What T-Series' dominance on YouTube means for its reach and revenue

India's largest music company has been the most watched channel globally on YouTube for two years running, creating a dominant and profitable ecosystem

The estimated Rs 7.2 billion Super Cassettes Industries’ T-Series got more than 43 billion views from across the world in 2018. These came from people who watch songs such as Dilbar or trailers of its films like Fanney Khan on its YouTube channel. 

T-series has 54.5 million subscribers, second only to PewDiePie’s 64.5 million. Now add its 27 other online properties — Shabad Gurbani, T Series in Telugu, Tamil or others — and India’s largest music company brought in 61.5 billion views this year and over 93 million subscribers.

For quick reference — Hotstar reached 202 million people with the Indian Premier League earlier this year.
 

What does it mean?  It means that India’s largest music company dominates on the most popular video platform globally. It means a virtuous ecosystem that ensures reach, a nice fat, undisclosed minimum guarantee and juicy margins for T Series. And it means the biggest leg-up possible for a burgeoning film business.
 

Walking the talk: A still from Raid which had a top line of Rs 1.5 billion across revenue streams

“More than 50 million people get our songs and trailers. Earlier whenever a song launched it used to get a couple of million views now it gets at least 10 million. There is buzz from film to music,” explains Bhushan Kumar, chairman and managing director, Super Cassettes Industries (T-Series).  There is also a danger. “T-Series is in such a cosy relationship with YouTube that if Facebook or someone else becomes bigger, they will have problems,” points out one insider.  Kumar reckons that YouTube brings in one-fourth of the firm’s revenues, but the advantages it offers outweigh any issues with over-dependence. “There is no fear of dependence, these are all formats. Earlier it was cassettes now it is platforms like YouTube or Amazon or others,” he says.” And in this world of platforms, T-Series is at the centre of a unique ecosystem that gives it a competitive advantage very few entertainment firms have. 
 

Bhushan Kumar, Chairman and Managing director, Super Cassettes Industries (T-Series)

Super Cassettes Industries has been scaling up its film business rapidly — it will make or co-produce 10 or 12 films this year. Now add the fact that over 70 per cent of all the music sold in India is film music — films dominate the economics of the music business completely, is a revenue stream for it and a major publicity weapon. The Rs 13 billion music industry is, for all practical purposes, a subset of the Rs 156 billion film one. That is why T-Series dominance of the world’s largest online platform, the $110.9 billion Alphabet’s (parent of Google) YouTube is critical. YouTube is the home of film trailers, songs and all the trivia that drives the film and music ecosystem in India. 
 

Subrat Kar, co-founder and CEO Vidooly, a video intelligence firm explains; “Video as a category gets the highest watch time on the YouTube universe. And the current algorithm gives priority to watch time in the ranking. The only reason most of their [T Series] videos are recommended on YouTube is that they have a 54.5 million subscriber base. You can get 10-20 million views through cross promotion on the T Series channels itself.” In the internet universe those are good numbers — remember that every thousand views get anything between Rs 100-150 in advertising. So even a middling singer who signs his rights away to T-Series has hopes of being heard at least. Ditto for any film that T Series makes.  But eventually, as Kumar says, the quality of the film or the song takes over. What the dominance provides is a springboard that increases reach, sampling and, therefore, exposure. If the song is bad or the film a disaster, it will sink. T-Series has had good, profitable films like Raid, (2018) which had a top line of Rs 1.5 billion across revenue streams, and the super hit Hindi Medium (2017). But its had many duds too —  Simran (2017) and Sarbjit (2016) to name a few. 
 

The closest rival to T-Series is, arguably, the Rs 3.5 billion Saregama. It is having a great year on the back of the hit Carvaan, its streaming revenues and is investing in films, just like T-Series. However Saregama’s film portfolio is non-mainstream, it doesn’t seek a commercial release with every film and none of its films are over Rs 33-50 million. T-Series budgets are eight to 10 times that. Saregama’s strategy is to generate enough cash to get back in the game of buying music rights. T-Series is focussed on building a film studio which also feeds its music business. Saregama is run by outside professionals and is listed. T-Series is owned, controlled and run by Kumar and his family. 
 

So will there be a bid to launch an OTT platform, a la Eros Now or to go public or raise money? “We have no plans to launch our own OTT or app, we are only into content. That is the valuation game. We don’t need to raise money, we don’t owe a rupee to any bank,” says Kumar. 
 

For now then it is only about leveraging the dominance on YouTube to push reach and revenues for its music and film business.