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  • Zee Telefilms to restructure distribution business

    Zee Telefilms to restructure distribution business

    MUMBAI: Zee Telefilms Ltd is reviewing its entire film distribution business plan, following a hit of around Rs 50 million and a need to change the traditional model.

    The film production activity will also slow down as a consequence and a definite scheduling plan will be in place only after finalising a restructured distribution model. The alliance with Rajshri Pictures for the exclusive theatrical distribution of all Hindi pictures has been called off after the eight movies that were channelised through the pipeline did not turn out profitable.

    Zee is weighing various options including getting into the film distribution business on its own. “We incurred a loss of around Rs 50 million for the eight movies we distributed. We feel that the distribution model needs to change,” says Zee Telefilms chief executive officer of film production and exhibition Nitin Keni.

    One of the options could be setting up a distribution network in selected territories on its own. Taking over old distribution networks and modernising them could be another model.

    A new plan on film production and distribution will be ready and into play only in the next financial year. Zee Telefilms will stop procuring movies for distribution till then. The company had spent about Rs 100 million to acquire the eight Hindi movies for distribution through the Rajshri network. “We will not push any new product into the pipeline unless we understand the distribution,” says Keni.

    Zee had decided to partner with Rajshri Pictures for distribution of Hindi movies after box office hit Gadar (its own production) failed to recover about Rs 500 million from the system. Under the commercial agreement in December 2003, Zee was to procure the rights for the theatrical distribution of Hindi movies. Rajshri, which has 20 distribution offices covering more than 13,000 screens across India, would provide its network for exploitation.

    “We lost money in each of the movies that we distributed,” says Keni. Among the movies that were distributed through this chain were Who Tera Naam Tha, Lakshya, Yuva and Kyon Ho Gaya Na.

    Zee, however, has fared better in overseas distribution. The company is using its existing offices in the US, UK and South Africa to go for a direct distribution model. So far, it has distributed just one movie – Mujhse Shaadi Karogi. “We will continue with our overseas distribution,” says Keni.

  • Zee, Rajshri Pictures ink film distribution deal

    NEW DELHI/MUMBAI: Having brought in Nittin Keni as the CEO of the company’s films division, the Subhash Chandra-promoted Zee Telefilms today announced a tie-up with one of the biggest film production houses in India, Rajshri Pictures. The deal involves domestic distribution of Hindi and other language films throughout the country.
    In “Zee-Rajshri Film Distribution”, an exclusive tie-up between the two companies will distribute films, produced, co-produced and acquired by both companies through more than 20 distribution offices all over India. The current network of Rajshri will be modernised and linked for easy and transparent flow of box office information. This will enable easy access of information to producers.
    Zee had recently said that it has big plans for film business and three movies from its stable are in the pipeline in various stages of production.
    A formal announcement to this effect was made this evening by Chandra and representatives of the Barjatya family, which owns and controls Rajshri Productions, one of the oldest production houses of India and credited with India’s all-time mega-hit Hum Aapke Hain Kaun.
    Speaking at the occasion Chandra said, “I am glad that this new development will harness the potential of the industry and address the paradigm shift that is taking place globally in the field of cinema. At the same time our group will continue to address issues of the film industry especially piracy, entertainment tax etc”.
    Present at the occasion Kamal Kumar Barjatya of Rajshri pictures said, “This platform shall be available to the entire film industry as a single window service with access to the majority of the best movie theatres spread across the country.”
    Commenting on new initiative, Keni said, “Beside being a distribution service provider, we also intend to offer marketing services to producers as their ‘marketing partners’ for selective projects which, are at the conceptual or pre-launch stage. This will enable producers to get the best yield through exploitation of films from not only domestic market but also overseas. This is not only for theatrical exploitation but from all the windows of exploitation of movies, whether it is DVD, home video, TV, audio, satellite etc.”
    Film industry sources said the revenue sharing would be done on the basis of mutual agreements.
    Far from being a simple process, over the years film distribution has evolved into a complex structure where films are sold and distributed under various permutations and combinations, including the film producer also taking a direct hit if the film fails and the distributors’ margins too growing phenomenally.
    However, what is not clear at the moment is whether the distribution deal would also give Zee Telefilms free access to Rajshri-produced films, most of which have set the cash box jingling, to be aired on Zee’s TV channels.
    Film industry sources indicated the deal may dwell on this aspect too wherein it is possible that Zee Telefilms would get the broadcast rights for past and future films from the Rajshri stable at prices cheaper than the prevailing market rates.
    Meanwhile, news about the impending Zee-Rajshri merger/acquisition deal sparked off activity at the Zee Telefilms counter on the stock exchanges earlier today.
    At 1400 hrs. the company’s scrip was being quoted on the National Stock exchange at Rs. 140.30, up 7.14 per cent or Rs. 9.35. The last closing rate of Zee was Rs. 130.95. At the Bombay Stock Exchange at 13.47 hrs., the stock was being quoted at Rs. 139.20, up 6.06 per cent.
    The Zee scrip touched a year high of Rs 151.90 on 6 November and a low of Rs 60.15 on 31 March.
    Market analysts are bullish on the Zee scrip. CNBC TV 18 quoted technical analyst Rajat Bose advising holding on to Zee scrip as it was looking strong on charts. “Trading above Rs 135-137, Zee is likely to reach a target of Rs 143. That is where it is likely to see a fair bit of resistance,” Bose told the business channel in the forenoon.
    Queried as to the reasons for the sharp rise in the scrip, a market analyst, on condition of anonymity, said it could be partly linked to reports that had appeared in two financial dailies today, both of which he said, were factually incorrect.
    Zee Telefilms Limited, which reported a total earning of Rs 3,231 million and a net profit of Rs 700.8 million for the quarter ended 30 September 2003, is India’s largest vertically integrated media and entertainment company. It has an integrated range of businesses, encompassing the content-to-consumer value chain of media and entertainment.
    The company is the largest producer and aggregator of Hindi programming in the world, with more than 30,000 hours of original programming in the library and was ranked as the ninth most popular brand within a decade of its launch in the early 1990s. Siti cable, the cable arm of the company, is the largest MSO in India with an estimated reach of over 6.5 million households.
    Boasting multiple distribution platforms, the Zee Network reaches an estimated 225 million viewers in over 80 countries globally, including the USA, Canada, Europe, Africa, the Middle East, Australia and New Zealand.