How Saregama Carvaan Launch Helped Skyrocket Its Stock

Legends say- “The measure of intelligence is the ability to change & adapt with time.” Do you know why? Because if you don’t upgrade yourself, then you will be easily replaced by the new gens. Let me give you some real-life examples-

• Gramophone is replaced by online music
• Box (Kodak) Camera was replaced by the smartphones
• Conventional television is being replaced by OTT platforms.

Saregama India could have been on this list too… Thanks to the Saregama Carvaan launch that played a crucial role in skyrocketing its stock. Little did they know that their stocks would boom 100X through it…

Now the million-dollar question is- How? Go through this write-up and you will find out!

(A) Profile: What is Saregama?

Saregama India Ltd., which used to be called The Gramophone Company of India Ltd., is the oldest music label in India. It belongs to the RP-Sanjiv Goenka Group of companies. 

Let’s look at the company’s profile-

Saregama has a vast collection of music, including film songs, non-film music, classical music like Carnatic and Hindustani, as well as devotional music. It covers songs in more than 25 Indian languages.

(B) Challenges: Saregama facing a death threat from free online music

A few years back, Saregama India found itself at a crossroads, much like Kodak did when digital photography emerged. Despite owning rights to over 120,000 songs in 14+ languages, the company was struggling to keep up with the changing times. Here’s a closer look at the three main hurdles Saregama faced-

(B.1) Disruption from Digital Platforms

As digital platforms and streaming services gained popularity, the traditional music distribution model faced a significant shake-up. By the way, when did you use CDs and Cassettes last time? Probably, you don’t remember! 

That’s what the rest of the folks did with traditional music streaming services. They ditched CDs and Cassettes for online streaming.

This act caused Saregama’s revenue to become stagnant. Hence, Saregama faced the challenge of adapting to new ways of reaching listeners and generating income.

(B.2) Battle Against Piracy

Saregama’s extensive music catalog became a target for piracy and unauthorized distribution. Illegal online platforms offered their songs without proper licensing or revenue sharing. Consequently, this posed a threat to the company’s bottom line. Combatting piracy became a crucial challenge, requiring innovative strategies to protect intellectual property and revenue streams.

(B.3) Monetizing the Music Library

Despite owning a treasure trove of songs spanning various genres and languages, Saregama struggled to monetize its vast music library effectively.

Really? Yes! After all, who would put a strain on buying a CD or cassette in the tech era where you can listen to music through the Internet and that too for little cost? 

The rise of free online music platforms posed a direct threat to revenue, as users could access music without paying for it. 

With changing consumer preferences and the dominance of rap, pop, and Western music, Saregama had to find innovative ways to stay relevant and profitable in the evolving music landscape.

So yes, Saregama India faced numerous challenges in adapting to the digital era. These obstacles were forcing the company to embrace change, protect its intellectual property, and explore new revenue streams to thrive in the ever-evolving music industry.

And trust me that wasn’t a cakewalk for Saregama!

Yet, it became successful after 2018… How? Go through the next section and you will find out! 

(C) Saregama Carvaan Launch: A Brilliant Move to Tackle Challenges

Let’s rewind a bit. Saregama, once the king of music, hit a rough patch. But they weren’t going down without a fight. They did some digging and found some eye-opening facts. Folks over 35, especially in smaller cities, missed the golden melodies of legends like Lata Mangeshkar and Kishore Kumar. 

They wanted to dive into those tunes again, but here’s the catch—they found it hard to navigate the digital world. Smartphones and computers were like alien tech to them!

(C.1) Getting Real with the Problem

Vikram Mehra, MD of Saregama, scratched his head as people complained- “Why aren’t you putting out new music?” Sure, the songs were there, but they were trapped in digital devices like smartphones and laptops. The older generation was scared to touch anything with buttons, fearing they might launch a rocket by mistake! 

(C.2) Inspiration from Reliance Broadcast Network

Meanwhile, Reliance Broadcast Network started playing old music on its radio channel called “Big FM.” And it was quite successful. That’s when Saregama realized that there was a goldmine waiting to be tapped. The goldmine was none other than the folks aged above 35 years old!

(C.3) Saregama Carvaan Launch

Thus, the genius idea was born—Carvaan! It’s like stepping back in time but with a modern twist. Imagine a radio that fits in your pocket, loaded with all your favorite songs from the good old days. No need to play with phones or computers; just turn it on, and voilà—music magic!

How Saregama Carvaan is directly related to skyrocketing Saregama stocks? We will explain it in the next section. For now, let’s look at some of the other strategies Saregama used to tackle the challenges.

(C.4) Other Strategies of Saregama

Apart from Saregama Carvaan, the company opted for the following strategies to tackle the challenges and competition from the digital world-

In a nutshell, Saregama not only brought back the golden era with Carvaan but also rocked the music scene with clever tactics and awesome gadgets. It’s proof that when tradition meets innovation, magic happens!

(D) Saregama’s net profit jumps 233% backed by booming Carvaan sales

Now, let’s dive into another impressive journey of Saregama, where their net profit skyrocketed by a whopping 233%! What’s the secret sauce, you ask? Well, it’s none other than the sensational Saregama Carvaan launch, making waves with a whopping 2.29 lakh units sold in just one quarter of 2018-19.

In FY19, it saw a jaw-dropping year-on-year net profit surge to Rs.15 crore in the second quarter. How did they do it? Simple—Carvaan stole the show with a staggering 40% boost in sales. But wait, there’s more—the company’s revenues soared by a staggering 64% to Rs.13.84 crore. 

That’s some serious growth!

The Carvaan saga doesn’t end there. In the same quarter, Saregama rolled out new variants—Carvaan Gold and Mini 2.0, adding more firepower.

Fast forward to today, and they’re doubling down on consumer research and tech to churn out even more customer-friendly products. And guess what? They’ve teamed up with Harman, a global audio powerhouse, to create some real game-changers.

(D.1) Saregama Carvaan Gold

Carvaan Gold is the latest gem in Saregama’s crown. Crafted with Harman Kardon’s sound tech and stylish metallic body, it’s a sight to behold. And those exclusive champagne gold and rose gold hues display pure elegance! Also, with a nifty companion app, you can create your playlists or pick your favorite tunes with ease.

(D.2) Business Booms in FY19

Wait, there’s more good news! Saregama’s B2B licensing business saw a solid 28% uptick according to the Q2 results. It’s raining success for Saregama, and the forecast looks brighter than ever!

(E) Saregama’s Stock Soars to New Heights

Let’s take a closer look at Saregama’s incredible journey in the stock market. Over the years, its shares have undergone a remarkable transformation, similar to a musical masterpiece. Here’s how-

(E.1) Riding the Waves of Success

Following the introduction of Carvaan, Saregama’s stock experienced an unprecedented surge. In just 20 years, its value multiplied an astounding 100 times! Even within shorter timeframes, such as five years by 2023, the returns were impressive—more than five times over. This remarkable performance mirrored the impact of innovations like Pulsar on Bajaj Auto, breathing new life into the company and its stock.

(E.2) Growth Journey

Saregama’s stock journey isn’t just about numbers—it’s a testament to consistent growth and resilience. Between fiscal year 2016-17 and FY23, the company witnessed an impressive 22% compound annual growth rate (CAGR) in revenue from operations. Additionally, its profit before tax soared by an impressive 58% during the same period. This steady climb reflects the company’s ability to navigate challenges and capitalize on opportunities in the market.

In FY23, it sold over 5.6 lakh units of Saregama Carvaan. Till now, it sold over 20 lakh!

In essence, Saregama’s soaring stock value represents its ability to innovate, adapt, and capture the hearts of investors. With Carvaan leading the way, the company continues to hit all the right notes in the stock market world.

(F) Reasons behind the success of Saregama Carvaan

Carvaan is just like an old-school radio but with a twist. Let’s uncover what made Saregama Carvaan such a hit-

(F.1) Easy to Use

No fuss, no muss. Carvaan kept things refreshingly simple. No need for internet or complex subscriptions—just switch it on, and the music starts flowing. This straightforward approach resonated with folks who prefer things easy-peasy, making Carvaan a must-have.

(F.2) Nostalgia: A Trip Down Memory Lane

Carvaan wasn’t just selling music, it was selling memories. With a treasure trove of 5,000 timeless songs pre-loaded, it became a nostalgia-packed journey for music lovers. And that retro radio-style design? It’s like as if a radio traveled from the past, reminding everyone of the good old days. Young or old, everyone wanted a piece of that vintage charm.

(F.3) The Perfect Gift Solution

Sure, Carvaan wasn’t exactly pocket change, but it was the ultimate gift solution. Priced around Rs.5,900, it was a bit steep for self-purchase, but perfect for gifting. Youngsters searching for a meaningful present for their (grand)parents found Carvaan to be a heartfelt gesture. It was a win-win—a gift for the old, sold to the young.

So, that’s the magic behind Saregama’s success story with Carvaan. It’s a blend of simplicity, nostalgia, and thoughtful marketing that struck a chord with music enthusiasts everywhere. Who knew an old-fashioned radio could still capture hearts in today’s digital age?

(G) A Quick Recap

If you reached this part of this write-up, then we truly appreciate your valuable time devoted to diving into the Saregama Carvaan success story. We have also explained numerous other success stories such as-

• Maruti Suzuki Success Story
• Dabur Success Story: How Dabut set up its Empire
• The success story of MBA Chai Wala
• The Balaji Wafers success story
• Rameshwaram Cafe’s success story
• Haldiram Success story
• The success story of Ola
• The IMAX success story
• Royal Enfield’s success story

You can go through them for detailed information!

(H) Wrapping up: Successful Saregama Carvaan Launch

In a nutshell, the Saregama Carvaan launch wasn’t just about introducing a new product—it was a journey that transformed the company’s fortunes. By tapping into nostalgia, simplicity, and thoughtful marketing, Carvaan captured the hearts of music lovers across generations.

Its vintage design and pre-loaded classics resonated with consumers (old folks), driving massive sales and boosting investor confidence. 

As a result, Saregama’s stock soared to new heights, reflecting the company’s ability to innovate and adapt in a rapidly changing market. Carvaan’s success story is a testament to the timeless appeal of music and the power of bridging past and present!