India’s entertainment value chain is undergoing a quiet but consequential reset. Music companies—once largely confined to rights management and soundtrack licensing—are moving upstream, repositioning themselves as strategic partners in content financing, storytelling, distribution and long-term intellectual property monetisation.
In the process, the traditional boundary between music and visual storytelling is blurring, giving rise to a more integrated ecosystem in which sound, story, platforms and capital increasingly move in tandem.
This shift has been brought into focus by recent deal-making. Earlier this month, Universal Music Group acquired a 30% stake in Excel Entertainment, while last year Saregama India invested in Bhansali Productions. Beyond headline valuations, the transactions point to a deeper structural change: music companies are no longer content monetising at the tail end of the value chain.
The Universal–Excel deal, valued at an estimated ₹2,400 crore, marked a clear departure from the traditional soundtrack-licensing model. Along with global music distribution rights, the partnership includes a co-owned music label, effectively integrating Universal into Excel’s production pipeline.
Saregama’s strategic investment in Bhansali Productions follows a similar logic, securing future music rights while offering exposure to large-scale, culturally resonant franchises with extended monetisation potential. Industry executives say these moves underscore how music companies are repositioning themselves as long-term partners shaping what gets made, how it is financed, and how value is extracted over time.
Also read: Universal Music India takes significant minority stake in Excel Entertainment
Saregama to invest in Bhansali Productions with content partnership
From licensing to leverage
India’s music segment today contributes an estimated ₹12,000 crore annually to the broader media and entertainment industry, accounting for roughly 6% of the overall market. Recorded music revenues stood at about ₹3,840 crore in the last financial year, with digital contributing close to 87%, reflecting the decisive shift towards streaming, platform licensing and social video.
This digital-first reality has altered the economics of music rights. Labels now control catalogues running into hundreds of thousands of tracks and command massive reach across YouTube, Spotify, Apple Music and short-video platforms. As competition for premium content intensifies, early access to IP has become strategically critical—both to avoid aggressive bidding wars and to secure long-duration revenue streams.
Filmmaker Yubraaj Bhattacharya believes label investments are as much about risk management as growth. “Music labels investing in film production companies look like they can invest to save themselves competitive bidding at a later stage,” he says. “I’m told music labels are struggling as the streaming market is pretty flat and they are not making enough money. So, this new strategy—like Saregama investing in Bhansali—is a way of securing a pipeline at a lesser cost.”
For production houses, the appeal is equally clear. “This gives them access to capital at a cheaper rate than the usual streams. There is a synergy. Makes sense. But let’s see if any investment becomes a game-changing business case study. I guess we are living in the age of deals,” Bhattacharya adds.
Music: Centre of storytelling
What is accelerating this convergence, executives note, is a fundamental shift in audience behaviour. Music is no longer consumed purely as an audio product; it has become deeply visual and platform-led.
“At the outset, it is essential to ground any discussion in audience behavior,” says Pep Figueiredo, COO of PTPL India and former SonyLIV executive. “In the current consumption environment, music is no longer experienced purely as an audio product; it is predominantly a visual medium. YouTube has become the primary engine driving this shift, fundamentally altering global music consumption patterns.”
This shift has disrupted legacy broadcasters and compelled labels, producers and platforms to recalibrate their strategies. Music today often functions as a film’s first and most powerful interface with audiences. Songs routinely clock 100–500 million views before release, effectively acting as a marketing layer that can account for a meaningful share of promotional impact, particularly for pan-India and diaspora-focused projects.
The influence of music is also increasingly visible upstream, shaping casting decisions, genre selection and release strategies. Production houses are prioritising projects with soundtrack scalability across languages and formats, recognising that a successful album can sometimes outlive—and outperform—the film itself in lifetime revenue.
Rise of the full-stack entertainment model
Music companies, meanwhile, are rapidly evolving into full-stack entertainment businesses. With recorded music revenues growing at over 15% annually and streaming accounting for more than 80% of income, labels are expanding into live events, brand partnerships, publishing, short-form video and direct artist IP ownership to improve margins and extend lifecycle value.
Gaurav Chanana, founder of Lucifer Circus, which operates both a production house and a music label, describes this as a fundamental reordering of creative hierarchies. “Music companies are changing how India’s entertainment industry works by moving music from the background to the centre of storytelling,” he says. “From my experience running both a production house and a music label, the biggest shift is that music is now being designed as IP, not a side dish… or just an add on.”
Partnerships with music companies today go well beyond selling songs. “They shape how projects are financed, how they travel across platforms, and how stories are conceived from the start,” Chanana adds. “Strong music IP helps production houses attract early capital, build audience connection faster, and reach pan-India and global diaspora audiences by acting as an emotional and cultural bridge.”
Changing economics
Strategic capital from music companies is also reshaping film financing models. Music investments can account for 20–30% of a film’s production cost and, in some cases, translate into 30–50% revenue participation. For producers, this reduces reliance on debt and lowers equity dilution.
“In India, production houses balance creative independence with investor expectations by ring-fencing high-risk creative bets with data-backed music and OTT pre-sales,” Figueiredo notes. Increasingly, slate-based financing allows 60–70% of capital to be de-risked upfront, with returns aligned to diversified revenue pools across music, digital, satellite and international rights rather than box-office performance alone.
At the same time, convergence is throwing up new challenges. Complex rights structures, evolving royalty frameworks and the rapid advance of generative AI are intensifying debates around ownership and protection. Major music companies have already sought legal intervention against the unauthorised use of sound recordings in AI training models, underscoring the tension between innovation and IP control.
India remains one of the world’s fastest-growing music markets, supported by smartphone penetration and expanding streaming access. While film music continues to dominate consumption, non-film and artist-led content is gaining momentum, reflecting broader diversification in listening habits.
What is emerging is a reconfigured entertainment economy where music is no longer ancillary, but central—to financing, discovery, monetisation and global reach. Deals like Universal–Excel and Saregama–Bhansali are not isolated bets; they are signals of a sector recalibrating its role in the value chain.
As labels embed themselves deeper into production and platform strategy, they are reshaping how risk is priced, how audiences are built, and how IP is monetised over a decade-long horizon rather than a single opening weekend. In this new order, music companies are no longer background players. They are increasingly becoming architects of India’s modern entertainment ecosystem.