Suddenly, there seems to be more to the Hindi entertainment television scenario than Star, Sony and Zee. There is a buzz around B4U Television Network, which relaunched B4U Entertainment as B4U Movies on 2 October. B4U Movies and sister channel B4U Music look and feel like the best thing in their particular genres.
Great clarity, a slick feel and a growing cachet with audiences auger well for both B4U Music and B4U Movies.
ndiantelevision.com‘s Thomas Abraham met a relaxed CEO Ravi Gupta recently over lunch after a well attended press conference announcing the launch of B4U Movies. Excerpts from the conversation:
Your network seems to have offloaded all the negative baggage that the January arrest of diamond merchant and stakeholder Bharat Shah brought on you. Can you tell me something about the financials of the network?
In the current year B4U will show operating profits of $ 2 million. This is for the network as a whole. It should be remembered that B4U Music achieved operational profits in the first year itself (B4U launched its Music Channel in May 2000 and B4U Entertainment in September 2000). So the figures are very encouraging.
We are looking at total revenues of $ 20 million this fiscal, with operating costs at $ 18 million. We expect to achieve a net profit of $ 4 million after amortisation by March 2003.
So have you put the Bharat Shah episode behind you?
I would be lying if I said that Bharat Shah‘s arrest did not hit us but today it is not really an issue. That is not to say we don‘t wish him well. There is still a strategic alliance in place. There are a number of issues that are still to be resolved on that front but they cannot be dealt with when he is still in custody.
What is the investment that has gone into the network till date?
Over the last two years Rs 3000 million has been pumped into the channel. Mainly through the lead promoters steel magnate L N Mittal, Kishore Lulla and Gokul Binani, all based in the UK. (Lulla is also the promoter of Eros International LTD, the largest overseas film distributor and the first to take Hindi movies to the UK and the US.)
How are you raising money? Are you looking at an IPO?
We are certainly looking for ways to raise money. And the route we are taking is through capital or debt or creative financing. We are looking at an IPO sometime around September 2002.
A lot of companies have talked of IPOs but they have never seen the light of day. So what makes you feel you will fare any better?
See, when you go to the public you should be able to offer them something which gives them a reasonable return on investment. It is also important what is the price that you are offering your share at. When we go in for an IPO it will be after having audited our accounts for 2002. In addition we will have completed two quarters of 2002 which will give the investor a clear picture as to where exactly we stand as far as our financials are concerned.
How much do you expect to raise?
At least a 100 crores (Rs 1000 million). That is the very least that we are looking at.
What about film production? Are you looking in that direction?
We are looking at production, financing and distribution of movies. We see a natural backward integration in terms of production as well as distribution.
Do you have any projects in the pipeline where you are the producer?
We will not take on the actual production work. I look at the Canal Plus model. Where we ensure fund flow to creative productions.
What is the strength of your movie library?
We hold rights to 1,000 films in India and overseas rights of 1,600 films.
What of new titles? After all that is what brings in the viewers.
Seventy movies under production are signed with B4U at the moment. And considering that the total Hindi film output in India in a year is 180 that gives an idea of how much we have things covered.
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By 2003, we hope to achieve a scenario where 50 per cent of revenues will be out of India.
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Coming back to B4U entertainment. What was the investment that you put into the serials that were on the channels?
We spent roughly 24 crores (Rs 240 million) on the serials.
So you‘ve had to write them off?
Not really. For instance we have managed to sell some to (national broadcaster Doordarshan‘s) DD Metro. And we hope to sell the other serials as well. But yes, we may have to write some of them off.
B4U has quite a presence abroad. How extensive is your reach?
We are present in over 100 countries worldwide where there are strong Indian populations. We launched in Canada last month and expect to launch in Australia next quarter.
How much of your revenues come from abroad?
At present 70 per cent of our revenues come from our overseas operations. By 2003 we hope to achieve a scenario where 50 per cent of revenues will be out of India.
It was announced that B4U movies would be encrypted by January 2002. Is that still your target?
That is too early. We expect B4U Movies to go pay in the second quarter of 2002.
There are so many movie channels now available. What makes you so confident that B4U movies will be able to stand out?
In the US too there are many movie channels. But it‘s HBO that stands out. When it comes to prime Hindi movie entertainment, it is B4U Movies that the viewer will switch to.
