Despite YouTube Shorts being low on monetisation, Tips Music wants to adopt a revenue-sharing model rather than the current flat licence rates.
“In case of shorts, we are saying over a medium to long term, that model would move from a fixed fee to a revenue share. It won’t happen on an immediate basis, but on a medium to long term, it would happen,” revealed Sushant Dalmia, Chief Financial Officer (CFO) at Tips Music Limited, during the Q3 FY’26 earnings conference call.
From Flat Rate to Dynamic Revenue Share:
When asked about low monetisation but high volume on YouTube Shorts, Kumar Taurani, Chairman and Managing Director suggested an alternative business model to the current flat-rate system.
“They should give us a profit-sharing basis. They should start monetizing that service, maybe by way of subscription or by way of doing more advertisement, or maybe the way of that blue tick they are offering. So, we must take some money from there. But I think whatever is happening is happening in the entire world, but that should, we are doing better than many other companies,” he said.
Addressing the potential shift in the revenue model, Hari Nair, Chief Executive Officer (CEO) of Tips, said the decision ultimately lies with YouTube.
“So, this depends on the platform and us both. The platform needs to decide when they will share the profits with us. And there revenues from the advertisement should also grow equally. Till then, the platforms may opt in for a fixed-fee model. And we may continue with that,” he added.
Referring to the potential unauthorised commercial misuse of songs, such as the instance when Sony Music had Myntra pull down a reel featuring Sony’s music, Taurani said, “We do not allow any commercial person to promote their products; we knock them down.” He was also emphasising the revenue music labels generate from user-generated content (UGC) featuring their songs.
How Music Labels Benefit from UGC?
Indian music labels such as T-Series, Zee Music Company, Saregama, and Sony Music India benefit substantially from user-generated content (UGC) on YouTube and Instagram through virality, promotion, and monetisation.
YouTube’s Content ID technology underpins how Indian labels monetise UGC. YouTube scans uploaded content and identifies matches, automatically claiming videos on behalf of the asset owner and applying the asset owner’s specified match policy to monetise, track, or block the content.
While Instagram doesn’t have a Content ID-like system, it operates a music library catalogue that allows users to select particular tracks for non-commercial UGC. The feature was launched in 2019 after licensing deals were signed with T-Series, Zee Music, and Yash Raj Films. A year later, the Indian music copyright society, the Indian Performing Rights Society (IPRS), also announced a licensing deal with then-Facebook, now Meta.
Additionally, beyond flat licensing deals, a
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