Saregama, one of India’s oldest music labels, is making a big move into the world of videos. They’ve acquired a 51.82% stake in Pocket Aces, a digital entertainment startup, for approximately $20 million.
On top of that, they’re planning to invest an additional $1.8 million into Pocket Aces. The exact price for increasing their stake in the future will depend on certain performance metrics.
This deal had been in the news recently, with reports surfacing on TechCrunch about the two companies discussing this agreement.
Pocket Aces is known for creating short-form video content targeted at young Indian audiences. They churn out more than 30 new videos every day, with a focus on humor and addressing real-life issues, which has earned them a growing fan base.
The startup also has a track record of licensing its intellectual properties, like the popular show “Little Things,” to platforms such as Netflix. They’ve also shared content with platforms like Jio, MX Player, Vistara, and Qatar Airways.
According to information on their website, Pocket Aces reaches 50 million viewers weekly and amasses nearly 700 million monthly views.
For Saregama, this move is part of their strategy to expand their video catalog. They’re already producing more than 300 video songs every quarter and have diversified into various new areas over the past decade, including the Carvaan jukebox business. In recent times, they’ve also ventured into low-budget South Indian films and TV series for on-demand video streaming platforms.
Saregama sees this acquisition of Pocket Aces as a way to tap into a new audience segment aged 18 to 35. They believe it will not only enhance their intellectual property portfolio but also provide access to a distribution network boasting over 95 million followers. This, in turn, will help popularize their music library even further. Additionally, the collaboration aims to create synergies across artist and influencer management, as well as long-format video content creation.