OnMobile Global has inked exclusive deals with around 40 companies from the South Indian Music companies Assocation (SIMCA). Medianama reports the deal value is around Rs 8.5 crores. A fairly small amount considering it will be spread across 40 labels, of which Satyam Audio has majority content share, accounting to approximatly 40% of SIMCA’s catalogue.
This effectively marks OnMobile’s entry in the content aggregator space. They now compete with Hungama (Madura Entertainment, a Telugu label withdrew from SIMCA and joined them) in what will slowly elevate into a bidding war. OnMobile does seem to be in a good position to expoit value chain efficiences considering it acts as both middle-ware provider as well as content aggregator. What matters is if this translates into margins that are fat enough to win an expodentailly inflating minimum guarnatee. Hungama, which has so far retained mobile rights for consecutive years for T-Series and recently signed on Eros entertainment, may also be in an unfavourable position with existing operators like TATA, some of whom have their middleware run by OnMobile. Hungama however does lead in international distribution, with a stated base of 50+ operators in 30 countries. What would be interesting to note is how the accounts move once they come up for renewal.