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Tag: Yash Raj Films

  • Moser Baer entertainment business CEO Harish Dayani : Harish Dayani- Moser Baer entertainment business CEO

    Moser Baer entertainment business CEO Harish Dayani : Harish Dayani- Moser Baer entertainment business CEO

    Moser Baer is shaking up the home video market with its low pricing. While VCDs are available at Rs 28, DVDs are priced at Rs 34.

     

    Will the market dynamics change as new players like Adlabs hatch plans to enter the business?

     

    In an interview with Indiantelevision.com’s Sibabrata Das and Ashwin Pinto, Moser Baer entertainment business CEO Harish Dayani elaborates on how the home video market will never be the same.

     

    Excerpts:

    Why did Moser Baer decide to get into the entertainment and home video market?
    Moser Baer is the world’s second largest optical storage manufacturer. As we make 10 million discs a day, we have economies of scale. We can manufacture a disc at a price that not too many people in the world can match. Having such a strong backend in this form of business, we were somewhere in the commodity space. The obvious forward integration for us was to add content. In India, there is nothing like entertainment as far as replication on a product like a disc is concerned. This is where the whole thing started around a year ago – and we had the money to do it.

    When several home video players like Time have folded up, what made you think that Moser Baer could fix it right?
    We felt there were gaps in the industry which we could fill. The home video market is fragmented and has local players. We saw an opportunity in this to have a pan India presence. Distribution is another area that needed attention. Also, consumer branding is important.

    How did you take care of the content?
    We realized that if we were to be a major player, we needed to own content on a large scale. We acquired 7000 movie titles and have become the largest content owner, controlling one-third of the entire film production chain. We picked up content from different sources (including from Time). We decided to be the first company that deals with home video in all languages.

    Isn’t regional films a significant component of this?
    We have close to 1800 Hindi titles. The rest is regional – Tamil, Telugu, Marathi, Punjabi, etc. Besides, we have around 600 international titles sourced mainly from independent producers.

    But how do you source top content when the big Bollywood studios like Yash Raj Films have set up their own home video labels?
    We simply can’t. But there are many who don’t have their home video labels. And we ourselves will be in the film production business.

    Pricing seems to be an important strategy for Moser Baer. How much volumes do you have to reach to make this a profitable business model?
    People say that Moser Baer sells products at a low price. For us, price was the outcome of other factors; it definitely was not the starting point. Surely, we wanted to have a pricing that the masses would find attractive. So we priced DVDs at Rs 34 and VCDs at Rs 28. And it is not that we are operating under negative margins.

    When you start buying big Bollywood movies and have to pay a high content cost, will your operating margins not puncture?
    We have all kinds of movies. For me, a 1950 film is as important as Munnabhai as it will generate a certain amount of interest among a certain section of audience and be commercially viable. The concept of old and new movies are irrelevant. In terms of recent titles, we have films like Life Mein Kabhie Kabhie, Ek Chalis Ki Last Local. Apne has yet to come. We also have two films of Venus.

    How do you align with the international studios as they are already having exclusive distribution deals with the other home video players?
    We will be busy for a year with the amount of titles that we have. Even if we release 30 titles a day, it will take me over a year and I am not a magician. In terms of tying up with big international studios, the question is in terms of adding value. We are setting up our business. When we have established ourselves, then we can talk to other players with confidence and authority. We have to demonstrate how our business model works.

    How are you sprucing up your distribution network?
    When we were toying with the idea of entering into the home video market, we realized that we could have a strong backend but that does not necessarily make for a business model. Home video distribution, or for that matter the entire entertainment distribution, is wholesale-oriented. Entertainment firms have a few select group of wholesalers; what the wholesalers do after they get the product, nobody knows. We felt the need for a distribution network that is similar to an FMCG system. We wanted to have our own distributors spread across the country.

     

    Most home video businesses have 20-40 distributors across the country. We have 500. We feel that every town must have a distributor. We do not want to depend on a wholesaler in a large town who will cater to a small town. We tell distributors to give the product to retailers in their area. Entertainment product in this country is available in some 20,000 stores. Our product is available in 100,000 shops and we are just two months old. The aim is to take this to a chain of 300,000.

    What are the margins you are offering to the distributors?
    The wholesale distributor has a five per cent margin while the retailer enjoys a 25 per cent margin.
    ‘Home video market is fragmented and has local players. We saw an opportunity in this to have a pan India presence. We decided to be the first company that deals with home video in all languages‘

    How crucial is branding as part of Moser Baer’s strategy?
    The myth in the entertainment industry is that people just go and buy titles at any price and it does not matter who is selling them. We want to break that myth. Our message is that Moser Baer is adding a lot of value in terms of the quality of manufacture. We have a certain image. It is not just Munnabhai MBBS; it is Moser Baer Munabhai MBBS. It is important that we reinforce faith in our product in the mind of the consumers.

    Will you have your own stores as part of the branding exercise?
    We have two – one in Pondicherry and the other in Ahmedabad. We will have 50 by the end of the year and 250 by the end of 2008.

    How has the deal with Pyramid Saimira helped expand your reach?
    Pyramid Saimira makes and distributes films. We have the first right of refusal for home video rights. They also have a chain of theatres and have deals with malls. We are looking at opening Moser Baer franchisee stalls there. Our products will be available in the vicinity where people come. We are also talking to tie up with other theatre and mall owners.

    Are you looking at entering the rental market?
    Firstly, this is an unauthorised business. If someone buys a Moser Baer disc for commercial exploitation, then it is against the law. We do not have plans to enter the rental business. However, we are not trying to discourage this. If somebody approaches us to do business with them, we would consider licensing our content.

    How about getting into alliances with broadcasters so that you can acquire wholesome rights?
    We look at satellite content only if we find that we are not getting the home video rights. Do I need to align with other players? If I have 7000 titles and another firm comes up to me and says that he also has 7000 titles, then we might join hands to tackle the market together. This way we can take our own decisions that would be best for us.

    What are the plans on the film production front?
    We have signed a co-production deal with filmmaker Anubhav Sinha for a basket of 12 movies. We have also signed up with Anthony D’Souza (Ishaan) and Priyadarshan. We are also negotiating with four big filmmakers. The first movie to kick off, though, is Shaurya.

     

    We will also produce movies that we will release for the home video market. This should happen sooner than later. We also plan to get into the film distribution business but at a later stage.
    Are you looking at producing regional language movies?
    We have signed with Prakash Raj for three films in Tamil and are also looking at other languages. Our eventual aim is to make films in all languages.

    How much are you pumping in for your entertainment business?
    We intend to invest Rs 5 billion over three years. A major chunk of this, of course, will be towards the home video business.
    With low pricing, what growth can we expect in the home video sector?
    Our estimate is that it would grow at four to five times the current size in three years. We want to have a 50 per cent share of this.

    Is the home video market dynamics up for total change?
    Will consumers look at our price and wonder why other titles from other firms are priced much higher? Possibly. That is for them to decide. Some players may charge higher but eventually the price will come down from where it is now for everybody. I don’t believe premium or popular content can command a three figure price. The home video business model will be viable for those who are able to stay around in it.

    You have moved into HD DVD. Won’t the conflict between the two incompatible formats Blu Ray and HD DVD prevent quick uptake of the technology?
    This is still five years away from happening in India. VCD players still dominate, though the number of DVD homes is growing.

    Does Moser Baer nurture ambitions of eventually becoming a studio?
    Consolidation is happening in the entertainment space across the globe. This will also happen in India. Corporates are entering into the movie business and aggregation is taking place. We are also trying to be in the different entertainment value chains.
  • Exim Bank puts Rs 2 billion behind films in FY07, mulls equity in animation companies

    Exim Bank puts Rs 2 billion behind films in FY07, mulls equity in animation companies

    MUMBAI: For the Bollywood industry which is keen to tap the overseas market, there is good news. The Export-Import Bank of India (Exim Bank) is willing to loosen its purse strings and has extended funding to the tune of Rs 2 billion for eight movies during the current fiscal.

    Exim Bank, in fact, has funded the recently released Yash Raj Films’ big ticket movie Dhoom 2. “We have lent Rs 2 billion to the film industry this fiscal,” Exim Bank chairman & managing director TC Venkat Subramaniam tells Indiantelevision.com. “Our total exposure to the sector is Rs 4 billion.”

    Of the other Yash Chopra movies funded by Exim Bank are Veer Zaara, Hum Tum, Bunty Aur Babli and Dum. The Bank has also financed Don (Rs 100 million) and Mangal Pandey – The rising (Rs 80 million). Exim Bank has been funding Hindi movie projects which have a potential to earn foreign currency revenues in the overseas market.

    Animation is another area in the entertainment sector that has drawn the attention of Exim Bank. It is eyeing the option of picking up equity in start-up animation companies. “With their outsourcing models, animation companies in India have the potential to grow. Apart from prividing debt, we may consider equity participation in the start-ups. But for the companies which are listed and are already enjoying high valuations, it doesn’t make sense for us to enter as equity partners because they are already highly valued,” says Subramaniam.

    Exim Bank is in talks with an animation company to provide finance for the expansion needs. With Crest Animation Studios Ltd, it has already agreed to lend $7 million to Crest Animation Studios Ltd.

    The Bank has extended lending to over Rs 4 billion for film projects which have potential to earn foreign exchange. “We are not only financing on production but also on the overseas distribution side.

    Noted film producer Bobby Bedi will approach Exim Bank to discuss his new project Mahabharata for which he plans to invest Rs 3-4 billion. Bedi is considering institutional financing for the epic project which will extend to a talent hunt, TV series, film trilogy, gaming, animation and a theme park. “Bedi is looking at an innovative financial structuring. He is taking the project to financial institutions. He is also going to approach Exim Bank for this,” an industry source says.

    Exim Bank will examine the cash-flow situation of the project as it spans over different formats and will take a longer period to complete.

  • Punjab Government to pass anti-piracy bill in September

    Punjab Government to pass anti-piracy bill in September

    MUMBAI: The Punjab government has decided to pass a bill to prevent piracy in September. The decision was conveyed to film maker Yash Chopra, by the chief minister of Punjab, Captain Amarinder Singh, post a meeting between the two.

    In the meeting, Chopra apprised the CM of the grim scenario that the industry was facing because of the threat of piracy. Captain Singh took note of the points and declared his government’s resolve to take firm steps to combat the menace.

    Chopra said, “At Yash Raj films, we regard piracy as a cancer that is afflicting the whole industry. The Indian film industry loses a whopping Rs.17 bn annually due to piracy. If not checked right away, it will cause the eventual destruction of this great industry that provides livelihood to thousands of people. And for a creative person there can be no greater tragedy than seeing his labour of love debased in poor quality reproductions where hardly 10 per cent of the creative thought comes across in the manner it was intended.”

    Yash Chopra has been at the forefront of the anti-piracy movement in the industry for a while now. Through his efforts, and otherwise, various government and regulatory bodies, have begun to take note of the dangers of piracy and have passed regulation to combat the same.

    The Tamil Nadu government passed a similar bill in 2004, and since then Yash Chopra has been in talks with the Punjab CM, and finally his efforts have borne fruit. With the Punjab government taking a similar step, the anti-piracy movement has taken a significant step forward.

    Chopra adds, “I would like to thank the government of Punjab for having taken this significant step, and would request other state governments to lend their support to the anti-piracy movement. We are always on the alert to the threat of piracy, but only with support from state and national governments can we bring about the change that is so sorely required.”

  • Frames debates the merits of the studio versus the independent filmmaker

    MUMBAI: The relationship between studios and independent filmmakers was a subject discussed at an afternoon session of Frames, the convention for the business of entertainment. The speakers were Sahara One CEO Shantonu Aditya, filmmakers Mahesh Bhatt,Govind Nihalani and Bobby Bedi and Adlabs Films chairman Manmohan Shetty.

    Nihalani pointed out that studios and independent filmmakers have their strengths and both parties should look to work with each other. “Artistically released commercially successful films can be made.
    Corporates should realize that creativity is equity. The independents should realize that money is as important as creativity. Studios should know that sometimes small risks pay off big time. That is because audiences like to be surprised.

    “A studio basically operates on calculated budgets and big stars to secure an ROI. Scripts are chosen if a star is attached. This ensures a long run. An independent filmmaker, on the other hand, feels that an idea and a directors treatment of that idea is what creates value. Lavish sets, big stars add value. However, they do not create value. There is a way to bridge the two and both should realize that they need each other.”

    This point was echoed by Shetty who noted that in the West independent filmmakers go the studio route to release their films. In India, there are studios like Yash Raj Films. However, important directors like Karan Johar still call the shots and studios chase them for the rights to distribute their films. “Reliance buying Adlabs means that more films will be made. Fortunately we have not suffered any losses till now.”

    Bhatt spoke on the benefits and challenges of being an independent filmmaker. “Movies that do not have personal supervision of an idea are doomed to fail. One does not only make movies. You need passion and religious fervour. There is talk of delivery systems but you need to invest in ideas. Otherwise these systems will be parched of good content. It is important for a filmmaker to keep himself lean and thin. A studio executive unfortunately only understands a Shah Rukh Khan. He does not understand the value of an idea. I would argue that studios are victims of hype. An independent filmmaker, though, has to pay off any debts incurred. He cannot hide behind abstractions.”

    Bedi said that indepdents are better incubators of ideas. “In the West studios do not incubate ideas as it is too expensive. An independent filmmaker approaches a studio with an idea. The studio then works that idea to a maturity level where one is able to confidently approach exhibitors.”

    Aditya says that Sahara One has had success as it concentrates on its strengths of marketing and distribution. “We have made 14 films as projects. There have been start dates and finish dates. We have also spent quite a bit on marketing. We have worked in different genres. We picked up Page Three when nobody wanted to touch that film. At the same time, it is difficult to know which idea will work. We get 70 ideas a week. Of course, each presenter of the idea is confident in it. Once an idea is given the go ahead, we do not interfere with the creative process other than keeping a check on how the work is progressing. The writer is given freedom.”