In an interaction with Kumar Taurani, Managing Director of TIPS Industries Ltd

We are focused on maximising stakeholder value creation, which includes our listeners, artists, partners, employees, and shareholders, voices Kumar Taurani, Managing Director of TIPS Industries Ltd.

The company achieved a historic milestone by posting its highest-ever quarterly revenue, totalling Rs 60 crore, and an outstanding 90 per cent growth in net profit. What were the key drivers behind this success?

One of the primary factors behind the company's remarkable success is the strength of its music repertoire. The company has curated and maintained an extensive collection of music from the late 1980s up till now. This vast and diverse music catalogue has proven to be a cornucopia as it resonates with a wide audience. The appeal of these songs has led to increased streaming and consumption, contributing significantly to the surge in revenue.

What strategies did the company employ to successfully lower its content costs, which have experienced a significant decline over the past two quarters?

This quarter's decline in content costs was primarily due to a lower number of releases, which is sometimes beyond our control. As a strategic approach, we always emphasize on evaluation of our financial performance on a full-year basis rather than on a quarterly basis as releases have their own dynamics and may be sparse or concentrated in a particular quarter. As a policy, we will continue to invest consistently in content every year, in the range of about 30 per cent of our revenues. We take our content investments very seriously and put in a lot of effort to maintain financial discipline and a consistent approach to content cost management.

How does the company's two-pronged content acquisition strategy help in achieving long-term goals?

Our two-pronged content acquisition strategy, which includes both producing music in-house and purchasing music rights, is instrumental in achieving long-term goals by leveraging the strengths of each approach. Our commitment to producing and introducing promising singers demonstrates our long-term commitment to the music industry. The strong A&R team plays a crucial role in identifying and engaging with artists across various genres and languages which helps in discovering diverse talent but also ensures that we stay relevant and responsive to evolving musical trends.

Talking about our purchase strategy; we are very disciplined in our approach to acquiring music rights. Since we understand the creative process thoroughly, we are able to select and focus on quality that we would like to add to our repertoire while maintaining financial discipline. Acquisition of music rights also helps to widen our own audience base as we are able to add different genres as well as artists to our existing repertoire.

What are the top three strategic priorities currently being focused by the company?

Our first priority is to keep adding good quality music to our repertoire. We will continue to focus on widening our audience base by adding new music and artists to our repertoire. The second major focus of the company is to widen our distribution reach. In that regard, we are working on various avenues to enhance the availability of our music online as well as offline. Lastly, but most importantly, we are focused on maximising stakeholder value creation and by this we mean all our stakeholders, which includes our listeners, artists, partners, employees, and our shareholders.

What is your outlook on the media and entertainment industry in India, and how will the increased digital advertising spending benefit the company?

The M&E industry has historically been driven by advertising spend. However, that is changing rapidly and subscription revenues are growing quickly for Television, OTT as well as music streaming apps. Subscription numbers are increasing every month. This is a very positive development for the entire music industry. In India, in the foreseeable future, we expect advertising and subscription models to co-exist and therefore both streams will help to drive growth. Digital advertising spending is growing at a CAGR of 29 per cent and that will continue to provide tailwinds for the music industry’s growth.

Disclaimer: The article is for informational purposes only and not investment advice.