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Partnership With TikTok Will Help In Other Geographies: Tips Industries | CNBC TV18

News & Politics


Introduction

In a recent trading session, Tips Industries captured attention by announcing a new partnership with social media giant TikTok. This collaboration aims to broaden Tips Music’s reach to global audiences. Kumar Tani, Chairman and Managing Director of Tips Industries, joined CNBC TV18 to discuss the implications of this partnership, alongside insights on the future prospects of the business.

Significance of the TikTok Partnership

Over the past few months, Tips Industries has been actively tying up with various global distribution platforms, including Spotify and others. The Tani revealed that the collaboration with TikTok, while particularly significant, is strategic as the platform is not available in India and China. He emphasized that this partnership will enable Tips Industries to tap into international markets, thus potentially increasing revenue. While Tani noted that he could not provide specific figures on expected revenue, he mentioned a modest expectation for incremental growth.

When questioned about the financial aspects of the partnership, Tani disclosed that it is an advance kind of deal, with Tips Industries receiving "small money" — specifically in the range of a few crores.

Conflicts with Existing Agreements

The partnership with TikTok raises questions regarding potential conflicts with existing agreements, particularly the licensing deal Tips signed with Warner Music. Tani clarified that there would be no conflict, as they had communicated with Warner Music about the TikTok agreement, ensuring a clear and direct approach with the latter.

Revenue Breakdown and Growth Potential

Tani shared that approximately 75% of Tips Industries' revenue now comes from digital platforms. Of this, around 60% is sourced from YouTube, while Spotify contributes about 20%, with other platforms making up the remainder. He highlighted the company’s target of achieving a 30% growth rate on both the top and bottom lines for the current year, with similar targets projected for future years.

He indicated that Tips Industries holds around 8% market share within the music industry, expressing a strong ambition to double that figure. The chairman reiterated that the company’s rigorous content strategy and policy of writing off 100% of their content costs in the same quarter would support ongoing sustainability and growth.

Content Strategy and Future Releases

Tani noted the company had initially set ambitious targets to release 300 to 350 songs within the year. Currently, they have released around 222 and are optimistic about meeting or nearing their goal as the year progresses. The anticipated content cost is projected to fall within 22-25%.

The chairman emphasized the significance of new content, aiming to ensure that 30% of the revenue comes from newly generated works, while also reiterating the success of legacy content from earlier years.

Conclusion

Mr. Kumar Tani’s insights into Tips Industries’ newly forged partnership with TikTok indicate a promising expansion into new markets, along with a strategic focus on revenue maximization and content growth. The company remains committed to leveraging its online platforms and content strategies to achieve significant market share and revenue growth in the coming years.


Keywords

  • Tips Industries
  • TikTok partnership
  • Global markets
  • Revenue growth
  • Digital platforms
  • YouTube
  • Spotify
  • Licensing agreement
  • Content strategy
  • Market share

FAQ

What is the significance of Tips Industries' partnership with TikTok?
The partnership aims to broaden Tips Music’s reach to global audiences, enhancing revenue potential from markets where TikTok is available.

What percentage of Tips Industries' revenue comes from digital platforms?
Approximately 75% of the revenue is derived from digital platforms, with YouTube contributing 60% and Spotify 20%.

How does Tips Industries plan to grow its market share?
The company aims to increase its market share from 8% to double digits by focusing on quality content and effective partnerships.

What are Tips Industries' growth targets for the future?
Tips Industries is targeting a 30% growth rate for both the top line and bottom line, which they have consistently achieved in previous years.

How many songs does Tips Industries aim to release annually?
The company has set a target to release between 300 to 350 songs in the year, with the current count at around 222.

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