They are venturing into allied businesses, which range from starting talent management agencies to music labels to tap into every possible monetisable opportunity to appeal to investors.
Production houses are now looking for revenue streams beyond the manufacturing content for the silver screen to generate a steady flow of income.
They are venturing into allied businesses, which range from starting talent management agencies to music labels to tap into every possible monetisable opportunity to appeal to investors.
However, films don't take a backseat.
Sunshine Pictures, which has produced film franchises like Commando and Force and the Akshay Kumar-starrer Action Replayy and Holiday, has launched its own music label, Sunshine Music.
Another production house, Balaji Telefilms has started its own talent management firm, Hoonur and launched an astrology-related app, Balaji Astro Guide.
Dharma Productions, meanwhile, has taken full control over its talent management firm's joint venture with Cornerstone Sport and Entertainment to relaunch it as Dharma Collab Artists Agency.
This comes at a time when production houses expected satellite rights and digital rights to remain subdued in 2025, according to a report by Ernst & Young and Ficci.
"Film business is not a quarterly business. Film business is a yearly business, but music is a quarterly business and it (music label segment) becomes a very predictable revenue stream," said Vipul Shah, chairman and managing director, Sunshine Pictures.
"We have a robust investment plan for the music and we will be evaluating it every six months (for the first two years). In a few years' time, it's quite possible that at least 30 to 35 per cent of the revenue of the company may come from the music vertical," Shah said.
The revenue contribution might rise more than 35 per cent in the long term, Shah added, as once a song gets popular, its value rises significantly.
Apart from this, Sunshine Pictures is also working on its digital segment through its YouTube channel, where it will be releasing microdramas, documentaries, short films, Web shows, among others.
"We want to diversify into multiple verticals in our company to make sure that we are able to keep our company very well diversified," said Shah, adding that such diversification helps the business become more seamless and investor-friendly.
Corroborating with Shah, Shilpa Malaiya Singhai, managing director, business transformation services, Alvarez & Marsal India, said that in 2026, investor scrutiny is likely to intensify further, with a clear divide emerging between studios that operate as modern, technology-enabled media companies and those that remain project-centric.
For Balaji Telefilms, the launch of Balaji Astro Guide was prompted by keen interest of its promoter, Ekta Kapoor, along with an aim to add a non-media business vertical in the company.
However, Nitin Burman, group chief revenue officer, Balaji Telefilms, highlighted that the company's decision to diversify was not due to uncertainties in the film segment. While Burman did not specify the expected boost in revenue from the app, he added that its initial funds to launch and run Balaji Astro Guide will be provided by the company.
"Like any other startup, we also plan to raise funds in future (for Balaji Astro Guide). Films continue to be our focus, and we have a slate of over five films for 2026... We will continue to explore opportunities within and outside media domain, which will be scalable," said Burman.
Diversification of business for production houses is becoming a structural necessity, not an optional bet, said Singhai, emphasising that this is being driven less by growth and more by deepening structural stress in the content ecosystem.
This comes after rapid expansion seen in 2020-2022, where OTTs (over-the-top) commission corrected sharply, with industry estimates pointing to a 20 to 25 per cent drop in original content spends and longer deal cycles.
As a result, it has left Rs 2,000 crore (Rs 20 billion) to Rs 3,000 crore (Rs 30 billion) of unsold or stalled content on producer balance sheets.
"In 2025, the balance has clearly shifted toward margin protection rather than pure revenue expansion. Diversification into intellectual property (IP)-led, brand-funded, live, and digital formats is therefore emerging as a defensive reset designed first to stabilise economics and reduce buyer concentration. Incremental revenue growth follows, but restoring margin resilience is the primary objective in this phase," she added.
In line with the trend, Abundantia Entertainment, a content firm, launched a new division, Abundantia aiON, in November to use artificial intelligence (AI) to integrate imagination with intelligence to create films, series, characters, and worlds.
Through this, the company, which produced films like Airlift and Toilet-Ek Prem Katha, anticipates around 30 to 35 per cent of its revenue to come from work generated fully by Abundantia aiON or supported by Abundantia aiON.
This follows a shift in the country where production houses are positioning themselves as IP owners rather than pure content suppliers.
Singhai added that producer-retained IP in television has risen from around 15 per cent to over 40 per cent in the past three years, with a similar increase on OTT platforms, citing industry reports.
"The rationale is structural rather than aspirational. Owning IP allows studios to move beyond a one-time commissioning fee into multi-cycle monetisation across regional dubbing, international syndication, digital platforms, and brand-integrated formats, while controlling the full life of the asset through integrated talent and distribution models," she said.
"This thinking is also shaping capital structures, as seen in Saregama's long-term, rights-led partnership with Bhansali Productions, which prioritises sustained IP control over project-by-project transactions," she added.
"Ultimately, production is being reframed as the front end of a longer IP lifecycle, offering optionality and resilience in a more selective commissioning environment."
Photographs curated by Satish Bodas/Rediff
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