Other day we have already seen how Tollywood’s upcoming biggies like Rangasthalam 1985 and Bharat Anu Nenu are making huge money when it comes to audio rights. Both fetched more than 1.5+ crores for the tunes scored by Devi Sri Prasad.
Looking at this, any layman gets a doubt, at a time when selling cassettes, CDs and music-online isn’t a profitable thing (or negligible thing we can say) how come Audio Companies invest so much on a film’s music? Just for the sake of star hero’s image and music director’s brilliance why would a company invest such way? Here is an insight into the business model.
Actually, when an audio company buys the audio rights, they also own the rights of YouTube videos of those songs. You could notice that Lahari Music released lyrical video and final full song video of Ammadu Kummudu (Khaidi No 150) on their own channel. While videos on YouTube brings revenue, there is another main source of income through these songs.
Though people play songs for free on YouTube, they have to pay to mobile service providers for caller tunes. That is one major source of revenue that goes up to nearly a crore for hit albums of big films. At the same time, all the Radio Stations that play these songs to entertain people for free actually pay money to audio companies for using their songs. And people who conduct big music concerts, orchestras that play film songs also need to pay a royalty.
To conclude, Ringtones, FM stations and YouTube videos are the sources of returns for these huge investments. And over a period of 4-5 years, the investment comes back. That’s the business model folks.
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