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Warner Electra
Atlantic music giant, seems to be contemplating an entry into India
with a 100 per cent subsidiary. Speaking on condition of anonymity,
sources close to the recent Warner-Tips deal said, “the reason
why Warner did not get into a full catalogue licensing arrangement
with Tips as earlier planned is because Warner wants to set up a
100 per cent subsidiary in the country sometime soon”. This
was disclosed to sources by visiting Warner officials earlier this
year.
To Warner,
this deal with Tips is only a stop gap arrangement,” says another
key player in the industry. “It’s definitely
part of Warner’s bigger game plan in India,” he adds.
Speculation
about Warner’s plans for India has been rife in the wake of
the Tips-Warner deal which has proved to be a damp squib. The deal,
which was to have involved a licensing arrangement wherein Tips
would have access to Warner’s entire catalogue, has in effect
boiled down to one where only five titles per month can be released
in India by Tips. This amounts to less than a paltry 200 titles
for a year.
Industry leaders
express surprise at the deal. “I am surprised about the licensing
deal especially since every international music company that has
a presence in the country has either set up operations or has tied
up with an Indian company,” says Suresh Thomas, managing director,
BMG Crescendo.
The three-year
licensing deal allows Tips to manufacture and market the catalogue
owned by Warner and its affiliates. While this is a 10,000 strong
catalogue, Tips will be able to access only five releases every
month. This over a three-year period adds up to less than two hundred
titles.
The issue of
manufacturing too poses a few tricky issues. Tips has its own manufacturing
plant in Silvassa which will cater to the audio cassettes. Compact
discs (CDs), however, will have to be imported and it is therefore
unlikely to be affordable to the buyer. Says Kumar Taurani, managing
director, Tips Industries, “we still have not decided on the
pricing for tapes and CDs.” According to him, it will be on
the lines of current prices for international music.
All said, the
deal is hardly indicative of a serious entry by an International
major. Moreover, Warner’s current deal with Music Today is
scheduled to expire anytime now. Key industry players therefore
expect an announcement of a full-fledged entry into India from Warner
sometime soon.
—Krishna
Gopalan
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