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Mr.Subroto Chattopadhyay, MD, SAREGAMA INDIA Ltd. in an exclusive chat with The IMI Editor Sudhir Shreedharan.
Mr.Subroto Chattopadhyay, MD, Saregama India Ltd
Good Afternoon Subroto Sir,
Good Afternoon Sudhir.
From the early days of being with EMI, to the recent reshuffling in your top level management, SAREGAMA has undergone a lot of transitions - both at the Management as well as Stakes & Acquisitions.
Can you briefly take us through your company’s journey in India?
Working with SAREGAMA, these past few years, have been exhilarating. We are over a hundred years old with a library of over 300000 tracks of music in 23 different languages across genres- something. In many ways we are the custodians of the musical heritage of modern India.
Saregama is the Soul of India.
As an entertainment company it is unique in that has always been professionally managed and has been a listed company for a long time.
Today in keeping with the mandate from the board, SAREGAMA is reinventing itself to gear up for emerging entertainment opportunities in markets of tomorrow and serve consumers through relevant platforms.
The thrust areas will be music, films, tv software, physical and digital distribution and marketing of international content particularly international studio products. We have a large library and catalogue marketing will play a key role along with new product development.
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Would you like to tell us a little bit about the recent re structuring that the company underwent as a part of the RPG group re structuring plan to infuse fresh funds for its group concerns? Does this move have to do with any changes in management or strategy for SAREGAMA?
We have put together a strategy for the entertainment business and we will indeed be present in music, cinema and television.We are one of the few entertainment companies which are SAP enabled. We have done this to better manage Intellectual Property rights. Our structures, capabilities and management depth has to be built around this. ______________________________________________________________________________________________
Was the exit of your top management like Kulmeet Makkar & his entire team a fall out of this re structuring .They have left Saregama to join BIG?
The business requires talent and capability to exploit opportunities of tomorrow.As a part of the re structuring plan, we have infused over a 100 new managers to meet these critical business requirements through fresh talent and capability in the organisation.
We have managers with great credentials and we believe that modern businesses should create organizations that have depth of talent on one hand and processes to drive businesses on the other.
The fact that we are targeted by competition shows we have a strong talent pool and on the other hand the fact that it is business has done well shows we have the depth.
I believe businesses should be so built and designed that the company has both depth and distributed leadership to both grow and meet challenges.
Finally we need to build an environment and culture which is forward looking, based on team work and is able to attract talent which will fuel growth.
We would like our company and the industry to attract high quality and capable managers so that Saregama and indeed entertainment becomes a destination business. All this requires HR strategies which we are working on as a company.
The challenge is to provide a nourishing environment to the creative talent and the management support to drive business as we move to a content creation, exploitation and distribution company.
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Related Article - http://www.screenindia.com Oct 12, 2007
The Reliance Anil Dhirubhai Ambani Group (ADAG) is also making its moves in the entertainment sector. While it is reported to be in advanced talks with film director, Nitin Desai, to either have a majority stake or buy out his movie studio, it has also hiked its stake in Saregama India, from nearly 7 per cent to 12.25 per cent for Rs 26.5 crore.Do you see a competition or threat in Reliance Entertainment? Or are we going to witness a consolidation or a merger / acquisition scenario in the Indian music space?
I have no view on the shareholding pattern, but I treat other companies in the same sphere as competitors.
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Lets talk about this new avtaar of once thought about as a non-aggressive company to the now Badshaah of the Home Entertainment Market. You have tie-ups and licensing deals with world majors like with BBC to sell their DVD’s in India.
What is the kind of market in India for the Home Video Segment?
Even today entertainment as a part of GDP is very small in India. And as the economy improves there will be a huge surge in demand from consumers to consume more home entertainment software primarily for 2 reasons.
A. Because they will have more disposable income
B. Technology is going to help them.
The market for Home entertainment software will be growing at an exponential rate. We are here to cater to this market and distribute content in an efficient manner. We have good partners like Warner Brothers, Paramount and BBC and we will continue to hunt for good global partners.
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There has been a Price drop in CD’s & DVD’s with new players like Moser Baer competing against you. How do you plan to combat this?
Firstly you need to have a superior product which is relevant to capture value.
Business must create an economic surplus and pricing should be driven by that. So if business is not profitable, over a period of time the business gets into a downward spiral and finally shuts down.
As far as competition getting into predatory pricing is concerned, we have not reacted. In fact we have increased the prices on some of our products.
There is also a theory that consumers do not necessarily react favourably to lower pricing. You would not necessarily watch movies or listen to music because it is cheap
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Recently SAREGAMA lost the Universal Pictures home entertainment deal to BIG. Sir you have had a long standing relationship with Universal Pictures. Any particular reason to not clinch this deal?
We would rather not do business if we find it is not economically viable for the company.
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Like some of your successful counterparts like SONY BMG (The Indian Idol) are you involved / planning to get actively involved in any Talent Hunt Show?
No as of now we are not involved in any such activity.
I think SONY is an outstanding company and there is much we can learn from them.
What would this involvement be like? Would be to sign on fresh talent for your new releases or would be a purely separate business / revenue model?
Our involvement & commitment to the music business has always been primarily to promote fresh Indian talent and that’s what I think we will achieve through such business interests.
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Once upon a time SAREGAMA was the most aggressive player when it came to acquiring music rights of bollywood movies. Given the fact that Bollywood Music comprises nearly 50% of the Indian Music Market down these years SAREGAMA has become relatively non-aggressive on the Bollywood front. Any particular reason for this shift in strategy? Why don’t we see a lot of SAREGAMA releases on the Bollywood scene?
Even though we have done very few films in BOLLYWOOD our quality of content acquisition has been good. Last year we had a very good films with Vishesh films and Rajshri.
In business there is merit in restraint when markets hot and to focus more on the quality than the quantity.
In the near future are we going to see any new Bollywood soundtracks coming from the SAREGAMA stable?
Of course we will always be back with quality Bollywood soundtracks.
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DIGITAL :-
Let’s talk about Digital Music Sir. You were one of the foremost Indian companies to
“Break free from selling just the physical format”. In the last couple of months, under your leadership SAREGAMA has diversified into alternate offerings like an online music store, satellite radio, music kiosks, etc. Sir, You were one of the foremost visionaries in India to launch an online music store.How has your website / music store hamaracd.com done? Do you think there is an audience in India for online music stores given the fact that there are still a lot of payment & delivery mechanism problems?
I think payment & delivery issues would eventually evolve for the better. I believe that as an industry leader we should take action on such initiatives as we go along. We will always be front runners in alternate legal music offerings to our consumers.
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A recent report says that the website is undergoing a transformation where you will now sell single tracks too at a much higher price of Rs.12 to Rs.15.
Related article - Saregama Plans Online Music Store; Who’s Going To Change The Game?By Nikhil Pahwa - Wed 24 Oct 2007 08:26 PM PST
Music company Saregama India (earlier known as HMV) plans to launch their revamped site next week, offering users downloads of music from a catalog of 3,00,000 songs, reports Radioandmusic.com. The company has tied up with many record labels, including T-Series (via Hungama?), Sony (NYSE: SNE) BMG and around 43 South Indian labels. Thankfully, they’re selling single tracks, as opposed to selling full albums, which they did at HamaraCD.com. However, tracks are being priced at Rs. 12 to Rs. 15 each, and need to be purchased using credit cards. Compare that with the existing model of tracks available for free, requiring no credit cards—proliferating despite being illegal. The report doesn’t mention whether the music on sale is DRM protected or not.Why are the soundtracks so heavily priced given that you don’t have to pass on distributor & dealer margins when you are selling online?
Let me put it this way. If you buy a bottle of Coke for Rs .10 bucks then I don’t think you have reason to complain when you have to buy a LATA MANGESHKAR soundtrack for Rs 12. Consumers need to appreciate and thus assign fair value to content.
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Related article - broadbandforum.in - 18th October 2007, 05:34 AM
SAREGAMA PLANS SATELLITE RADIO
Saregama, the entertainment flagship of RPG Enterprises, is likely to commence a Satellite Radio service through a technical partnership with an overseas player in a year.
Sunil Meghrajani, controller, publishing and new media at Saregama, said: "The technology will require satellite and portable devices. Listeners will be able to download music by pressing a hot button onto the portable device through a subscription-based payment mode."
"CDs form about 50% of the music market, but we would like to have an early touch in expanding the revenue streams through the various non-physical music delivery platforms," he added.Would you like to tell us something more about this innovative venture that you are launching? What is the kind of music one can enjoy & What would be the likely subscription charges for this Satellite Radio?
The Satellite Radio is a one of its kind venture in India. A subscriber could Pre-program it and enjoy our entire catalogue.
At the moment some work on the Satellite Radio is still in progress and we’d like to see how it stands out after completion of this work. So it’s too early to even start working out on the subscription charges. It is work in progress.
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Sir, I hope u don’t mind me bombarding u with some Anti-Piracy Questions :-
Recently the discussion around piracy has taken great momentum. It’s a Global phenomenon, which must be obviously depressing for SAREGAMA MUSIC, the leader of the music industry in India. What are some of your major concerns?
PIRACY is a curse. Let me say that IMI does a great job of curbing it. It’s a great deterrent. And I think as we go ahead IMI will evolve with the anti piracy actions from the physical space to the digital space as well. And we will continue to build this organization it will help ensure that people pay for the content they consume.
Does it bother you, when some people discuss that the reason piracy is rampant is because music CDs and tapes are expensive?
No I think that pricing can’t be an excuse for thieving. Just because a piece of ART is expensive you don’t steal. I don’t think that PRICING is the only reason for PIRACY, it is an attitude. In the physical space it is a cottage industry and in the digital space sheer unethical behaviour.
In an era where people have adapted to the Internet and digital music & mp3's do U think anti-piracy raids are the best solution to curbing the pirates?
In this context I think IMI has to reinvent itself to police DIGITAL PIRACY and also build a strong public awareness campaign.
Does SAREGAMA see itself actively getting involved in the anti-piracy crusade jus like T-series is doing it? M sure u must have seen Bhushan Kumar’s wife and her anti-piracy advertisement?
We will fight piracy through IMI.
What do music companies expect from a body like IMI? How do you chart their progress in the Indian context?
We have matrices, key performance indicators and key result indicators for the IMI and we review it on a periodic basis.
What kind of support do you provide to the IMI as a body?
We actively participate in the policy making of the IMI.
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Just to end it on a lighter note
. Sir, are you a music buff?
Yes. I am.
. Which are your favorite artistes / Songs?
I love old hindi films, Hindustani classical, spiritual, Jazz. A bit of Western Classical & Folk.
. Sir Do you come from a Music Back Ground?
Not really.
. Message to our readers
It is important to pay for something that you consume.
I genuinely believe that consumers should pay for what they consume so to that extent, I would appeal to consumers to be a little more conscious about pirated products and anti-piracy and pay for what you download or listen to so that you would benefit from what you are passionate about.
So, my message to your readers is “If you are passionate about music, it is better to pay for the content you enjoy because only then will more content be created.”
. With that I’d like to end our interview. It was a pleasure speaking to you. Thank you.
Thank you Sudhir.
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© The Indian Music Industry - 2007. Content Conceptualised, Collected, Crafted & Cared by DREAM-FACTORY