Tips Music expects YouTube Shorts monetisation deal to progress in Q3 FY27

MUMBAI: Tips Music is looking to turn short-form video views into a longer revenue story. The music company expects negotiations with YouTube over a monetisation deal for YouTube Shorts to make progress in the third quarter of FY27, as it looks to strengthen digital earnings amid rising music consumption across platforms.

Speaking during the company’s Q2 FY27 earnings call, chairman and managing director Kumar Taurani said discussions with YouTube were continuing and that Tips Music expected most of the negotiations to be completed during the quarter. The agreement, however, has not yet been signed, and the company did not disclose how much revenue the proposed arrangement could generate.

The talks could open another avenue for Tips Music to monetise its catalogue on a platform where music is frequently used in short-form videos. YouTube Shorts allows users to create and share brief videos, often incorporating music tracks. A commercial arrangement could help the company capture more value from the use of its repertoire, although the financial impact will depend on the terms eventually agreed.

For now, the negotiations remain a work in progress rather than a confirmed revenue stream. Tips Music has not announced a final agreement or provided an estimate of the deal’s potential contribution, leaving the timing and scale of any additional earnings uncertain.

The discussions come as the company reports an increase in streaming consumption. During the September quarter, streaming volumes rose by around 30 to 35 per cent year on year, according to the earnings call. Management attributed the increase to higher consumption across both digital and non-digital platforms, rather than to a one-off revenue item.

The growth in listening activity provides a wider backdrop to the YouTube Shorts negotiations. As music consumption expands across streaming services and social video platforms, rights holders are seeking to ensure that their catalogues generate revenue across the different ways audiences discover, share and listen to songs.

Digital platforms already account for a substantial share of Tips Music’s business. Digital revenue contributed around 73 per cent of the company’s total revenue in the first half of FY27, with management expecting the proportion to remain in the 70 to 75 per cent range.

That concentration makes digital monetisation central to the company’s growth strategy. A deal with YouTube Shorts could potentially add to the ways Tips Music earns from its catalogue, but the company’s broader digital performance will continue to depend on consumption trends and its existing platform relationships.

Warner Music remains another important part of the revenue mix. Tips Music said its partnership with Warner Music contributed around 25 to 30 per cent of revenue, with the contribution increasing year on year in the first half of FY27. The existing arrangement is due for renewal in FY28.

Warner Music also handles global platform deals for Tips Music, including arrangements involving Instagram Reels. The relationship therefore forms part of the company’s approach to monetising music across international digital platforms, while the proposed YouTube Shorts arrangement remains under negotiation.

Alongside its platform strategy, Tips Music is continuing to invest in acquiring music rights and expanding its catalogue. The company has retained its content investment guidance of Rs 90 crore to Rs 100 crore for FY27. It spent Rs 71 crore during the first half of the financial year, meaning a substantial portion of the planned investment had already been deployed by the end of the period.

The investment strategy is tied to the company’s focus on building a catalogue that can generate returns over time. Management said it aims to recover content acquisition investments over four to five years, reflecting the longer period that may be required for music rights to deliver revenue across different platforms and uses.

Tips Music is not looking to diversify into artist management, according to the management commentary. Instead, the company intends to remain focused on acquiring music rights and developing its catalogue, keeping its business centred on music ownership and monetisation.

The company’s first-half performance has also outpaced its earlier growth guidance. Management said revenue grew 28 per cent in H1 FY27, exceeding its previous annual growth guidance of 20 per cent. Despite that performance, Tips Music did not provide a revised full-year growth forecast and maintained a conservative outlook.

The figures point to a business balancing higher consumption and revenue growth with continued investment in content. While the expected YouTube Shorts negotiations offer a potential additional opportunity, the company has not yet quantified the financial benefit or confirmed when a final agreement will be signed.

For Tips Music, the next phase will involve converting audience engagement into sustainable returns while continuing to build its rights portfolio. The proposed YouTube Shorts deal could become another piece of that strategy, but until negotiations are concluded, the immediate focus remains on growing existing digital revenue and making its catalogue work harder across platforms.