Divo, the digital media and music company based out of South India, was founded by Shahir Muneer in 2014, to distribute and monetize artist’s music across mediums. Divo has since then partnered with more than 50 digital platforms like YouTube, Facebook, Amazon Prime Video, and more than 1000 content creators.
We caught up with Divo’s Founder, and Director, Shahir Muneer, Founder, who told us about the inception of Divo, how it operates in the South Indian music market, how the growth in music streaming has helped the music IP, and much more. Read on.
Take us through the journey of DIVO from its inception. Its mission and vision, values, etc.?
I had a corporate career in 2 leading tech companies (HCL Tech and TCS) for close to 8 years in the media domain in various positions across marketing, pre-sales, operations, project management, following which I took a break and conceived the idea of getting into the online video space.
This was 2012 and there was not anything much happening on this front and YouTube was the only destination. And seeing the market gaps, I knocked on doors, made cold calls and messages, and was able to network with Google.
They too were just starting their operations in India for YouTube and were more Hindi market focused, and that was the opportunity that gave me to reach out to regional majors like Sun Network and various other TV channels and studios in the South to offer this service. I was the first one in the corridors of these large conglomerates talking about this as a revenue stream, as a 29-year-old with no media background or godfather.
While the initial years were more of a consulting role, by 2014 January, along with Vishu Ramaswamy who joined me in 2013 we incorporated Divo as a company, we set up a business model to help media companies to monetize their content on YouTube using our tools and experience.
Vishu having experience from the South Indian media industry was key in giving insights on the pain areas of the media industry, that is when we set our mission, vision, and values to be centered around to be the go-to digital partner for content creators and also enable transparency across our business cycle – be it agreements, operations, reporting, payments, etc, which is even to date one of the key reasons for our clientele to have been the main source of referral to new clients and for us to have been able to retain over 90% of our clients.
DIVO is now a major multi-platform online video network but how was DIVO received when it was launched in 2014?
Back then not just YouTube, but digital on its whole was not an area looked at for distribution or monetization by any of the media companies in South India. So, it was an eye-opener for a lot of companies to meet someone who is offering them a new revenue stream, with additional services like copyright protection, social media, and digital marketing.
And I must point out, that even the first set of consulting work took time for the message to reach the decision-makers. And later had it not been for our director, Vishu Ramaswamy, who has had experience in the media industry knew which doors to knock on, it would have been a long drawn process to reach out to these media companies purely on cold calls and unscheduled meetings.
Having the first-mover advantage in the Tamil and Kannada markets helped us to get a strong foothold in the market. Also since we were new then, and the market was also nascent, without much idea of our performance, they were ready to experiment, without being gung ho in expecting a major windfall. But of course, when money started coming in, the word started spreading. I can easily say for the Tamil media especially the movie studios, we were the only subject matter experts on online video at the time.
Back in 2014 how did you carve out a market share for DIVO, what were your strategies?
So, while during the consultancy phase in 2012-13, we did not have a proper business model in place, but once we did in late 2013, there was no looking back. We offered a unique service, new revenue stream, digital advice/strategy that wasn’t available easily otherwise, the first mover in the market, and most importantly our commitment to transparency not just in words but on paper and action.
Since then how has the music business changed and how has DIVO as a brand evolved?
So as seen we were not even anything remotely close or involved in the music business at the inception of Divo. However, by 2014 we got to see a lot of production houses who were our clients were losing out the rights to exploit their movie’s trailers, promotional content as it was getting acquired by the music labels, as they were also looking at this as their new revenue stream with the fall of a caller ring back tones as a business.
However, we were able to innovate and come with a new business model for the producers, where essentially we converted the production house to a music label themselves, by retaining the copyrights and distributing the music in addition to the online video content through Divo.
This truly was a disruptive model we did, and heads turned when we distributed Actor Dhanush’s production Velai Illa Pattadhaari. This had the music combo of Dhanush and Anirudh, the Kolaveri combo, and was a highly sought-after album, and even to this day is a marquee combo.
We practically learned the business on the job, and the learning has not stopped. Music is a very complex business with various rights vested under it and various sources of revenues and income worldwide. Our focus has always been on distribution and we have been strengthening that year or year.
We have a direct distribution network today without needing any middlemen, and we have been able to avoid revenue leakages and find new revenue sources, which I can proudly say even a lot of established distribution majors and regional label majors do not have. Within the music business, while we got sorted on the sound recording side of the business, the publishing side of the business was complex.
I spent a lot of time meeting and talking to experts in this domain across the world to learn the best practices, models, etc. It’s still the most underrated and underexploited side within the music business and its complex nature doesn’t help, unlike the sound recording/label business.
We have established our presence with most major societies around the world to try to collect at source, however, we were able to see that independents cannot maximize their revenue and avoid leakages if solely depending on societies. This is where our recent partnership with Sony/ATV comes in place, which helps us utilize their worldwide tools, which otherwise we would have been handicapped.
Which are the labels that DIVO is currently in partnership with and how does that impact the companies revenue model, and any other partnerships in the pipeline?
While we have multiple production houses/studios who have their labels like Dhanush’s Wunderbar Films, Gautham Menon’s Ondraga Entertainment, 2.0 producer Lyca Productions, Puneeth Rajkumar’s PRK audio, Yuvan Shankar Raja, Raghu Dixit, Manorama, and many more.
These partnerships are key for us, as they are also our investors for our growth, and we go all out for them as well, not limiting our service to just distribution and monetization but also value adds like digital marketing, copyright management, anti-piracy services, and even brand opportunities where we have delivered multi-crore value deals for many projects.
We are planning to come up with new services and offerings early next year within the music business for artists and labels, which will be a first for an Indian company.
DIVO is one of the major players in the South Music Market, how did the company achieve this feat?
Multiple factors play a role in our growth. Firstly, the growth of the digital industry apart, with factors like cheap data availability and smartphones, even in the remotest of cities of India. Our clients, who went out of their way to refer us which led to incremental business. Which happens even to this day.
What we never expected was that it would cross borders, and from catering to Tamil clients, we could onboard Kannada clients and then to Malayalam and so on. We grew from one language to another, in the Southern industry itself.
We were never having a sales or business development team separately focused on this. It has always been either of the directors who took this up and continue to tell the story the way we want to tell our content clients. We strongly believe that if you create the content and own the IP, you do not need a third party to own the IP and take away earnings which are only increasing year on year.
What is DIVO’s plan for expansion in other parts of the country?
We are working with few Hindi content producers like Jio Studios, Reliance Entertainment, who though we work on limited areas, are still our clients. This has truly been an achievement for a Chennai based company to get to work with them when they could have offered the same to any company in Mumbai or Delhi.
We had till 2019 looked at ourselves as a South focused and specialized company, but with these recent additions and few more Hindi movie / serial rights holders joining us, we are not restricting our experience to be limited to the South anymore. Also, as mentioned, we have a new service within the music industry that we are launching which would be a Pan India offering for labels and artists.
How has the advent of digital music streaming affected the Music IP industry?
Being a new entrant to the music industry compared to all the majors and regional majors who are at least a few decades old, the impact of the loss of the physical market for them was huge, and equally was the mobile vas/caller ring back tone business. Since we came in after that, streaming has only been a boon for us, and its growth has only been encouraging year on year.
It’s the way to go, however, I feel the tier 3 and 4 markets have adopted online video and short video apps more than the music streaming apps. Which was not the case for physical and caller ring back tones. I do see the music streaming apps trying to innovate new offerings like Gaana and Jio Saavn offering short videos as well and let’s see how the market evolves.
Did the pandemic affect your business, if so how has DIVO navigated through it?
Ad revenue has dropped by over 50%, Music streaming dropped by 30%, no new releases. What stopped us from hitting the panic button was our company having a finger across all aspects of online video and music. So while ad rev dropped, subscription revenue of movies went to an all-time high, and we have had record numbers in terms of the subscription revenues from OTTs for our movies and our movie rights holder partners
Similarly influencer marketing and branded content is a very strong area we are in, and we have executed over 50 projects in the last 6 months alone, and few of them are leading national brands in their segment.
So while the business grew here exponentially, we used the downtime in ad rev and music, to focus on innovation, and hence the upcoming new music product that we are developing and building our tech stack expertise. Also, I am glad we did not even need to look at our books and look at any employee downsized we have hired more during this period than ever that too from leading national media and digital media companies.
What is DIVO’s marketing strategy for the next quarter?
While we have a presence known in the online video and music businesses, our influencer and branded content marketing is on one of the strongest rosters in South India. I would say 90% of brands spending their money, may not be aware but would have associated with us via multiple parties. We look forward to strengthening this side of our business in the next quarter.
And finally what’s your favorite music genre?
I listen to International pop music mostly; I know it sounds boring and not eclectic. But I do listen to regional music and western classical as well.