Saregama strikes the right chord with Pocket Aces; musicals, bigger titles in the making

"There is a lot of music-kicker in new content of both short and long form. While music uplifts a content, it is an expensive proposition. But the fact that we are with Saregama now, they bring a lot of music and we have used a lot of old popular songs in our content. We are developing a musical, a docuseries on some popular music artiste. In terms of short- form content, we have done a bunch of musical reels on Instagram for brands," Shrivastava told Moneycontrol at FICCI Frames held in Mumbai between March 5 and 7.

In FY23, Saregama earned Rs 441 crore in licensing revenue from over 1.5 lakh songs and music licensing contributed 61 percent to total revenue of Rs 736.6 crore in the last financial year. The company also produced songs like What Jhumka from the film Rocky Aur Rani Kii Prem Kahaani, and Restart from 12th Fail in the nine months of FY24.

After songs, Pocket Aces is setting sights on feature films and has started working with Saregama's film production company Yoodlee.

Big picture

"With Saregama coming into the picture, the impact will be on the size of the projects because we can work with bigger show runners, bigger directors. We can invest months in creating a complex story versus lesser time in creating simpler stories. Our ability to invest in complex projects is going to increase and you will see us expanding into regional markets. We are going to launch more channels for short-form content. And there is a large focus on profitability which was there before Saregama came in as well. It is much more now because we are with a publicly listed company," the co-founder said.

She expects the volume of short-form content across various video channels, including FilterCopy, Nutshell and Gobble, to increase by 30 percent after the acquisition by Saregama.

The music label in an exchange filing last year also had said that Saregama intends to buy another 41 percent stake in about 15 months at pre-agreed multiples, which will take its overall ownership to 92.6 percent in Pocket Aces. The remaining around eight percent will remain with the management of the digital entertainment company.

In large formats or content that is mostly sold to streaming platforms, Pocket Aces has four new shows going into production this month in genres including dramedy (combination of drama and comedy), sports, crime drama, a corporate drama, among others.

The company has also entered the non-fiction content space.

Shrivastava pointed out that in the current scenario there is a challenge of less demand of content coming from streaming platforms who are cutting down investments in content as they focus on profitability.

"We have both brand funded shows on OTT (over the top platforms) where  there are larger shows that are SVOD (subscription video on-demand) and smaller shows which are AVOD (advertising video on-demand). While it (OTT cutting down content cost) is affecting everyone, we have branded content which contributes significantly," she said.

Branded content

Various forms of branded content along with advertising share revenue coming from social media platforms like YouTube, Facebook contributes bring in majority of Pocket Aces' revenue and the remaining comes from streaming content.

"OTT has been larger also in the past. But short form is the best for profitability. Monthly revenue run rate comes from branded content and that is your bread and butter and your scale. Large form content brings in the large swings (in revenue), it helps in brand building and brings industry respect," the co-founder said.

While there is pressure in the ad market as well with direct to consumer (D2C) brands and online gaming companies cutting down ad spends, Shrivastava said that traditional categories have increased their exposure and spends.

"In 2021, edtech spend was huge. But now, we have FMCG that has come back on top. Beauty brands are spending a lot. Earlier, we had to fight with TV and that happens less now. There was a time when most of our branded content was coming from scaled startups also because of the founder connect that we have. Now, we get huge business from traditional players like auto. The next frontier is how much a public sector bank will spend," she said.

What changes

The co-founder also added that what has changed post the acquisition is that the earlier Board of Pocket aces which constituted of of financial investors now has a strategic investor who works in the same space.

Pocket Aces was founded by Shrivastava, Anirudh Pandita and Ashwin Suresh. While Shrivastava continues to helm the company, Suresh and Pandita have been heading Loco, the company's gaming arm which was launched in 2020.

"What changes is that we get much harder questions but also much more help. It opens bigger doors for us because they (Saregama) have been around for a long time, they have relationships at the highest level, they have access to talent like veteran filmmakers. For me, it is a great learning," Shrivastava said.