UTV Motion Pictures has decided to retain its music IP and enter into short term physical distribution deals with music labels. Anita Iyer questions Lavina Tauro, UTV Interactive Senior VP, Voice Products & Music, on the benefits of retaining IP and the label’s monetisation plans
Why did UTV Motion pictures decide to retain its music IP?
UTV has been in the business of movie production and distribution worldwide since almost a decade now. And we churn out a slate of movies year on year. Retaining our music rights in-house makes logical sense as we believe that in the long run, when you have restricted IP, your product thinking is also restricted. UTV Interactive produces lots of content in the digital space and music is a major part of it. When you don’t have your IP in-house, your content is handicapped. The other part is in terms of licensing.
Today, the medium to exploit music is beyond physical and for entering into license deals for syndication, on-ground licensing, radio and television; you don’t need to be a music label. As a production house, we would anyway enter into these licensing deals. In terms of television content, UTV has almost 30per cent of the total inventory of new releases. So it becomes very interesting to hold back rights and then grow the catalogue. We weighed the pros and cons and figured out the entire process of licensing deals to different mediums before deciding to retain our IP.
What sort of deals did you enter into with labels till last year?
We used to sell our rights in perpetuity to music labels. As such, they owned the songs and we didn’t have any rights to exploit. So, we consciously decided against doing that. We realised that over the years, media like television, broadcast and digital have become major revenue drivers for music and it makes sense to monetise them optimally.
And on the physical front, you would still be entering into short term deals with music labels?
For physical, you have to give a slightly longer period because it takes time to recover, so we might look at five year deals. Physical helps in terms of visibility in the market. Secondly, physical distribution requires an infrastructure already established by the labels.
Would these be minimum guarantee deals?
In some cases, it would be minimum guarantee deals and revenue shares in others.
For on-ground licensing, would you be tying up with Phonographic Performance Limited (PPL)?
We have entered into a deal with a non-PPL agency Novex Communications and they license our content for events. They are our official licensee; the tariff for institution is decided by them but for events we work together on the tariffs.
On the digital front, would you be entering into exclusive deals with any content aggregators?
We want to optimise content and are open to work with all digital aggregators. We might sign an exclusive deal if the monetisation for three years makes sense for us. Our only concern is that IP should not be restricted and we are happy to pay back the royalty on that content within that period if needed. Players need to understand that as IP owners, we will have aspirations in the digital space and if they can’t support, we might not give our content.
Don’t you think labels might hesitate to enter into short term physical distribution deals as digital is the real incentive?
The market forces will decide how the model evolves. I am sure we will find a model that works for the labels and us as we continue to work with them. One cannot discount the learnings they have.
Our focus is that UTV should own the IP and we should not be restricted to use it.
If there is a workable solution, we would be happy to work with them. We are not being rigid and I am sure music labels will also think in the same direction if more production houses start retaining their rights.
(Abridged interview courtesy: Sound Box. For the complete story, read the February 2012 issue of Sound Box)