Hi – I had recently started reading on the company. I had some doubts – thus would request that those tracking the company for sometime if they can share their learnings or perspectives around those:
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Now that the company will start actively investing in new music – would that not adversely and severly hamper the cash flow profile due to the streched timeline associated with monetization of new music content or in other words the streched working capital cycle associated
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Last few years the views were driven by Gaana/Saavan incentivizing new user acquisition. As some of these platforms face pressure or go behind paywalls that would eventually lead to a drop in views. While I agree that views will not just go away but might move to Youtube (where I think payout on a free view is lower). Is that a headwind ahaed as some of the VC funded user acquisition for music platforms comes to an end
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There is incresed realization amongst producers that music companies (likes of Saregama and Tips) are making more money of music than 4-5 years ago – that should lead to them demanding higher payouts
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Last few years were unbeliveably great as the company monetized on the goldmine it was sitting on. However the next few years seem much tougher for the reasons listed above
To that extent is it a good time. PE looks reasonable but given the “discretion” involved around amortization of content costs…hard to know the true E of the business especially given cash flows are suboptimal.
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