Ladies and gentlemen, good day, and welcome to the Q2 FY 2025 earnings conference call of Tips Music Limited. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Viral Sanklecha from Orient Capital. Thank you, and over to you, sir.
Thank you, Dale. Good afternoon, ladies and gentlemen. I welcome you for the Q2 and H1 FY 2024 earnings conference call for Tips Music Limited. To discuss this quarter performance, we have from the management Mr. Kumar Taurani, Chairman and Managing Director, Mr. Girish Taurani, Executive Director, Mr. Hari Nair, Chief Executive Officer, and Mr. Sushant Dalmia, Chief Financial Officer. Before we proceed with the call, I would like to mention that some of the statements made in today's call may be forward-looking in nature and may involve risks and uncertainties. For more details, kindly refer to the investor presentations and other filings that can be found on the company's website. Without further ado, I would like to hand over the call to the management for their opening remarks, and then we'll open the floor for Q&A. Thank you, and over to you, sir.
Good afternoon, everyone, and welcome to the Q2 and H1 FY 2025 earnings call of Tips Music Limited. At the onset, I wish every one of you a very happy Diwali in advance. Our company continues to perform well, and the board has declared a second interim dividend of INR 2 per share for FY 2025. Our team is working hard on existing and new initiatives. These results are an outcome of their hard work. I will now hand over the call to our CEO, Mr. Hari Nair, to provide further insights.
Thank you, sir. We remain focused on delivering the 30% growth as per our guidance, and this growth is largely attributed to the increasing contribution from digital platforms like YouTube, Spotify, Saavn, Amazon Music and Apple Music. Our new division of brands and partnerships has started clocking in revenues. We recently did a synchronization deal with Motorola with our song, Rangeela Re, which was used in their advertisement showcasing their new range of colorful mobile phones. There are more deals in pipeline. Now I would like to hand over the call to Girish Taurani, who will provide us more insights on our content business. Thank you.
Girish, you there?
Girish, your line is unmuted.
Girish, saying to reconnect. I think just see if he got disconnected. Operator, Girish is disconnected.
Moment. The management line has been disconnected. Ladies and gentlemen, the management line has been reconnected. Over to you, sir.
Is it for me now?
Yeah, Girish.
Okay. Okay, I think, sorry about that. I got disconnected somehow. I believe Hari has just spoken, right?
Yes.
Okay. Thank you, Hari. So I'd just like to talk about the content business going forward. In Q2 FY 2025, we have launched 125 songs, 39 of them they were film songs and 86 of them non-film songs. Our YouTube subscriber base has now hit 108 million collectively. This quarter, we released two musical short films, Teri Meri and De Inteha, both of which have been very well received by our listeners. Our standout release for this quarter has been Yaad Reh Jati Hai from the film The Buckingham Murders, and it has been sung by B Praak. Another popular track released this quarter was Dua Kijiye, a non-film song released by us and sung by Sameer Khan. Both songs have been gaining a lot of traction and continue to grow among listeners on all streaming platforms.
Will now hand over the call to Sushant to take over through the financial highlights. Thank you, all.
Thank you, Girish, and welcome everyone to the Q2 and H1 FY 2025 earnings. Let me take you through the financial highlights of the quarter gone by. Our revenue for Q2 FY 2025 was INR 80.6 crores, compared to INR 60.9 crores in Q2 FY 2024, reflecting a year-on-year growth of 32%. Our content cost grew 194% over the base quarter to INR 13.8 crores. Our operating EBITDA margin for the quarter was 73.8%. Additionally, our PAT for Q2 reached around 48.2 cr, compared to 39.7 cr in Q2 FY 2024, representing a growth of 21%. Now, looking at the highlights of first half FY 2025.
Our revenue for first half FY 2025 was INR 154.5 crore, compared to INR 113.5 crore in the first half FY 2024, which represents a growth of 36%. Our PAT for first half of FY 2025 was INR 91.8 crore, up from INR 66.8 crore in the first half FY 2024, showing a growth of 37%. With that, I conclude my opening remarks. I'd like to wish all a very happy Diwali in advance. I'll now open the floor for discussion. Thank you.
Thank you. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touchtone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking your question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Nilesh Jethani from Bank of India Mutual Funds. Please go ahead.
Hi, team, and thanks for the opportunity, and congrats on a great set of numbers. My first question was with regarding the Warner deal and Wynk impact. So I believe we were not with the Wynk, but with Warner deal, we were able to capture that piece of Indian market. Now, with Wynk shutting down its operations, so we wanted to understand our digital growth guidance in the range of 25% plus minus 2-3%. Is that intact or are we changing that kind of a guidance now?
Yeah. What we feel, it won't drop, as our entire customer base will shift to other apps like YouTube or Spotify or JioSaavn or Amazon. So I don't think. And if you remember, when we, two, three years back, we were not there on the Gaana or Wynk and that other, JioSaavn also, but still we managed. So I don't think it will have an impact on Tips, because our 90s repertoire was doing really well, and it will reflect on other platforms. That customer base will shift to other platforms.
Got it. So are we keeping our growth guidance in the range of 25% intact?
Yes, same. 30%, what we have said, 30% overall we grow this year, and, 30% bottom line as well. Right.
Got it. Got it. That is helpful. Second question is on the new songs. So when I see the new songs added during the quarter in the range of 125, and the CapEx, what we have done on the content cost, just wanted to understand any trend or any guidance on what kind of this number could be per song, and how are the new releases and our expected market share expected going ahead?
I think our market share is around 8-9%. We will maintain that, and we will try to gradually grow also. Next 3-4 years, we want double-digit, 10-11% we want to achieve. We are focusing on that. And as far as new releases are concerned, I earlier also I told you, it's not, we can't do a per song value because we sometimes we get a song for even INR 50,000, and if I take film rights, it's costing me, say, around 12-13 crores, and it has four songs, so it's INR 3 crore per song. We can't calculate song-wise, we have to see individual project-wise, what it is worth, and accordingly, we buy or we pay the price.
Got it. And my last question from my side, any understanding in the last two, three quarters' revenue numbers, what could be the contribution via new songs, which is reflected in our YouTube revenue to something like that? And what would be the old library which is contributing to the top line? So any breakup, any understanding on the front?
We don't have any breakup like that, but maybe Sushant can put some light on this. Sushant, can you respond to this?
Nilesh, in terms of the new songs, what we have seen that, what we have added in last year in terms of the new songs, that would contribute to somewhere around, let's say, between like 10%-14%, in terms of the overall revenue. In terms of the new songs, released over the last three years.
Okay, got it. And, Salman, hopping back on the Wynk question. So now Wynk offering Apple Music, so with Warner deal, we will be present in Apple Music also. Is my understanding right?
Absolutely, yeah.
Okay, got it. That was helpful, and thank you so much for all the replies.
Thank you.
Thank you. Ladies and gentlemen, in order to ensure that the management is able to address questions from all participants, please limit yourself to two questions per participant. The next question is from the line of Ben from Kusana Capital. Please go ahead.
Hi, guys. Can you hear me okay?
Hi. Yeah. I was just wondering, so we know that YouTube accounts for around half of the business, and you've delivered a quarter on quarter sales growth of 9% this quarter. But YouTube views, we can see, were actually down quarter on quarter by about 9%, down about 5.6 million views. So please, could you just walk me through how the business is able to deliver revenue expansion on this declining YouTube volume, please? Thank you.
Hari, you can explain on this?
Yeah. So, I think overall, you know, the Shorts numbers have reduced. So YouTube has YouTube views and YouTube Shorts. The Shorts numbers have reduced a little bit. I think this goes up and down. It's... And overall, they are growing as a platform. Also to note is YouTube has done more changes to the platform starting October fifteenth, so there will be more changes and it is a cyclic thing, I feel. I feel it will keep growing.
Okay, thank you. And then a second question on cash. Sushant will know this isn't the first time I've asked about this, but the business is sitting on a big cash pile, well above the INR 200 crore war chest that you guys have previously discussed, and clearly the business throws off cash each quarter. So simply put, what's the plan with the cash balance that you've got at the moment? Thank you.
Sushant?
So then, let's say, we'll continue to hold the cash balance in terms of, let's say, in finding inorganic opportunity in future, and let's say, the dividend payouts also will continue for us.
Understood. Thank you.
Thank you.
Thank you. Next question is from the line of Rohan Nagpal from Helios Capital. Please go ahead.
Hi, thanks for the opportunity. I had also, on the Warner deal, could you just walk us through exactly how you're accounting for the liabilities that come in in terms of the minimum guarantee? So how do you decide how much of it goes into current and non-current? Because my understanding is that every year you're getting a payment from Warner for the year. So what is the bit that's going into the non-current liabilities?
Yeah, Sushant, please respond.
So, let's say the Warner deal, primarily at the start of the year, we got a non-refundable advance. We classify between non-current and current. The current primarily has, let's say, we see at the cut-off, let's say, within twelve months, we expect that revenue to come, so it's, it is classified under current as a advance from customer, and non-current is more than twelve months. So let's say if you club both the numbers, you will get that movement. So compare as on thirty-first March and, let's say, as on thirtieth September, you will get the movement in terms of the revenue booking. The actual revenue, which has been booked, primarily based on the statements which they share with us on a monthly basis.
Okay, so the non-current is basically a function of your estimation of how much of the advance will be used up in the year?
Yes. Both current and non-current are a function of estimate, okay, how we see over the next twelve months and beyond that.
Okay. All right. And then, this quarter, there is a 110-111 crore increase in your other financial assets. So what is, what exactly is going on over there?
That is primarily, let's say, bank FD only. That is just a classification, which has been done into that, other financial assets. These are purely bank FD.
Okay, those are. But... Okay, fair enough. Those are my entries. All right. And going back to one of the questions that was asked about the YouTube Shorts, would it be possible to provide some sort of underlying trend in terms of how much is, how is the viewership moved ex of YouTube Shorts to get a sense of YouTube engagement?
No, so the engagement has grown. It's not that the engagement has dropped or something. It is just that, sometimes we see a blip, it increases, then it comes down. But overall, the YouTube numbers are very, very healthy. The platform is growing. I think, we have more than 100 million users in India, so I think it's a very good story. And the premium base is also increasing. So paid users on YouTube, especially the YouTube Family plans and all, it's all increasing. So overall, it's a good sign for us.
Okay.
YouTube also prices increased their subscription prices also, no, Hari?
Yes, yes, they have increased substantially.
Oh, all right. Okay, understood.
We have on Shorts, we have a lump sum deal with YouTube. And lump sum means it's a MG kind of a deal. Minimum we are secure, and if there is a new over overflow or anything, if they go on a paid model or something, so we'll get some more money as well.
So it's similar in structure to the Warner deal?
Yes, absolutely.
Okay. And, I mean, just to strip away all of the volatility in the YouTube number that comes in, would it be possible to get a sense of how the viewership has moved ex of Shorts?
...That exact details we won't have. The platform will have that.
Okay. All right.
Yeah.
Thanks. Thank you. Bye.
Thank you. The next question is from the line of Kavish Parekh from B&K Securities. Please go ahead.
Hi, sir, thanks for the opportunity. So I have a couple of questions. So, firstly, we have mentioned plans of spending broadly 30% of our top line on content acquisition for the full year. If I were to look at H1, that number stands at around 70-odd%. So do we still maintain the outlook for FY 2025 and FY 2026 going ahead? And, secondly, the contribution from non-film music has been fairly high over H1. So, how is this expected to trend going forward?
See, music, whether it is non-film or film, music is good, it will do well. But overall, our major focus is on films. You will see, you will see next year onwards, many films will come. We are, we are signing many films. We already signed three, four, and we, we are targeting at least in Hindi also, we release at least five to six films a year. So next year onwards, we will be, very, at a very good space in, in acquiring and releasing the content. So that's happening. And what was your other question? Can you please repeat that?
We have mentioned plans of spending about 30% of our top line on content acquisition. That number stands at about 17% over FY 2024. So do we expect,
Yeah.
An increase in content spend over two years? And, do we still stick by that 30% guidance for FY 2026?
I think, I think this year, we won't achieve that target. Maybe it will be around 22% or 23%. Next year, I feel we will cross around 20%-30%. We will achieve that.
All right. Thanks for that. And secondly, sir, I wanted some more, some clarity on the two large deals that we have, one with Warner. I just wanted to check which all platforms and geographies are covered under this deal. And second, with the Sony, Sony Music Publishing deal, could you please, share some color on the same?
See, Warner, we have all OTT platforms deal all over India. All over world, sorry. All over the world, all platforms, we've given it to them. And with the SMP Sony Music Publishing, it's an international deal, not in India. India, we do through IPRS, and it's a publishing deal we have given them, except YouTube. YouTube, only two small trading rights are with them. Rest, we are handling on our own.
All right. Understood. So other than Warner, we do not really work with any other OTT platforms directly. All of it is entirely through Warner.
Yes.
Is that the right understanding?
Yes, absolutely yes.
All right. Thanks for that, so thank you so much.
Thank you.
Thank you. Ladies and gentlemen, in order to ensure that the management is able to address questions from all participants, please limit yourself to two questions per participant. The next question is from the line of Harsh Shah from Dalal and Broacha Stock Broking. Please go ahead.
Yeah, thanks for the opportunity. A few questions from my side. So firstly, on the short format video platform, so especially I'm talking about YouTube Shorts. So do you have any kind of, you know, indicative timeline when, you know, the monetization can happen and contribute, you know, materially to our revenue?
Yeah, so YouTube, you know, if you see, they are probably going to start advertisements or, you know, already piloting that, but exactly, we won't be able to tell, when the platform decides. Overall, I think, they are growing at a faster pace for the Shorts platform, and we hope to see more traction from them.
Meaning, do you expect that in the next three years, some sort of monetization can happen?
Yes, for sure.
If you could, you know, give some color as to, you know, how the business model could work, say, between YouTube and the music label, if you could?
So, you know, if you see, there are two current models. One is the minimum guarantee model, and second is the share of advertising. So I think they will continue to do that, and sometimes it will spill over to the advertisement-based model, where they start earning a lot from advertisements also on the Shorts video platform.
Okay. Okay. And, also, I think, someone from the management team did mention that, some changes have been made.
Yeah
... on the YouTube platform. So if you could highlight, what exactly was that?
So what they used to earlier call Shorts was less than sixty-second video, 60 seconds video. Now, what they have increased as a Shorts definition is a three-minute video. There has been pressure to users by YouTube for the same, and there are some videos also out on YouTube indicating the changes in the platform.
Okay.
They are saying Shorts are now increasing in length, nothing else.
But then that would also mean that the advertisement can go up on those videos, right?
Yes, yes, yes. The overall objective, probably, by the platform is that, but I can't comment on behalf of the platform.
Got it. Got it. And one last question from my side, sir. Do you have any sort of, you know, ballpark range as to if we compare, say, H1 of FY 2025 to H1 of FY 2024, in terms of what could have been, what could be the growth in terms of the paid subscribers on the OTT platform, if you could give?
... So first, let me in case of like a paid subscription, overall, let's say the industry, I can tell you, the industry is growing at a healthy pace. Let's say it would be in the range of around 40%-50%, the paid subscription numbers.
14%-15%?
40%-50%, yes.
40%-50%. Okay.
Yes.
Yeah, and one just last question, sorry. The catalog music, right? So you did mention that the new music contributes somewhere around 10-15 odd%. So that, does that mean that our catalog is growing in excess of 25% on a year-on-year basis?
Catalog is growing at a very healthy pace for us.
I mean, I think you would be having some sort of data, right? So is the understanding correct that it is growing more than 25%?
Yes. Yes, yes, the understanding is right.
Got it. Thanks. That is from my side.
Thank you.
Thank you.
The next question is from the line of Ravi Naredi from Naredi Investments. Please go ahead.
Yes, sir. Taurani sir, again, congratulations for nice results. I am looking one report saying total paid audio subscription base in India is 1%, while it is in global, U.S. and U.K., $41. We are receiving $1. So when we will gain $3 or $5 subscription in next, how many years? And, how much revenue in our amount total paid-up subscription in India in our company?
Ravi, please repeat. Yeah, so I think, for the India case, I think Indians love music, and right now, all the platforms, if you see, like Spotify and Saavn, they are trying to push the consumption towards the paid, so they are putting in a lot of restrictions. So this 2-3% of paid users can easily go up to 10-15% in the next 2-3 years, I think.
Okay. And how much our revenue of paid subscription in total revenue?
Sushant, do you have that number?
Okay. And sir, next, like with Dosanjh, are we hiring any artists to show up in India?
You're talking about events?
Yeah, yeah, events.
We are looking at this business. We are seeing what is happening in the market, and still not sure ki what should we do. So we will wait till another two, three months, and then we'll decide if we do some kind of this business. But,
It is, it is in your mind, right?
My, whatever happens in media business, I keep that in mind.
Okay, okay. Thank you.
My-
And last-
Everything. What is happening?
Yes, sir. Yes, sir. And we are cash generating company. Any plan in mind to acquire another music like-minded company?
See, we are open, but maybe we don't have, at present, any, any people like that, which we can acquire. Nothing, nothing is available as of now. So we are just waiting, and we have cash. If there is any opportunity, we will grab it, for sure.
Sir, last, our content cost is 17%, so it will rise in the financial year up to financial year 2027. Anything? Can you predict?
This year, it won't be that much, but next year onwards, we will achieve our target. We want to invest 20%-30% year-on-year basis, so next year onwards we'll achieve that.
Thank you very much. All the best, sir.
Thank you. Thank you. Thank you very much. Like this only.
Thank you. The next question is from the line of Jyoti Singh from Arihant Capital Markets. Please go ahead.
Yeah, thank you for the opportunity. Sir, just wanted to ask, like, we are doing a lot of music for the brand. So, if you can explain, like, what we are targeting to going more for the brand music, and also, how much margin we make in this business?
See, Jyoti, it's a very new business for us. We have recently, three, four months or six months back, we appointed a team who can look for our business brand sync and all those opportunities. So we are doing that, but it's wait for another two, three months. We will give you all the details. We have just few deals we have done, and we from next year onwards, we have a big target for that business as well. So give us few more months. Maybe next quarter, we can give you more details about the business.
Okay. Thank you, sir. And sir, my next question, just wanted to know how much we earn revenue from the existing song and comparatively new songs? What is the ratio? I just wanted to understand.
I think Sushant clarified, sometime back, around 80-85% we making money from repertoire, and 15%, around 15-20% we make from new releases.
Okay. Thank you, sir. And sir, just last question on the margin side, like, we continuously doing very good margin, above 70%. So like in this quarter also, more than 73%. So what are target going forward now? Will we will be remaining in this range or we are targeting to, you know, some range, within that range, kind of?
Yeah, we always maintain we will. Our target is to grow 30% top line, 30% PAT. We should achieve that, and we are, I think, so far so good. God is kind on us. We are achieving that, and we'll keep achieving that, and we'll always focus on. Our focus is there to achieve that kind of numbers. Okay. Thank you so much.
Thank you. The next question is from the line of Arpit Shah from Stallion Asset. Please go ahead.
Hello?
Yeah. Yes.
Am I, yeah, am I audible?
Yes, yes.
Yeah, I just wanted to understand. I think so you all alluded to a lower content cost for FY 2025. So would the absolute number be around INR 55-60 crores from INR 80 crores that you were targeting earlier?
Yeah, I think it will be in that range.
About INR 55-60 crore, would that be the range for FY 2025?
Sorry?
INR 55-60 crores, would that be the range for FY 2025?
Maybe little more, I feel. Because it's six months are still to go. Maybe we can acquire some movie or some rights, some music.
Okay. Okay, got it. And I also wanted to understand the core revenue growth for us. So there's 32% revenue growth, including 7 crores, which has come from Wynk Music, right?
Yeah.
So if you see, if you exclude that number, the core revenue growth is around 20 or 22%. So I just wanted to understand on that bit why, like, we have been guiding for 30%, so how should we look at this number going ahead?
Sushant?
Yeah, hi, so, look, firstly, when you say that it's 21%, so there were some delays in ingestion of content on few platforms and the Warner deal. So this happened, let's say in the end of Q2, and I think we are confident of achieving that 30% growth rate, yeah.
Got it. So if I just see the numbers on the balance sheet, the revenue recognition probably from the Warner deal was around INR 48 crores for the H1 . If I just include the non-current liabilities part, so would that be right? Because if you have, let's say, generated about INR 155 crores-
So that, that would be higher number. You club, let's say, both, non-current and current, advances, current liability for both the years, and let's say the advances per se have, would have two or three, customers. It's not primarily a Warner. One, Warner would be a majority one, but let's say it has two or three other customers also. So but you, let's say, if you compare both non-current and current, balance sheet numbers between March and September, you will get that overall number.
Because if I can see the other current liability, that number has gone higher. Let's say it is INR 79 crores for this six months. It was INR 64 crores in March 2024. And if I see the other non-current liabilities, it is about. There's a difference of INR 48 crores. So I just wanted to get a sense, ki what is the revenue broadly from the Warner deal, if I just include, like, if I make an adjustment for that?
What I'm saying, you need to club both, let's say for both years. If you club it in terms of, let's say, March, it will be around 135 crores, both non-current and current put together, and for September it's around 102 crores. The difference is around that 33 crores. It is not only Warner. It has a couple of other customers.
Got it. And let's say if you have to compare this, the numbers from the Warner deal, and if you do YOY compare it to like-to-like, has the revenue gone higher after moving to Warner for us?
So, won't be able to comment specifically in terms of... But let's say we are seeing a good, growth trajectory, on the platform.
Got it.
Also, I just want to add to something that we missed out earlier maybe, is that we've. The delay has also happened because our ingestion on Meta, which we were not on Facebook and Instagram, which we were not available earlier, as people may know, and now via Warner, we are available on that platform. And we continue to see a lot of growth on that platform. And Meta, as a platform, is also developing their ad system ecosystem, and that's growing, and you can see, starting to see ads on the platform and monetization happening there.
Got it. Got it. So to just, just to summarize, so the revenue growth still remains in 30% on the core revenues, including the Wynk part, and the content cost will be around, let's say, INR 60-65 crores and not INR 80 crores, for FY 2025. Would that be the right thing?
It's too early to say about that. Please wait for one more quarter, because six months are still there. We may get some big film, and we will take that.
Got it. Got it. Thank you so much. That's it.
Thank you. A reminder to all participants, please limit yourself to two questions per participant. The next question is from the line of CA Garvit Goyal from Nvest Analytics Advisory. Please go ahead.
Hi. Am I audible?
Yes, sir.
Oh, good afternoon, sir. Congrats for a good set of numbers. Just two questions. One is on the, like, our growth guidance for next two to three years. For, like, example, you said, paid subscribers are increasing, and overall, we are also looking at a market share of 10%-11%. So, where do you see our top line, two years down the line, sir?
Sushant?
So overall, let's say, growth guidance for next two to three years, we see healthy in terms of around that 25-30%. We don't see a challenge in that. And basically what you said rightly, it will be more driven by looking free subscribers getting converted into paid subscription. That will be one of the important pillars.
... And when you say 30%-30%, is it for top line or bottom line as well?
30% top, 30% bottom line. Our focus is to achieve 30% top line, 30% bottom line. And plus, let me tell you, there will be a year where we will see suddenly it will go to around 50-60% because there is a, that, short content plus that public performance, they still have to grow, and there has to be some big ups coming. I feel it will next 2-3 years, it will come.
Got it, sir. Secondly, on this Wynk deal shut down by Bharti Airtel. So can you comment on, like, how much percentage of revenue is going to be impacted due to this shutdown in near term? And just a clarification, whether we will be able to get the revenues from this Apple Music.
See, earlier, we used to have a, our, our music was not there in Gaana. We have not got impacted. We were not there on JioSaavn, we were not there on Wynk. Still, we are growing. So I think, if you are listening music today, if you are listening music on Wynk, and suddenly Wynk will, not giving you music, so you will shift to JioSaavn or, Spotify or YouTube. So I don't really see anything, will be, we will suffer any, anything to do with this. Music, ultimately, if you want to listen music, you will find your way. So it's not a big deal for... I feel personally it won't impact, at all to us, maybe to 10, 15 days. But actually, if you see, we were not there on Wynk earlier as well.
So, and in the Warner deal, we have the numbers of that, and it's an MG deal. So actually, we are secured, if you see. So we have an MG deal, we have calculated that number. So now it's Warner's. You can say hard work ki they have to achieve that number from the other app. And I think they will easily achieve that. I have no issue. In our last deal also, they have given us workflows. So and we also have a team now with us under Mr. Hari Nair, our CEO. He's from that side of business, so he knows how to increase our business. I think we don't have any much problem or to think a lot. We will achieve our numbers.
Got it, sir. And sir, in H1, we almost achieved 50% of-
Mr. Goyal.
Just one question, sir.
Please rejoin the queue for further questions. Thank you. The next question is from the line of Sagar Jethwani from PhillipCapital. Please go ahead.
Yeah, thanks for the opportunity. Has the full settlement of INR 12 crores completed with Wynk? That is my first question. Second is that the YouTube ad time has increased in general. How does that benefit us? And last question is: What would be the share of regional song content in the overall repertoire?
Look, what you are trying, YouTube is increasing, we have a percentage sharing, so we will get that percentage, more percentage. So that's why we are secure that way. See if they are charging one rupee, so we are getting 55% of that one rupee. If tomorrow they are charging one fifty, so we are getting 55% of that. So we are very secure. Regional business, I feel it will be in 10, 15, 50% around, and 80-85% will be Hindi music. Because our focus is Hindi, our main language. What was the first question you gave?
First question was that the full settlement of INR 12 crore has been completed with Wynk?
It happened. All monies are in, everything is settled.
Yeah. And actually, you know, on the second question, that when I asked you about the YouTube, it was the ad time, which I was alluding to. It was not the ad rate, basically. So ad rates, I know that they are kind of heading northwards, so I was referring to the ad time as well. So maybe you can comment on that.
Can you, Hari, can you respond to that? Yeah. What do you mean by ad time? Sorry.
Ad time basically is that: a 40-second ad when, you know, in general, if it plays now, currently, the ad time is increasing, let's say 50, 60 seconds. So in terms of that, I was asking.
Okay.
Yeah.
That, that data we will not have. That will be with YouTube on how they are increasing or decreasing or... Because there are many types of ads on YouTube. There are five-second skippable ads, there are 60 non-skippable ads, so thirty-second is also there. So we won't be able to know that data point.
Okay. Thank you. Thanks for the opportunity. Thank you.
Thank you.
Thank you. The next question is from the line of Akhil Gulecha from PK Family Office. Please go ahead. Mr. Akhil, your line has been connected. Please go ahead with your question. Line from Mr. Akhil has been disconnected. Moving on. The next question is from the line of Aashish Upganlawar from InvesQ PMS. Please go ahead.
Yeah, thank you. So from this episode of Wynk, just wanted to understand, are there any further platforms which are in stress? Because most of the non-YouTube platforms would not be making money in this business right now. So anything that you are seeing on the ground, dealings with people or, I mean, that suggests anything like that?
Actually, what I feel, my feeling is, ki it's good for us if these free supply of music is getting closed, and that, the international players and the, going forward, their focus is on to convert their customer, free customer to paid subscription. And we all, music labels worldwide, I feel, we are more keen ki people should pay, and we are also supporting them in their, this thing. So, and plus, if you see advertising also increasing, subscription also increasing, so we don't see any problem in that. If one or two players get closed or they are, backing out from the business, it's good for us. Because ultimately, as a customer, if you, if you think over it, you are a music listener and you are a music lover, so you will shift to another platform. You don't have any problem.
You want to listen music, there is availability if they are unless now also, we have four, five players. You can go and listen music, paid, free, whatever model, subscription or advertising model is there. So it's not a big, big deal, I feel.
Okay. Two more things I wanted to understand. One is the song selection process at Tips. Is it manual? Is it some data-based as to what combinations work in terms of the singer or the music director, or maybe something else, or it is a combination of both for us? That is one thing. And secondly, any highlight, any kind of views you can share on what is the progress of Warner? Since Warner has been there for about six months, so some work would have happened. So any updates on that you can give us, that would be handy.
Actually, you said song selection. Yes, we need a data, and for that, we have a proper analysis team. And also, our team has a good ear for listening music and selecting. But 100% we go through data also. But sometimes data says, ki artist has recorded 10 songs, maybe last few songs not done well, but we feel ki this, the song we are listening now or we are acquiring now is good, so we go ahead and do the deal accordingly. But again, it's a negotiation of price. Ki bhai, your last 2 songs were not done well, why you are charging so much? That negotiation happens, and we do that. We go for it, number one. Number two, yes, Warner is still... Last 6 months, we were providing them content.
They are putting all the content on all the platforms. I feel they have already completed entire exercise in September. They are really doing good. Whatever time it took uploading, but still they are good. We feel ki we will have a very positive impact on our numbers in future quarters.
Would that mean the overflow on MG, one should expect things to be better than what the MG suggests?
See, that question, we will talk about it in the last fourth year, because it's a long deal of four years, and it's just started in March. It's too early, and it's a very huge MG, so we can't, we shouldn't comment now. Just wait for another two and a half, three years, we will speak about that.
Okay. Thank you, sir.
Thank you. The next question is from the line of Rakshit Kabra from Pilky Advisors LLP. Please go ahead.
Hi. Thank you for the opportunity. Just one quick question. With the recent increase in premium charges of YouTube music, would we be seeing an impact on our revenues in the upcoming quarter? And would there be any way of estimating what kind of impact that might be?
So, yes, Rakshit. Yeah. Yeah, Hari, go on.
Yes. So to answer your question, like, sir said earlier, whatever increase YouTube does in pricing, we get a share accordingly. So if they move the pricing from one twenty to one eighty-nine or two hundred, we will get 55% of that. So, increase of revenues, yes, from the paid part of it, and second question was? Did I answer your question? Yeah, yeah.
You answered the question. I'm wondering if it can be quantified, what the... Because we know the price increase, so can we quantify what is the incremental upside we should see on a like-to-like basis?
If you see, they have increased their prices by 40%, so I think that should be the number. So-
But our revenue does not come from YouTube Premium, right? So the ad revenue won't go up, and the rest of the non-YouTube revenue won't go up.
That's it, yeah.
So it will just be the sliver that is YouTube Premium, revenue that we are getting.
Yes. YouTube Premium will go up. YouTube ad revenues remains on the CPM model, so whatever rates are running in India, if that increases, then you see an increase accordingly.
All right.
Hello?
Yes, yes.
Rakshit, please understand, if we get this, we feel YouTube will definitely increase. But in case of this, as we discussed, ki Wynk is not there, so temporarily we will get compensated. So you please, as I always mentioned, look at us at 30%, what we commit, the overall 30% pie will be there of top line and 30% of bottom line. That is our focus. And in case, in few previous quarters, if you see, on a yearly basis also, we have surpassed even 30%. Last year, our bottom line was 66%. So we will not say no to the business coming in or any increase or any extra margins coming in. We always welcome it, and we are big fighters.
You know, we have not given our content to Wynk for so many years. Because of that only, they were not valuing us properly. So we, our fight is always, every hour, it's on.
Fair enough. And my second question, and this my colleague will ask.
Yeah, so the latest song that you mentioned from The Buckingham Murders that has around 18 million views on YouTube, whereas the competitor's songs-
... continue to get 300, 400 million views on YouTube. So don't you think you will continue to lose market share if that continues to sustain, and your views do not match up to the other views that competitors are getting?
See, I think, it's depending upon new releases. We have less new releases compared to other companies, but we will gain that, not a problem. But see, as always, I told you, if we have a best new releases, I'm talking now about entire industry, then also it's only 15-20% overall. 80% is still catalog, as our old music is selling. So you won't see much impact of these things.
Okay, and just one last question: Does the deal with Warner have a price increase of 30% year on year? Because that is our guidance for growth every year, and if the deal with Warner does not have a 30% increase year- on- year, then our other revenues will have to grow much faster than that to match up to the blended 30% growth.
No, we have, we have calculated all those factors, and we have the deal.
Okay. Okay. Got it. Thank you. Yeah.
Thank you. The next question is from the line of Nehal Shah from Prudent Corporate Advisory. Please go ahead.
Hello, am I audible?
Yes.
Thank you for the opportunity, and congratulations on the set of numbers. So, this year we are estimating around 20%-23% of our top line as the content cost. So, what's the problem here? Are the songs coming out at an expensive rate, and we are not bidding for them, or is it the volumes of the song itself that is going down?
See, whatever we are acquiring, it has to justify the price and the recovery. We target to recover our music cost within five years. And wherever, and we, you know, we have a 100% write-off policy in the same quarter. So if we feel that this film or this song won't get us the money, and we can't recover our money within five years' time, we don't acquire. So we are very careful about that. We are very cautious about it, and we don't want those kind of situations where we also have to move for a longer write-off period or all that. I don't want that hassle. I'm doing this since 1988. Beginning of the company, we write off our all the content costs same quarter.
We are careful. I can say that, but next year onwards, we will have a proper whatever we're targeting. We will release that amount we'll invest in acquiring new content.
Okay. So this 20-23% guidance that you've given, it was exactly the same the last year. 23% was the content cost as the percentage of top line. So we can expect another year of having around 65-66% of margins, and that going down next year?
Still, I think it's too early to comment on that, because we have still six months to go. Maybe I can get one big film or a thing. We keep trying, see what we can get something, good content. So let's wait for another quarter.
Okay. Thank you. Thank you for the opportunity.
Thank you. The next question is from the line of Sanyam Jain from Unicorn Asset. Please go ahead.
Hi, Tarun. So my first question, my two questions, both on the content side. So everyone is running after the bottom line and top line. My question is the content side, because I feel we are in the business of making content, and if we create good content, I think revenues would flow. So my first question would be on the YouTube Shorts side. So what I have an understanding of how YouTube Shorts works is the content that we produce and how popular, how much popularity it gains. So the more the popularity, the more the recommendation. It's a spillover kind, contagion kind of situation. So what are we really doing to engage with the influencers, engage with the people who can really make the content just go out in terms of YouTube Shorts?
That's the first, if you would like to answer, then I can ask the second.
Yeah, I think,
Yeah.
Yeah, yeah, Hari, you say. No problem. Hari, yeah, go on.
Yeah. So, we engage with influencers on Shorts for all our new releases. Also, we do engage for our catalog. So there is a continuous engagement, but, you know, you can't make a song hit. It just happens. The virality happens on its own, because some common man in some small village is doing some act on the song. So, it just happens on its own. But we do push a lot of influencers. We engage with multiple agencies on that.
Yeah, go ahead. Go ahead. Sorry, please go ahead, sir.
Yeah, yeah, Girish, you want to add something?
Yeah, I think I would like to just add here, that see, music and film business, when you talk about the creative, it's a very creative business. These are, to some extent, data just helps us understand and evaluate ..., but ultimately, it's gut and instinct business, and that's where our track record has been good. I think somewhere we have to also understand, it's not about quantity, it's also about quality. So maybe somewhere, we may not be acquiring new releases, but the releases that we are doing amounts to a lot of good views and collective views that may be equal to our competitors. Also, our content business, as today, we have our sister content labels who are helping us with music rights, and we are buying that as you guys know. So we are curating music there.
A lot of music labels do not have that opportunity to have that visibility going forward. So we are in a very unique and fortunate position, that creative people also like to put a good amount of expense with us. And that will be our competitive edge for us going forward.
Okay, fair answer. Just secondly, on the regional music, so we are seeing a lot of small regional singers making single albums and all that, and they are getting good views, they are getting viral as well. So are we engaging constantly with them to produce a second music video with us, or maybe a proper album with us, or feature them in some regional movies or in Bollywood mainline movies like that? And just to add on to this, you were saying that 15% of the growth comes from new content and 85%, sorry, 15% revenue comes from new content and 85% from the older one. So I think the older one, the growth there would be hardly like mid-single digit or maybe high single digit.
But the new content that we create is mostly in, pertaining to mostly contributing to most of the growth in the revenue. So is that the right understanding, or you wanna add something there?
So I'll take this. There's two parts to the question. I'll answer the content part. See, with respect to content, if you see it's already the non-film management. One is the regional aspect, which we have many channels like Tips Punjabi, Tips Gujarati, Tips Rajasthani. We even have Tips Sindhi and all of this. So in that, we've been curating good artists and bringing them to the mainstream as well. We've worked with, I think, most artists that are there in the industry. And with respect to the numbers, I think maybe Sushant or Ankit can take that.
So, in terms of numbers, let's say what we have said earlier, let's say, our catalog also continues to grow well at a very healthy pace, in line with what we are growing. So we don't see any, let's say, any downside risk in terms of the catalog growth.
Okay, so the only risk I was seeing is, okay, we are seeing new users coming on the paid platforms, obviously. So but that this growth could only sustain, say, a few years. Once everyone is on the paid platform, this growth segment. So the only growth sector then remains, beyond 3-4 years, I feel, would be the new content that we get in. So any kind of highlight you wanna share that what kind of growth do we see in the overall revenues from the newer content versus the older content? Or they're just in line with the 25%-30%?
So it's primarily in line, and let's say our content is still the new retro. We have acquired content over the last 30 years, and we still see that more 20-25 years still the content would grow for us. The existing content would grow for us.
Great. Great, great. Better. Thank you so much. All the best.
Thank you. Ladies and gentlemen, in the interest of time, that would be the last question. I would now like to hand the conference over to Mr. Viral Sanklecha from Orient Capital for the closing comments.
I would like to thank the management for taking the time out for this conference call today, and also thanks to all the participants. If you have any queries, please feel free to contact us. We are Orient Capital investor relations advisors to Tips Music Limited. Thank you so much.
Thank you. On behalf of Tips Music Limited, that concludes this conference. Thank you for joining us. You may now disconnect your lines.