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Tag: cinema

  • Bollywood – on the road to more global recognition, professionalism

    Bollywood is slowly spreading its wings overseas. UTV, reports indicate, has already pre-sold the distribution rights for Farhan Akhtar‘s blockbuster Don, which released worldwide today, in Germany.Another noted film maker Karan Johar sold the distribution rights for Kabhi Alvida Naa Kehna (Kank) in Germany and Poland. Rakeysh Mehra‘s Rang De Basanti became the first Hindi film to be screened in a mainstream movie theatre in Israel.

    Stars are increasingly being welcomed. In France for instance, earlier this year at Paris‘ famous Champs Elysees Virgin megastore, French girls and boys strained to get a glimpse of Bollywood ka badshah Shah Rukh Khan who was promoting Veer Zara about a cross border romance. The star and his director Yash Chopra were caught unawares by the extent of the crowd. Increasingly, Bollywood stars like Aishwarya Rai, the Big B Amitabh Bachchan, Aamir Khan, Priyanka Chopra make their presence felt at film festivals, road shows and premieres in several countries. Often, it is not just south Asians who are interested but even the local population who become inquisitive about the buzz.

    Johar, who recently attended the Toronto film festival, points out that Bollywood is noted not just for the song and dance sequences, but also for its frank emotional value. That, according to him, is the key differentiator.

    Film and Television Producers Guild of India president Amit Khanna believes that the future is bright in terms of growing more mainstream abroad as it is the only alternative to Hollywood that can appeal to global audiences. One market that is exploding is the UK. Bollywood films are now making more money in Britain than UK-made productions and many movies are being shot in this country as also in US to make them more relevant to South Asians living there.


    Shah Rukh Khan in Kank

    69 Bollywood films have been released in the UK this year. 14 productions financed by the Indian film industry are being shot there. In the five weeks since its UK release, Kank grossed more than two million pounds – the same as Vera Drake, the critically acclaimed British film which got Bafta awards and Oscar nominations. It is no surprise that some Indian producers now regard overseas sales as more lucrative than India. This is because besides the traditional NRI markets in the US, UK, Middle East and Australia, mainstream Hindi movies are now starting to find acceptance in countries like Germany, France, Poland, Israel, Turkey, Japan, South America and even China.

    This means that films have a better chance of recovering their costs of production. The multiple-delivery system has been a boon for Bollywood. There are new technologies like VoD, which are helping boost the reach of Indian films abroad. An awards event like Iifa helps make locals in a country at least inquisitive about Indian film. Filmmakers are also realising that a film with excellent subject matter can do well abroad, even if there are not many masala songs and dances. It requires good marketing though. A case in point is Lage Raho Munnabhai, which did well in the US and UK due to the Gandhi theme that people can identify with.


    Ashok Amritraj has made his mark in the US

    Also pushing Indian films abroad is the fact that Indian filmmakers and producers are making their mark in countries like the US. A case in point is Ashok Amritraj, who with his firm Hyde Park Entertainment, has made films like Bringing Down the House and Shopgirl.

    Mira Nair‘s work has made Americans and people from other countries aware of Indian film culture

    Both were done with Steve Martin. Then there are the two famous women directors Mira Nair of Monsoon Wedding fame and Gurinder Chadha (Bend it Like Beckham). Both films received Golden Globe nominations a few years back. Of course Bollywood‘s impact abroad is nowhere compared to Hollywood which apart from India dominates in several countries. In some cases it has overtaken the cinema of that country. Still the signs for Bollywood in terms of looking for new markets is good and performing better in countries like the US.

    After all Yash Raj Films, reported last year that Bollywood films in the US earn around $100 million a year through theatre screenings, video sales and the sale of movie soundtracks. Yash Raj Films quoted the Internet Movie Database for this. There is still room for improvement though overseas when it comes to distribution and marketing. Efforts should be made to have Bollywood films released in more cinemas particularly in the US.

    The now $8 billion Indian film industry produces more than 900 movies a year in more than 20 languages. This makes India the world‘s most prolific film producer.

     

     

    The Distribution Scene: The Film and Television Producers Guild of India estimates that in India Bollywood films sold 3.9 billion tickets last year making around $1.4 billion. With luxurious multiplexes coming up with tickets priced higher, the situation will only improve. India is expected to have almost 300 multiplexes within a couple of years‘ time. This is quite a change from the single screen scenario a few years ago. This has led to Bollywood changing the way it handles releases. The big blockbusters have more prints released while a smaller film, which is only targeting a select audience, is released in certain areas.


    Gurinder Chadha celebrates the nomination of Bend It Like Beckham at the Golden Globes

    More theatres means that one needs less time to recover costs as the prints released are more. Sometimes a few weeks is enough. There is no longer a need for a Silver or Golden jubilee to make a handsome profit. Multiplexes also resort to differential pricing. So evening shows cost more than morning shows; weekends are more expensive than weekdays. This ensures that a Bollywood film can catch different audiences, whether it is the family or the college crowd.

    An interesting and well known connection between India and overseas is that we are using foreign locales for shoots. Besides Switzerland, films are being shot in countries like South Africa, Singapore, London, New Zealand. It is no surprise that the tourism boards of countries like Hong Kong actively woo Indian filmmakers with their facilities and locales.

    One positive sign is that there is more organisation and structure with institutional finance now available. Estimates are that around Rs 3 billion in financing will have been sanctioned and disbursed this year. In the past, money came from private financiers and from dubious sources like the underworld.

    Better Marketing: Bollywood is also doing more to promote its products. They are increasingly taking advantage of the new media by having contests, offering downloads on the mobile, etc. Music videos are also given to the likes of MTV. There are also tie ups with news channels for interviews, clips. The promotion for Bunty Aur Bablii, for instance, saw the two stars hosting a show on a news channel. Now one also sees the producer, distributor and exhibitor jointly planning promotions and working on it.

    Online the sites of Bollywood films are more jazzed up compared to the past. There are games, contests and blogs on offer. According to reports, while a producer would ideally invest 10-15 per cent of the total production budget on marketing and promotions, there are increasing incidents where it is getting stretched to 20-25 per cent.

    On ground events are becoming creative. In one marketing incident Mallika Sherawat sold tickets of her film Bachke Rehna Re Baba at a theatre in Delhi. Urmila Matondkar shared her supernatural experiences on Sony‘s show Aahat before the release of her film Naina. In a unique innovation the filmmakers of Oops threw stripping parties at pubs in Mumbai. Oops looked at the lives of male strippers.

    While all this is fine it is important to remember that no amount of good marketing can replace the importance of content. A good campaign cannot cover up for a poor film and a negative audience reaction.

    Co-productions: The big filmmakers are also doing a wide range of initiatives with a broader purpose. Subhash Ghai, for one, did an IPO for Mukta Arts and also set up a training school Whistlingwoods. Corporates are also entering the business, which is helping it become more professional.

    An example is Reliance taking a stake in the Adlabs multiplex chain. It helps that 100 per cent foreign investment is permitted in production, distribution, financing and distribution. Studios from the US are also looking at partnerships. Disney recently invested in UTV taking a 14.9 per cent stake for $14 million in the studio which made Rang De Basanti, India‘s entry for the Oscars. UTV is also doing co-productions with Fox Searchlight for Chris Rock‘s I Think I Love My Wife, Will Smith‘s Overbrook Entertainment and Sony. UTV and Fox will release the Mira Nair film The Namesake next year. UTV is also looking for assistance from its Hollywood partners in pushing Rang De Basanti for the Oscar awards in the US. Should it be among the five foreign films chosen it will serve as a great platform for Indian film to get noticed by millions across the globe.

    At an event it recently had for cinema exhibitors, Sony announced that it will be releasing its first co-production in India the Sanjay Leela Bhansali film Saawariya (Beloved) next Diwali. Sony Pictures Entertainment chairman and CEO Michael Lynton said, “India has a rich and a prolific film history and we at Sony Pictures recognise the potential and importance of the Indian market and welcome the opportunity to team up with the film industry in India. This is a defining moment for us as a company and for filmmakers, artists and audiences in India as well.”

    Conclusion: With Indian cinema getting more professional in its working, becoming more marketing savvy and finding more markets abroad, as well as foreign studios waking up to Bollywood‘s potential, there is every likelihood that in the coming years Bollywood might become a more globally recognised brand.

  • I&B ministry finalizing terms of law on broadcast regulator

    I&B ministry finalizing terms of law on broadcast regulator

    MUMBAI: The terms of reference of a law that will bring about a separate broadcast regulator are almost ready.
    This was revealed to Indiantelevision.com by Information & Broadcasting secretary SK Arora on the sidelines of the convention for the business of entertainment, Ficci Frames, this morning in Mumbai.

    Once the framework of the law is finalized, it would be distributed among the interministerial committee for comments and any possible fine tuning, Arora said,”From here, the document would have to be scrutinized for a final say by the Union cabinet, after which it would then be presented before Parliament.”

    While Arora declined to give a time frame under which this process would move forward, he expressed confidence that from his ministry’s end, the law would be ready “at the soonest”.

    Queried about the role of the current regulator for both the telecom and broadcast sector, Telecom Regulatory Authority of India (Trai), Arora noted that the challenges for the broadcast industry and telecom are different. First, it is important that convergence is facilitated within the broadcast sector. After that one can look at facilitating convergence between sectors i.e. broadcast and telecom. The regulatory body will work towards ensuring that the fruits of development are not vitiated by adversarial relations. “The aim of regulation is to preserve development. We will also be coming out with a regulation on content code,” he said.

    Ficci is assisting in formulating the draft of the regulation. The Group of Ministers (GoM) who concentrate on the Ice industry will fine-tune it. Then it will be sent to the cabinet. It will be passed when the cabinet approves of it. A further announcement on this regulation is expected in the coming weeks.

    Basically it is aimed at being a self regulatory mechanism. Arora however conceded that regulation always lags behind technological changes. The broadcast industry has been no exception. He also stressed the importance of content providers and creators reaching remote areas of the country. “Whether it is cable, DTH, cinema halls, no villager should be left behind. If we work on this, then the potential will be double than what has already been achieved.”

    Arora also highlighted the concern of piracy. He said that the government has been working with Ficci on the Optical Disc Law and this work will continue in the months ahead. “The reason why we approach the industry is that we want to have a regulatory framework that helps the industry move forward.”

    “Another important area that is growing is animation and gaming. We need investment from foreign players and leaders in this area. The challenge for us is to attract foreign firms in this area. At this time, there are foreign firms coming into India while Indian firms travel abroad. Foreign firms bring their brand in. However, Indian firms when they go abroad do so under an international brand. The exception is the Indian film industry and for this I want to congratulate them,” said Arora.

  • Bollywood banks on corporate route to the big league

    Bollywood is becoming a game for the big boys. New upstarts like Sahara and UTV are pumping in money behind production and marketing to create mega commercial hits like No Entry and Rang De Basanti while Anil Ambani‘s Adlabs Films is planning to have a high-point presence in all the segments of film business.

    The movie business landscape, in fact, is changing fast. Indiantelevision.com takes a look at how the industry is shaping up to script a new tale.

    MORE BANKS LEND, BUT STILL CAUTIOUS…

    IDBI Bank is the leader in the pack, having late last year decided to double its exposure limit to Rs 2 billion. No wonder the big daddy of film financing believes it has found the right formula for lending to the industry. It has sanctioned Rs 1.8 billion while disbursals stand at Rs 850-900 million towards movie projects.

    Says IDBI deputy managing director Jitender Balakrishnan, “It has proved to be a successful product for us, giving us returns which match other industry sectors. This is why the IDBI board took the decision to increase the upper limit to Rs 2 billion.”

    Other banks like UTI have entered the fray, but the lending is still extended to select production houses and the norms are strictly observed. IDBI, for instance, funds only corporates who have a track record of three years and insists on a 1:1 debt equity ratio. “We don‘t deviate from these lending norms. Besides, the size of the loan can‘t be less than Rs 40 million and anything above Rs 200 million will have to be backed by a completion guarantee,” says Balakrishnan.

    Banks rely on an advisory committee drawn from the film industry itself to examine the merit of each project proposal. The approval of the project, however, is done by an internal team after weighing several considerations including revenue earning potential of the movie. “It is just over four years since banks have started film financing. The process is evolving and as the confidence grows, banks will keep changing the lending norms,” says Balakrishnan.

    Banks believe there is a need at this stage to stand vigil in a sector that has chronic ups and downs. They have gone slow on expanding their film finance portfolio. Though film producers are required to repay the debt before the release of a movie, holding IPR rights may not be a safety net for loan recoveries. Take Bank of India which has financed just Rs 250 million for five movies over a four year period. While two movies under its portfolio have been successful, one has just about managed to recover costs.

    “Another project is stuck over disputes and the movie is yet to be released. We have also financed a fresh project which is coming up for release. Organised finance is coming, but the pace is very slow. We have nominated just one branch in Andheri which does film financing. Because of its risky nature, we have an upper ceiling of Rs 50 million per movie,” says Bank of India general manager (credit) S Sampath.

    An early lender into the film business, Bank of Baroda is extremely cautious about providing debt to the film sector. “Our experience has not been good so far,” says a senior official of the bank.

    That has not stopped some banks from experimenting in the glamour industry. Export-Import Bank of India (Exim) has recently agreed to lend $7 million to Crest Animation Studios in what would be its first funding for an animation film project. Starting to lend to the film sector since April 2004, the bank has financed Rs 580 million for nine movies so far. This includes Rs 400 million to noted filmmaker Yash Chopra for movies like Veer Zaara, Hum Tum, Bunty Aur Babli and Dum. It has also lent Rs 100 million for Farhan Akhtar‘s Don and Rs 80 million for Mangal Pandey – The Rising.

    “We feel the entertainment sector will become big business. We decided to start with the film industry. But we pick and choose projects very carefully. Unlike the telecom and other sectors, it is far riskier than what we have been used to funding. We have been lending only to established names,” says Exim Bank general manager Mathew John.

    Organised finance is available at much lower interest rates, but is not accessible to fresh filmmakers. Private financiers charge as high as three per cent on a monthly basis. “Almost all banks are now open to financing films based on the historical track record and balance sheet of the producer, in addition to the security of the film negative. Interest rates range between 9-13 per cent. There are instances of institutions like Exim Bank offering foreign exchange loans against overseas rights at cheaper rates,” says UTV Software Communications COO Ronald D‘Mello.

    Exim Bank, which has been funding Hindi movie projects that have a potential to earn foreign currency revenues in the overseas market, offers floating interest rates.

    So what do banks need? “This industry will have to corporatise more. Besides, there has to be a complete cheque mode of payment so that the accounting is transparent. An established track record is also important,” says Sampath.

    The lesson in this? If you are making your maiden movie, the chase to the bank for arranging finance may turn futile. Banks are willing to lend to corporate-driven organisations, provided the norms are in place. Such companies can leverage on their equity and internal accruals to raise debt as a mix of funding for movies.

    “Of the 117 Hindi movies produced last year, the fund requirement would have been around Rs 7 billion. Only 10 per cent of this must have come from organised finance,” says a trade analyst.

    What, though, is not flowing in is equity into film financing from venture capitalists (VCs) or high net worth individuals. Despite attempts at setting up Film Funds, no progress has been made. Explains D‘Mello, “There are no tax or other regulatory incentives to attract subscribers to the Fund. Also, there is a high risk perception of Bollywood movies coupled with non existence of completion bonding which works well overseas.”

    As film production becomes more expensive, innovative forms of financing have to creep in to make it available to a broad section of filmmakers. One way is to ensure a transparent online accounting system on the exhibition side and make that cash flow accessible to banks and institutional funding agencies. “By securitising the cash flows from the theatres into the funding agencies, risks can be made more acceptable. Multiplexes have a role to play in this and banks can take a position on the movie‘s future earning potential,” says Mukta Arts CEO Ravi Gupta.

    A more radical suggestion is to allow the formation of limited liability companies. “Such companies can be formed for individual projects. Foriegn and high net worth investors can come in for a movie and after the completion of its commercial exploitation, the company can be allowed to close down. This is a practice in the western countries. But the government will have to allow this format in India,” says Gupta.

    INDUSTRY GETS MORE CORPORATISED, BUT DISTRIBUTION STILL THE IRRITANT

    The rules of the filmed entertainment business are changing. The production process is getting more corporatised, multiplexes are bringing in a breath of fresh air on the exhibition front, and investors are watching with keen interest which way the fortunes are going to swing.

    The production cycle is getting shorter for at least the organised players. Mukta Arts, for instance, took six months to produce Shaadi Se Pehle. The duration of completing a movie, though, varies from project-to-project and also depends on the production house. But, as Gupta says, the average time spent on the floor has generally shrunk.

    The industry, once used to waste and extravagance, is realising the value of streamlining operations. Focus on good stories, well-oiled machineries, planned executive and effective marketing campaigns are going to be crucial in driving down costs and getting mainstream hits. Says D‘Mello, “People are not working on broken schedules. This has brought down time and cost escalations.”

    Fragmenting and targeting niche audiences is possible today with the number of multiplexes which have sprung up across the country. Multiplexes are also securing a better revenue flow across the distribution value chain. Says E-City Ventures CEO Atul Goel, “The revenue leakage on the distribution front is still an issue. But there is an improvement because of the multiplexes which have brought about transparency.”

    Digital delivery of movies will also drive change. But it is still at a nascent stage and is taking place at the low-cost end. “The industry has around 250 digital exhibition theatres across the country. We will have to push it up to 2,000 to 3,000 theatres,” says Gupta. Mukta Arts has a joint venture with Adlabs for the digital delivery business.

    Multiplex operators are fast ramping up. Says Goel, “There are around 100 multiplexes in the country. But with the players lining up major expansion plans, this is expected to grow to 250 multiplexes within two years. We are scaling up from four properties and 17 screens to a total of 35 multiplexes and 150 screens by early 2008.”

    Adlabs plans to invest Rs 2 billion over three years towards multiplexes, adding 100 new screens by the end of FY 08 to take the total to 135 screens. Even on the production side, it aims to produce over 10 films in a year from FY 06 onwards. “We will have to run faster and higher. We have signed up Ram Gopal Varma, Ramesh Sippy, Prakash Jha and Vipul Shah,” says Adlabs Films chairman and managing director Manmohan Shetty.

    Such ramp ups across the top production houses like Yash Chopra, Mukta Arts and Sahara will be a challenge and will depend upon how much the market can absorb. Though multiplexes are growing, it remains to be seen how much additional supply they can take in.

    “The exhibition side is getting valued already. On the production side, as more companies scale up and start demonstrating earnings, the scepticism will disappear and investors will find it a more acceptable model,” Says Enam Financial Consultants vice president Salil Pitale.

    STRIVING FOR VERTICAL INTEGRATION MODELS

    A more varied business model is taking shape as corporate houses strive for size and vertical integration. Adlabs, Sahara, UTV and E-City originate from different backgrounds and are creating empires that will synergise with their other ventures.

    Ambani is building an entertainment powerhouse that will sprawl over his telecom venture. Having paid Rs 3.6 billion for a 51 per cent stake in Adlabs, he quickly raised $100 million through an offering of foreign currency convertible bonds (FCCBs).

    Flushed with funds, Adlabs will scale up movie and radio operations with a heavy presence in exhibition, production, film processing and distribution segments. His Reliance Infocomm will link up threatres and deliver content through its fibre optic backbone. His foray into home video segment will help provide content for Reliance Infocomm‘s triple play service which Ambani plans to launch by the end of this year. The direct-to-home (DTH) service will also gain content from Adlabs.

    “In this type of a model, it is viable to create an integrated platform, scale up and absorb all the risks from the vagaries of film business. Ambani is best poised to take the film industry forward, but has to get the content right,” says an analyst.

    Subroto Roy, on the other hand, grew up a broadcast business and then spread his fabric over Bollywood. His Sahara motion pictures division has churned out several hits and can play a big role in pushing the flagging general entertainment channel forward. He has also launched a Hindi movie channel and, along with news, is hoping to have enough firepower to migrate from free-to-air to pay TV business.

    An outsider in film production, Roy has turned out to be one of the leading producers with a pipeline of 40 movies.
    Sahara‘s model of tying up with production house K Sera Sera, which had a long term deal with Ram Gopal Varma, for 10 movies proved fruitful. The company also worked out multiple-movie deals with Boney Kapoor and Madhur Bhandarkar. “We are making 20 movies this year. We will be totally funding these movies. We are also into film distribution business,” says Sahara One Media and Entertainment Ltd CEO Shantonu Aditya.

    UTV, which started as primarily a TV content production house, has marched into movies and broadcast areas to boast of being an integrated media company. The company has produced seven movies over the last 30 months and more are on various stages of production now. “We do not consider film business more risky compared to other media businesses. Selecting the right project after due evaluation and research, having a slate of film projects of varying content profiles, managing cost and time schedules well and effective and timely exploitation of revenue potential are the key to successfully managing the film business,” says D‘Mello.

    UTV was commissioned by Star to produce movies for them. “Broadcasters of late are looking at acquiring a slate of movies from producers for television exploitation compared to film acquisition earlier. Apart from assuring future content, this also helps broadcasters to amortoise the cost over multiple films,” says D‘Mello.

    Television content companies like Balaji Telefilms have also made cautious steps into film production. Their aim: to drive topline growth. Movie companies like K Sera Sera are also going the reverse way by foraying into TV content business.

    Pure film companies are aiming to size up their business. Yash Raj Films has a strong overseas distribution arm and has set up a hi-tech studio to grab outsourcing work from Hollywood. Others like PNC have attracted equity financing, but are trying to grapple with ways to grow the business. Mukta Arts has opened an academy to train professionals and have a constant supply of talent to feed the industry.

    Exhibition companies are getting into the distribution business. “Exhibition margins range between 15-20 per cent. It makes business sense for us to be in distribution, which has margins of 30 per cent, as well. We have entered Gujarat territory as we have taken 22 theatres on hire there. But one has to progress selectively into territories,” says Goel.

    Distribution companies are also finding the climate conducive for movie production. Sony Pictures Releasing of India, which had obtained FIPB (foreign investment promotion board) approval for film production, had stayed out of it for years. But recently the company announced a joint venture with Sanjay Leela Bhansali for production of Hindi movie Saawariya (Beloved). “We are globally into film production. We think the time is also right as corporatisation has led to a more organised production process,” says Sony Pictures Releasing of India managing director Uday Singh.

    For any chance of organised funding to get better, efficiencies have to grow across the value chain. Aligning with directors for multiple films can draw and lock in talent while co-productions can raise the production values. On the positive side, the dependence on domestic theatrical collections has reduced while international territories are yielding better cash returns.

    The revenue mix for good movies is more widely spread today. While domestic box office accounts for 50-55 per cent (earlier 70 per cent) of total revenues, satellite TV rights make up 20 per cent and overseas territories 10-15 per cent. The home video segment is also growing, accounting for 10 per cent revenues. In the wide basket, it is only the music rights which have sunk over the years and seen very little rise.
    New media exploitation options like mobile and internet also offer promissing revenue potential for film content.

    The best thing to happen is the emergence of a diverse range of players who are aggressively getting into the film business for strategically different reasons. This is good for the health of the film industry and will fuel its future growth.