Saregama was earlier known as His Master’s Voice or HMV. This company is known for owning the rights of some of the most popular movie songs. For a long time, one could see the HMV Long Playing records being sold in music stores.
A few years back, HMV rebranded itself as Saregama to reinvent itself in a world teeming with T-Series, Tips, Shemaroo, Eros and other music companies. It also launched its Music World stores to differentiate its products.
To take the company forward, Saregama has once again done something unthinkable- launch a box-shaped product called Carvaan that stores hundreds of songs in various languages.
Has this innovation helped Saregama drive its business?
The company posted a net profit of 92% in 2018-19 largely because of the incredible performance of Carvaan. According to various media sources, the Carvaan business recorded a jump of 132% in 2018-19. Nearly 900,000 units were sold in this fiscal as compared to 389,000 units in 2017-18. In Q4 alone of 2018-19, the company sold 214,000 units of Carvaan.
The RPG Group was anticipating that Saregama sales would touch the 1-million mark in 2018-19. This obviously did not happen.
In Q2, Saregama saw an increase in its profits by more than 230% mostly driven by the sales of Carvaan. In that quarter, sales of this product grew by 40%. Total unit sales of Carvaan in Q2 were 219,000. This quarter also saw the launch of Carvaan Mini 2.0 and Carvaan Gold.
Creating marketing history
In 2016-2017, shares of Saregama were selling at Rs. 215 ( December 2017), and there was absolutely no hope for this company’s revival. Saregama’s efforts in film production and other activities had failed miserably. Its Music World business had failed largely due to online piracy and the onset of digital media consumption.
It was in this set of circumstances when the chairman of the company, Sanjiv Goenka thought of tapping into its vast library of songs. The idea was to tap into the ‘digitally dark’ consumers who knew very little about the downloading of songs. These consumers were brought up on a diet of the old melodies of Hemant Kumar, Talat Aziz, Lata Mangeshkar, Mohammad Rafi, Mukesh and Mahendra Kapoor, etc. Modern Fm radio stations do not play these retro songs because their target audience comprises people in the 20-40 age bracket.
And this is where Saregama struck. It aimed at people in the 40s who liked listening to radio disliked the mindless chatter of the radio jockeys. All they cared was pure unadulterated music belonging to the 8-0s and beyond.
So this is how Carvaan was born. The product’s positioning is quite simple; Carvaan’s music is to be enjoyed while relaxing in one’s drawing-room, amid friends.
Ever since its launch, the stock price of Saregama has more than doubled. On 15th July, the stock was trading at Rs. 529.80. The 52-week high and low figures are Rs. 718/ and 563/-, respectively.
Saregama has tied up with Harman Audio for better sound clarity. There are two versions of the product; the bigger edition is priced upward of Rs. 5,000 and is packed with more than 5,000 songs. There is a smaller edition as well and one can buy it from Rs. 2,000 upwards.
Carvaan is retailed from physical as well as online stores.
Competing with Fm?
There is no way Carvaan is competing with private Fm. A significant listenership of the latter takes place during drive time while Carvaan is all about lounge music. But if we look at the ‘Share of the Ear’ opportunities in places like homes, salons, barbers, etc, then Carvaan enjoys a distinct advantage.
But listenership is also about the age factor. According to several dipstick studies, people over 40 like to hear retro songs and music without any interference. And this is where Carvaan scores big over the private Fm stations.
With a significant chunk of audience targeted on the wheels of nostalgia and musical love, Carvaan is intended to bring the classic old times back. However, to keep up with the fast pace of technology, Saregama may need to rethink its product innovations.