Saregama plans Rs 1,200 crore content spend for FY28-FY30

Saregama India plans to spend around Rs 1,200 crore on new content over FY28-FY30, Managing Director Vikram Mehra said during the company’s Q2 FY27 earnings call. The estimate assumes an annual increase of around 10% in content budgets, based on FY27 spending of Rs 325 crore, the midpoint of the company’s Rs 300-350 crore guidance.

Mehra said content acquired two to four years ago is beginning to contribute positive margins. In FY24, when Saregama began investing heavily in new content, the company had said it would take two to three years for EBITDA and profit growth to follow revenue growth. “We are entering that cycle now,” he said.

Saregama maintained its guidance of 20-23% revenue CAGR for the music vertical over three to five years, along with EBITDA margins of 60-65%. Mehra said the guidance does not apply to individual financial years. He also reiterated that the company’s performance should be evaluated on a rolling 12-month basis.

Content investments and releases

Saregama’s music vertical recorded revenue of Rs 251.3 crore in Q2, up 35% year-on-year. Mehra said the growth was partly supported by a low base in the first half of FY26.

The first half of FY27 saw a greater focus on non-film music, including iPopstar albums in Hindi and Tamil, Haryanvi and Bihari songs, and an album by Punjabi artist Nijjar. Mehra said multiple songs from the I-Popstar albums trended on YouTube and Instagram.

The Telugu album Paradise was the company’s biggest film-music hit of the quarter. Its song “Yeshanagula” reached the global No. 1 position on YouTube’s daily music-video charts during the quarter.

The second half of FY27 is expected to focus more on movie albums, including Love & War, Seyon, Dharma Productions’ Naagzilla and a Tiger Shroff film produced by Sanjay Leela Bhansali.

Saregama said 60% of its music revenue in FY26 came from music released after 2000. Its catalogue comprises more than 180,000 songs and is growing by around 4,500-5,000 new releases annually. The company continues to guide for a five-year payback period on new music acquisitions, followed by 55-75 years of returns.

Subscription growth

Mehra said paid music subscriptions are growing much faster than ad-supported users. A song streamed by a paid customer generates a higher yield than the same song streamed by a free customer, he said.

A consumer study by EY and IMI cited by Mehra found that 64% of free music customers were willing to shift to a reasonably priced paid service if free access stopped. He said Saregama remains bullish on subscription growth in India.

Growth in India is currently driven by new subscribers, Mehra said, while pricing is a potential second growth engine that could begin contributing in two to three years. He also referred to platform and label initiatives, including changes to advertising on free tiers and the possibility of releasing some new content first behind a paywall.

Artist management and brand partnerships

Saregama represented 340 artists at the end of Q2, with a combined following of more than 450 million on Instagram and YouTube. The artist-management business builds artists’ popularity through Saregama’s IP releases and monetises them through bookings for live events, weddings and brand endorsements, from which the company earns a share.

The company completed more than 20 brand deals in Q2 with partners including Apple, Airbnb, Google, Cadbury and Tanishq. Mehra said the brand-partnership vertical generates revenue across music, live events and short-format videos.

Live events

Saregama is shifting greater focus towards company-owned live-event intellectual property, while continuing to organise artist-based concerts, Mehra said. Its owned formats include UN40, a music festival; Hahakaar, a stand-up comedy festival; Krishna – Radha Se Ranbhumi Tak, a devotional concert format; and Carvaan Live.

Mehra said the initial runs of IP-based concerts involve higher investments, most of which are charged off rather than capitalised. He said the company would continue increasing its investment in live events.

During Q2, Saregama produced 54 Carvaan Live shows, with an audience of around 10,000. The company also organised an Ilaiyaraaja US tour across 11 cities, with an audience of 20,000, and 17 devotional shows.

AI initiatives

Mehra said Saregama expects AI to benefit the company over the long term through cost reduction and faster time to market. He said the company supports licensed innovation but will oppose unlicensed exploitation of its catalogue.

Mehra said data and consumer research indicated that AI-created music was gaining traction primarily through volume rather than consumer listening. For catalogue owners, he said, the more immediate concern was unlicensed AI covers and remakes of existing songs.

Saregama has invested in technology to track AI-generated covers and remakes of its songs on streaming platforms, and either buys them out or seeks their removal. It is also engaging with AI creators to explore licensed versions of its catalogue.

The company has created two AI-focused teams. One is using generative AI tools to create adjacent audio content, including podcasts using Saregama songs, and new-age music videos based on older songs. Saregama plans to release around 100 hours of podcast content in Q3. The second team is examining company processes for potential efficiencies.

Mehra said the initiatives had resulted in marginal manpower-cost savings, with the full impact expected over the next few quarters.

Video business and investments

Saregama’s video revenue declined 16% year-on-year to Rs 18.3 crore in Q2. Mehra said the decline followed the company’s decision to wind down its film business and invest in Bhansali Productions. Revenue from the vertical may decline further in the coming quarters as the transition continues.

The company will continue investing in Gen Z-focused short-format content, as well as television and web shows. Mehra said most of these formats involve low-ticket investments and are taken up after an advertiser or platform has come on board.

Pocket Aces reached break-even in FY26 and is moving towards profitability in FY27, Mehra said. Bhansali Productions is preparing for its Q4 release Love & War and is working on its FY28 slate.