‘Contract with Meta was cancelled as they were not doing the valuation of Tips correctly’

Kumar Taurani, Chief Managing Director of Tips Industries, can talk about music, OTT and films with the same ease and depth. 

The firebrand entrepreneur, who has also produced some popular Bollywood movies such as ‘Race’, ‘Ajab Prem Ki Ghazab Kahani’ & ‘Ramaiya Vastavaiya’, is credited with successfully moulding Tips into a leading Indian born music label amongst Saregama and Super Cassettes Industries Limited.

Being a veteran in the industry, he has served as the Chairman of Indian Music Industry (IMI) and was on the board of two royalty bodies – PPL (Phonographic Performance Limited) and IPRS (Indian Performing Rights Limited).

Amid changing landscape in India's music industry following the entry of music streaming platforms, Tips is standing tall and strong. The company recently reported an impressive record in revenue growth. During Q1 FY24, the company achieved a remarkable revenue of ₹52.6 Cr, which represented a substantial 54% year-on-year growth. Highest ever quarterly revenue growth for Tips. Their YouTube channel also experienced 132% year-on-year increase growth during this period, with an impressive 85.5 Mn subscribers and an incredible 48.3 Bn YouTube views in Q1FY24. 

Taurani is the man of the moment. E4m spoke to him exclusively on a range of topics last week. 

Excerpts: 

You reported 54% y-o-y growth. Your YouTube channel grew by 132%. How crucial this growth is for the music industry in general and Tips in particular?

The music industry has witnessed exponential growth over the years as people’s love and craze for music never went down. Deep diving into the revenue numbers, we can say that the industry is fostering a better future with a cohesive approach of all the companies. Tips began its journey in the 1990s with smooth returns on the investment meeting the requirement of the music industry. 

The company eventually saw competition in the market when radio and MP3 entered the industry and the business went down during that phase. Despite confronting ups and downs, we perpetually continued our journey. 

In today’s digital world, where everything is still two minutes away from the door, the music of choice can be played in seconds. The way the music industry has evolved in the last five to ten years is not only benefitting the listeners but also helping the music producers in expanding the markets in no time. 

Digital media is growing by leaps and bounds and 75% of business comes from digital. Digital offers two-way communication and you can listen to what you love to listen to. 

Our consistent gains in market share and the continuous improvement in our rankings signify the effectiveness of our business approach, our ability to adapt to changing market dynamics, and most importantly, the loyalty and support of our valued customers.

Besides offering and retaining a series of musicals in the movies we created long back, we worked with Atif Aslam for eight to 10 years in making exclusive songs putting different melodies of the music. Over 90% of the music recorded by Atif belongs solely to Tips. 

Our focus remains on nurturing talent, creating compelling music content, and enhancing our market presence through strategic collaborations and partnerships. 

How challenging is it to sustain in the battleground of reels and social media?  

We are established in the market where other companies are approaching us for music content. However, the companies are unaware of our real holdings and how fast we have crossed the double digits in the last couple of years. 

Our numbers went up from Rs 90 crore in 2021 to Rs 186 crore in 2023 when we were not even available partners with JioSaavn, Wynk and Ganna. Unequivocally, we exist in the market because our content is organically sold and people love it. It's worth highlighting that our influential content has continued to extend its reach, prompting platforms such as JioSaavn to re-establish its ties with our label.

Vernacular markets are growing fast. How do you plan to diversify your content portfolio to meet the demand?

As I mentioned earlier, we have been into the music business since the 1990s but have faced stumbling blocks between 2003 and 2016. Interestingly, Jio entered in 2016 and we decided to expand our business in the regional languages as well. However, with the pan-India and pan-world marketing approach, we are targeting 120 crores of Hindi speaking audience. 

You have collaborated with Sony Music Publishing. What are your objectives and revenue targets with this partnership?

We have partnered with three big companies in the music world namely, Warner Music, Sony Music Publishing (SMP) and Merlin Entertainment. We have given global publishing rights of our content to Sony Music Publishing. Our partnership with SMP is designed to facilitate the broadening of Tips' extensive catalogue's reach into the international music & movie markets. While we cannot share the numbers, it is worth noting that with our partnership with SMP, our projections have gone up for the upcoming years.

You forged partnerships with Google and Meta as well. What kind of partnerships are they? What are your revenue targets with twin partnerships? 

We maintain cordial relations with our partners and have consistently been working together on an array of projects. With respect to Meta, our two-year collaboration was extremely fruitful, generating strong content consumption across its platforms. However, in line with renewal of the partnership, it became apparent that our valuation and requirements weren't in sync. Consequently, mutually we came to the decision to conclude the partnership.

Can you share your marketing strategy and media mix? 

Let me share one old anecdote. There was a movie called ‘Phool aur Kaante’ which was released in 1991 and Tips gave one song for the movie and we earned lakhs after investing 50,000 as the promotional charges. In a nutshell, the core marketing strategy always lies within the product which is marketed and the amount of investment made on that. 

Furthermore, we continue to create and recreate our music content to bring more innovation and advancement to the song packages. This is precisely how we are fostering our content marketing. We are cherishing the way we leverage digital media in amplifying our footfalls across the music industry.  

You have seen the music industry grow and diversity over the past four decades. Have you spotted any emerging trends in the music industry?

There is a lot more that is yet to have happened in music. A lot more work has to be done in making the quality of sound better. 5G will also reshape the industry in the coming years. More importantly, the wifi can be provided free of cost across the hinterlands. 

The content consumption time on digital platforms is going up every day which helps us in growing our reach more effectively and efficiently. We are also seeing a proportionate revenue growth coming from short video content, public performances, and subscription plans. In fact, public performance is our fastest growing portfolio post-pandemic.  

I believe the subscription revenue Tips generating now, should be increased from 5% to 50% in the coming years. The subscription model holds a promising future for the entire music industry. 

(Transcribed by Tanya Dwivedi)