Tips Music Ltd. is targeting a 30% growth in its top line over the next three years, and a significant chunk of the revenue will be derived from its existing catalogue even as the share of new releases rises, according to Managing Director Kumar Taurani.
"I think so far our new releases account for 15% contribution and 85% comes from the catalogue," he told NDTV Profit in a conversation on Tuesday. "Going forward, our target is 30% top-line growth for the next two years, at least three years."
"We want (that) new releases should be more. So now the target is, we should achieve 20–25% from new releases and 70–75% should be from the catalogue," Taurani said.
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The entertainment company is also targeting a 30% growth in its bottom line in FY26. In a bid to increase its market share, it will now focus on improving the quality of song production by reducing the number of releases annually, according to the managing director.
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"That's not a hard and fast rule that we have to just stick to a number," he said, adding that the company expects to produce 125–150 songs in FY26.
Taurani also explained how a reduction in the new song releases would enhance quality.
When the company produces 500–600 songs annually, the time is limited and it has a team of around 10 people. So, every person is responsible for producing an average of 50 songs annually. But if the same person has to produce only 10 songs annually, it will lead to high quality, the top executive said.
This shift will also allow Tips Music to reject more songs, ensuring a higher standard of output without compromising on investment or marketing efforts. The company plans to sign bigger artists and engage in more extensive marketing.
Taurani also underlined the strength of Tips Music's catalogue. "Nobody understands that a music business repertoire catalogue is very, very important... 75% to 80% will be a catalogue business," he said.
This robust catalogue has led to a 30% year-on-year growth over the past four–five years, even with limited new major releases, he added.
Taurani acknowledged that per-song expenses are rising, with acquisition costs ranging from Rs 50,000 to Rs 8 crore. It can go up to Rs 25 crore to Rs 40 crore for multi-star blockbuster films.
A significant advantage for the company is its long-standing practice of writing off all content costs in the same year in which the song is released. It leads to healthy cash flows and lowers the tax burden, he explained.
In the next three–five years, Tips Music aims to solidify its position in both music and film production through its separate entities. "I feel we can really do good in the film business as well. It will take a little time, but I think our focus is to build these two businesses properly," he said.
The top executive underscored that the company remained committed to distributing substantial dividends to its shareholders. Last year, Rs 136 crore was distributed to shareholders through buybacks and dividends.
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