatsApp, they will still take out the mobile phone and they will try to kill their time by watching something. If nothing else, then an Instagram feed.

We, as Indians, don’t know what to do even with two minutes of free with that, apart from taking out a phone and consuming something. And it’s not just the upper strata of the society. Next time you go for a morning walk or an evening walk, please look into every auto-wala, taxi-wala who is waiting there, you will find them on their phones, and they’re not gaming, they’re watching video or in turn listening to music. In that kind of a world right now looks very unlikely that just because content — the data rates go up marginally, that the consumption is going to fall down in a dramatic fashion.

That’s my belief. Also you just see what’s happening on the television part, another very good indicator. There are 22 million connected television which are active on a monthly basis now. I’m an ex-Tata Sky person, I would have never imagined that connected televisions is going to become a way of life for people like us. So that’s the upper strata of the society. The lower strata of the society is going to continue watching everything on the mobile phone. So a 10%, 20%, 30% increase in the data rates, I don’t think is going to impact the content consumption at all.

Dhruv Rathod — Solidarity Investment Managers — Analyst

Got it. Thanks. As the second question was around, as like we know interest rates have been rising globally, and start-ups are seeing challenges in raising equity funding at that point. So, are we seeing any slowdown in YouTube ad revenues because of this?

Vikram Mehra — Managing Director

Actually that’s a funny part. We saw a slowdown last year for two quarters, which was a start-up revenues were coming down, but they got comp and more than compensated by the FMCG increase, durable increase and services increase. So we wouldn’t have been able to write right now this over 23% increase in music licensing revenue, if YouTube numbers had fallen down. Remember we are very dependent on advertising, YouTube revenue, which is for music and even my TV serials business is dependent on advertising. We have not seen a slowdown honestly, only startup money is not there.

Dhruv Rathod — Solidarity Investment Managers — Analyst

Okay. Lastly what is the share of music label revenues from YouTube in FY’23?

Vikram Mehra — Managing Director

We don’t give vertical-wise. But if I look at all the three verticals of digital, which is streaming or music streaming, video streaming and short format apps, they together for us are anything between 70% to 75%.

Dhruv Rathod — Solidarity Investment Managers — Analyst

Okay. Thank you. Thank you so much.

Operator

Thank you. [Operator Instructions] The next question is from the line of CA Garvit Goyal from Nvest Research. Please go ahead.

CA Garvit Goyal — Nvest Research — Analyst

Hello. Good evening, sir. Am I audible?

Vikram Mehra — Managing Director

Yes, please.

CA Garvit Goyal — Nvest Research — Analyst

Okay. Yes, sir. So my first question is on the capital allocation side. Our ROCE fell to 14% now versus 18% last year and second thing is, our CFO/EBITDA almost fell to 39% as compared to our average ratio of 70% for last five years. PAT growth that we did in FY’23 is coming at the cost of ROCE and cash realization. Further if I exclude the profit on sale of investment in mutual fund, our PAT has only grown by 12% as against our sale growth of 29%.

So the point here is, despite having a significant presence in industry and good management experience, why we are not able to utilize the capital in efficient manner. And similar thing that we have yet to decide with what to do with that 750 CRO fund raise that even after one and a half years. So means we raise it to add some value for the shareholders. And since last one and a half year, we did not make any material announcement, in terms of understanding, actually there was a plan at that time, there should have been some progress on that or like I think it’s wrong for shareholders company raising funds citing that we don’t want to lose in the opportunity. And those opportunities didn’t appear even after one and a half year. So please throw some light on exactly what is happening in where — where we are actually lacking particularly focusing on that QIP utilization and this film segment as well, that is ultimately that is relating [Phonetic] to our bottom line.

Vikram Mehra — Managing Director

So I’m not going to — I just repeated this and Bhupendra asked me the same question. I’m not going to run away from the fact that we have not bought — apart from one catalogue, we have not been able to buy any other music catalogue out in the market, because they were coming at multiples that would have gone out there and hurt the shareholder valuation right now for Saregama as a company. Did not make sense to pay those kind of multiples. The negotiation position becomes at times a little difficult when the other party knows that you are under pressure to go and utilize your funds, they think they can get away with higher prices and did not make financial sense to us.

So I acknowledge it, accept it, that we have not been able to deploy funds at the rate that we would have liked to do that. However tempting it may be for us, we will not utilize these funds for any vertical apart from music. These funds were not picked up for my retail business or films business or events business, which are all getting funded right now out of the internal accruals itself. We will keep the funds and look at various aspects on the music side alone, saying how do I use these funds in ways in which it can help the music business to grow.

I am reasonably hopeful, unless a deal is done — it’s not done, but I am reasonably hopeful this year, you will see right now, under the new structure that we are ready to work with, whereby we are ready to come as a minority player and then give a chance to the owner of that company to build value — further value in that company and then buyout the entire absolute majority. Under those models, we should have some successful deals happening this year.

CA Garvit Goyal — Nvest Research — Analyst

Understood sir. And on product mix side, so basically our product mix is changing like film and publication contributed approx 18% to our revenues in FY’22. Now it is I think 23% around. So — but these segments cumulatively doing only 2% to 3% of whatever revenues they are generating. So my question is, is it going to be in the same way for us going forward or are we going to improve it because if the situation doesn’t change, then we will see further decline in our ROCE, sir?

Vikram Mehra — Managing Director

So again the part is, first publishing business has already, has been announced right now has been demerged out of the company. So I did speak about it in my opening comments that we are just awaiting the final go-ahead from NCLT, and the publishing business gets demerged as part of the demerged entity. So that will not be there with us. Regarding the other two businesses, see the nature of the biz is, not all business is going to be like music business, but we want to be then other businesses also because they are symbiotic businesses to music business. Our films business will remain a 15% to 20% margin business, but the good part is we are not allocating more than 18% of our total capital out here at any particular time to the films business. The majority of our money will get allocated only to the music business, which is the highest margin business.

CA Garvit Goyal — Nvest Research — Analyst

So can’t we consider demerging this films segment as well, like you are doing this —

Vikram Mehra — Managing Director

It adds lot of value to our music business. It’s not just us who has got the films business. All our competitors — if you checkout all the other music labels that are there, I don’t want to take their names, but if you look at who are the top three, four music labels in the country, all of them got a film business. It gives you a huge edge in the music business if you also control the films.

CA Garvit Goyal — Nvest Research — Analyst

Understood sir. And sir, you mentioned new courses [Phonetic] are coming — not P&L, this particular year. And incremental revenue is also likely to match those courses [Phonetic]. So, overall this year likely to be EPS accretive for the shareholders or we can say, it can be muted one?

Vikram Mehra — Managing Director

The only part I can go back and tell you right now, I’m not going to comment on that one. The only future numbers that we are giving here is, music licensing revenue should grow anything between 22% to 25%. Film, series, events business will be growing around 25% during the year. Events will remain under pressure, but the quantum is not going to be that big. Carvaan business will remain between a breakeven to a very, very small margin business. Our adjusted EBITDA for the company should be anything between 30% to 33%.

CA Garvit Goyal — Nvest Research — Analyst

Okay sir. Understood, sir. And last one is like, basically we did a QIP and seems that amount was invested in quoted mutual funds. So these are the debt oriented mutual funds or equity arrangements?

Vikram Mehra — Managing Director

Debt only, please. Our biggest criteria is to secure the capital.

CA Garvit Goyal — Nvest Research — Analyst

Okay, understood sir. Thank you very much. And all the best.

Operator

Thank you. The next question is from the line of Ravi Kumar Naredi from Naredi Investment Private Limited. Please go ahead.

Ravi Kumar Naredi — Naredi Investment Private Limited — Analyst

Yes sir, yes sir. Again good result. Sir, [Foreign Speech] my question and my concern is that, when we raise through fund from QIP, our market cap is not rising, please use this fund so fast so we may take — we may get the suitable return from that investment.

Vikram Mehra — Managing Director

Done, sir. That’s my biggest KRA also.

Ravi Kumar Naredi — Naredi Investment Private Limited — Analyst

Okay.

Vikram Mehra — Managing Director

[Foreign Speech] That’s very wrong way and a short-term way of looking.

Ravi Kumar Naredi — Naredi Investment Private Limited — Analyst

[Foreign Speech]

Vikram Mehra — Managing Director

The couple of things that we’re looking at right now, the valuations just went through the roof at that particular time and was not making sense for us to go back. But the whole part is that, can I go out there and pick something up at a multiple right now which is slightly lower than mine or be in a position to increase the revenue that much that I can make more money out of it [Foreign Speech] it’s shareholder accretive, value accretive, otherwise [Foreign Speech]. But you will see progress happening on that. If you ask me, what’s the only thing that keeps me awake at night? This is the one.

Ravi Kumar Naredi — Naredi Investment Private Limited — Analyst

No problem, sir. Sir, and what is the policy to charge content cost from profit and loss account quarterly basis or yearly basis?

Vikram Mehra — Managing Director

On a monthly basis.

Ravi Kumar Naredi — Naredi Investment Private Limited — Analyst

Monthly basis.

Vikram Mehra — Managing Director

Quarterly. Yeah.

Ravi Kumar Naredi — Naredi Investment Private Limited — Analyst

How much cost we charge?

Vikram Mehra — Managing Director

So what is there right now is that the entire amortization of this — charging off is happening over a period of 10 years. Marketing gets charged off, immediately 100% in year one itself. In fact in the month one itself. While the content cost gets charged off over a period of 10 years and it’s not a straight line. We take the biggest hit right now in year one, and then year two and then it’s a flat straight line. I’ll — what I’ll ask right now, I’ll ask Pankaj to send you the entire charge of structure. And on the films, we are charging of the entire cost of the film in year one itself.

Ravi Kumar Naredi — Naredi Investment Private Limited — Analyst

That’s right, right. And sir, sundry debtors, right there’s too much, can — I get the bifurcation more than six month out of that figure?

Vikram Mehra — Managing Director

So we will share this information.

Ravi Kumar Naredi — Naredi Investment Private Limited — Analyst

No problem, no problem.

Vikram Mehra — Managing Director

At this juncture, there is no reason to believe for us that there is anything where provisions or bad debts are going to be happening.

Ravi Kumar Naredi — Naredi Investment Private Limited — Analyst

Okay, no problem then. And sir, this last point, what cost of music right. Music right cost is rising too much due to high competition. So how we are dealing with this situation and what is in your mind because you are extraordinary intelligent, so you might be thinking how we must —

Vikram Mehra — Managing Director

Ravi ji, firstly I am not extraordinary intelligent —

Ravi Kumar Naredi — Naredi Investment Private Limited — Analyst

No, no. I know, sir.

Vikram Mehra — Managing Director

Competitors will hear it tomorrow, so I can’t tell you how am I managing it. But the financial results are showing. We are — the numbers at this juncture, you can go back and see at anytime. Even as I’m talking to you, on YouTube, if you go out there and see all India trending charts on YouTube. YouTube publishes this on a daily basis. Top 30 songs in the country, trending top 30 songs in the country at anytime at between 7 to 9, right know I am sitting on seven songs, [Indecipherable] nine songs. So they are picking up content, that content is clicking in a very big fashion here and we are still maintaining our profitability.

Ravi Kumar Naredi — Naredi Investment Private Limited — Analyst

Okay. Okay. Thank you. And wishing you all the best, sir.

Vikram Mehra — Managing Director

Thank you, Ravi ji.

Operator

Thank you. The next question is from the line of Bala Murali from Oman Investment Advisors. Please go ahead.

Bala Murali — Oman Investment Advisors — Analyst

Thanks for the opportunity, sir, again. So I have one doubt regarding this paid streaming platforms. You told that out of few platforms, most of them are become paid and one is still pending.

Vikram Mehra — Managing Director

Can’t here you. You need to go a little slow and louder. Can’t hear you.

Bala Murali — Oman Investment Advisors — Analyst

Yeah, regarding this platform, sir, you told that most of the platforms which our songs are streaming are become paid subscription.

Vikram Mehra — Managing Director

Sir, first, most is a very dangerous word to use. You still have — you have three of the platforms that announced that they’re turning pay. Two of them have turned pay, third has shown the intend to turn pay. But the top three platforms are still on the free side. This is — these are platform number four, five and six. So the top three platforms are still offering free service. Now please ask me your question.

Bala Murali — Oman Investment Advisors — Analyst

Okay. That’s all. I got the clarity from that. Then one more thing, sir, regarding this Mango Music acquisition, I observed that, still the songs are playing on their channel. That monetization is coming to Saregama or that monetization — some part of the monetization will go to Mango Music also?

Vikram Mehra — Managing Director

All I can tell you right now, the songs that we people have gone out there and picked up from their site, if the IP belongs to us, often we allow the song to stay out there on somebody else’s YouTube channel also and we claim it 100%. This happens very often. From — I can’t respond to Mango specific to you, but if the IP belongs to us, Youtube ensures right now, 100% of the advertising flows to us.

Bala Murali — Oman Investment Advisors — Analyst

Okay. That’s all. Thank you, sir. Thanks a lot.

Operator

Thank you. The next question is from the line of Devanshu Sampat [Phonetic] from Avendus Wealth. Please go ahead.

Devanshu Sampat — Avendus Wealth — Analyst

Yeah, hello sir. Good evening. A few questions. So can you just give a sense of how the valuations on music content and labelized [Phonetic] changed over the last 1, 1.5 year, right, because, I mean, situation was very different then we raised money. So has the situation eased a bit, which is why we are okay to deploy a little bit to minority stake. Or you [Technical Issues].

Vikram Mehra — Managing Director

Sorry, I’m not clear about your question. And how are the rights of new music —

Devanshu Sampat — Avendus Wealth — Analyst

No, I said the valuation. The valuations of all these labels and music content that you are not comfortable with right now to deploy in one.

Vikram Mehra — Managing Director

Yeah, so more than easing out, see the moment there is a structural change that we are ready to do. There we are telling the label that you may be selling it. You may believe right now you’re selling at a lower price now, but you have a chance to use these funds to make your company big and sell the majority of the stake maybe at a much better valuation later. That model is something that a lot of people are appreciating and understanding.

So I like to believe that some of the people will agree, this is just a catalogue part. There are all kinds of companies which are there on the music side where we can go out there and get into an acquisition deal, which will help overall the space of the music world for us. There is content acquisition and there is this content marketing, both the parts are very, very important. And increasingly, we are seeing a large amount of our content acquisition money that actually going towards the marketing side. So we are looking at all the possibilities now. We are just widening the scope. The only conditions that we people work on, it has to be connected to the world of music for us and second, it has to be shareholder value accretive.

Devanshu Sampat — Avendus Wealth — Analyst

Okay. Okay. And can you give me a sense of, you know, how maybe your top 5 or top 10 songs as you — the new songs in which obviously I believe would be adding to your top line every year. So is there like a very high concentration that happens, especially with the new songs that come out. Is there some idea you can give?

Vikram Mehra — Managing Director

Sir, all I can tell you right now is, see what — our new songs are doing very, very well and you can check out my corporate presentation where we have actually shared raw data there.

Devanshu Sampat — Avendus Wealth — Analyst

No, I’ve seen that. But here, known as two decade gap over. I’m talking about something specific like, which really people are listening to in the last year, was released in the last three, six months something of that sort of.

Vikram Mehra — Managing Director

But those songs that I have shared there — so are you asking me the actual revenue or are you asking me which songs have done well?

Devanshu Sampat — Avendus Wealth — Analyst

No, I’m asking you, the revenue that comes from the top 10.

Vikram Mehra — Managing Director

Sir I am in this market right now. If I start sharing every song revenue that I’m making, how will I survive and do my business dealings here.

Devanshu Sampat — Avendus Wealth — Analyst

Okay. Okay. So —

Vikram Mehra — Managing Director

Second that — I’m telling you now that, what percentage of my overall revenues coming from new content, now I’ve shared with you. How is my catalogue growing, which you can arrive how my new content is growing, you have got that number also. I’m giving you how many new songs I released and how many of those songs were sitting in the top charts of the country, which are Spotify charts. So I’ve given you lots of information at this juncture for you to form an opinion of the quality of music that we people are hearing.

Devanshu Sampat — Avendus Wealth — Analyst

Sure sir. Sure. Sir, and last question, do you have any sense on the growth of the user base, how will this change post the streaming platform once they start charging, once they move to that paid model, do you have any sense? Can you give a sense of how the numbers have changed?

Vikram Mehra — Managing Director

Sir, I can just hazard a guess right now, on the profile of the customers, obviously, the urban customer and slightly better off and more educated customer is going to — is moving to the paid subscription faster. You have people in their 20s who move to paid subscription faster than people in their teens or people in their 40s. You have South Indian states that move to paid subscription faster than you have the North Indian states. So that level the broad definitions are there. But overall we know when that switch happens from somebody allowing all the content available to a free — freely versus saying listen, you need to pay, there will be an immediate drop that happen, and then it starts building up once again. The platform that have taken a call they’re moving towards a pay are going through that kind of a transitional journey.

Devanshu Sampat — Avendus Wealth — Analyst

Got it. Got it. Okay, sir. That’s it from my side. Wishing you all the best.

Vikram Mehra — Managing Director

Thank you.

Operator

Thank you. Ladies and gentlemen, this would be the last question for today, which is from the line of Shubham Ajmera from SOIC Ventures LLP. Please go ahead.

Shubham Ajmera — SOIC Ventures LLP — Analyst

Hello. Yeah, hi, sir. Thanks for providing me the opportunity. Sir I just wanted to know about the potential impact on our business in the event of any streaming platform facing financial difficulties or going bankrupt because of this changes or something like — since they are moving to the fully paid subscription model now.

Vikram Mehra — Managing Director

So, remember this, the customer is still there. Customer — if a particular platform goes out there and shut shops, or is in financial distress, is not able to go out and invest, whatever the reason maybe, the customer will not stop listening to music, they will move to whichever platform is offering it. So we went through this part right now last financial year. The couple of platforms were having issues right now in terms of going then paid wall and not having the monies, bla, bla, bla. You have not seen our revenues falling down. The fall — if a customer does not get favorite song, we just released a Vicky Kaushal song sung by Arijit two days ago, and that song has already started clocking right now numbers in lakhs on a daily basis. If you’re not going to — if the customer does not get into one platform, he will kill that platform, go to the second platform. So we don’t see too much stress happening out here if couple of platform shutdown.

Shubham Ajmera — SOIC Ventures LLP — Analyst

Okay. Got it. Thank you sir.

Vikram Mehra — Managing Director

Is there any other question? Hello?

Operator

[Operator Closing Remarks]