The Hindu Business Line : Saregama plans tie-ups for music download

AS part of its strategy to tap alternative revenue streams, Saregama India Ltd (SIL) is planning tie-ups with US network portals for offering digital downloads to NRIs in the US.

The SIL's Managing Director, Mr Dilip R. Mehta, said here today that talks were being held with various companies including I-tunes, Realnetworks and Loudeye for the proposed tie-ups.

"The enabling process for a digital download which needs high speed bandwidth, is expected to be ready by June and there could be more than one tie up," he told reporters after the company's annual general meeting.

Earlier, Mr Sanjiv Goenka, Vice-Chairman, announced to shareholders that "offering digital downloads was a focus area for the company and a dialogue was on for tie-ups".

He said that SIL's losses would continue for the current year too, but performance was expected to improve by 2004-05. Profit is certain, he assured shareholders who rued that they had not got any returns on their investment for the last two years.

Explaining SIL's performance in recent times, he said, "Technology has changed faster than anticipated and digital downloads and file sharing became commonplace."

Mr Goenka said that although SIL spent Rs 35 crore to acquire the music rights of new hindi films (NHF) and another Rs 16 crore to promote the songs, none of the releases did very well. "The basket of films was good comprising movies by J.P. Dutta, Rakesh Roshan, Suraj Barjatya and Yash Chopra and while some of movies made money, the music did not," he said.

In order to de-risk its recorded music business in the NHF segment, Saregama was operating on profit-sharing and royalty basis, he said.

To a query from a shareholder on the appointment of a new MD, Mr Goenka quipped :"I wish the change was not required but better performance calls for better resources."

Mr Abhik Mitra, former MD of Saregama, was appointed for a five-year period beginning December 12, 2000. He put in his papers in September 3, 2003 paving the way for Mr Mehta to take over for a five-year term.

On the piracy issue, Mr Goenka said that unless the law enforcement machinery became more stringent, tackling this issue would be difficult. Cross-border piracy has affected Indian music industry too, he added.

Elaborating on some of the points made by Mr Goenka, Mr Mehta said that along with the focus on digital downloads, SIL was emphasising strongly on the home video segment.

In addition to its existing tie up with Warner Home Video Products and BBC, Saregama has sealed pacts with Miramax and Universal Studios. Mr Goenka added that talks were being held with Indian home video companies now.

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