This might not be the best way of understanding cost per song TIPS vs Saregama.
- TIPS outright acquires the song, once acquired there is no future liability to pay the artist. However, Saregama works on royalty model, they typically payout ~10% of their revenue as royalty.
- FY’ 23 TIPS cost of acquisition was ~7.4L, accounting for the royalty at Saregama, for just 1 year (this is a very conservative figure since Saregama’s revenue split spreads very evenly across decades), Saregama’s cost of acquisition becomes ~6.3L.
Further discounting for perpetual royalty that Saregama pays, and given that 60% of their revenue comes from songs before 2000 I’d assume Saregama likely has a higher cost per song that TIPS.
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