Production houses take to movies to scale up growth

MUMBAI: Remember Balaji Telefilms chairman Jeetendra Kapoor saying that the listed company would not diversify into movies as it is a risky business?

That may well be a thing of the past. Today, Balaji Telefilms is busy drawing a roadmap for a rich pipeline of movies to ride on the success of its first production Kya Kool Hai Hum.

A clip from the movie 'Koi Aap Sa'

Recently released is Koi Aap Sa, and a sequel to Kya Kool Hai Hum is planned for production. Though this fiscal will see just these two launches, more are to come next year.

The production house, which has almost all of its revenues coming from TV content, is still taking a cautious approach to movies. The plan is to make small-to-medium budget movies. But it feels movies can be a good business model, with multiple revenue streams including satellite TV rights picking up.

Says Balaji Telefilms chief financial officer V Devrajan, "If you can plan and control costs, then it can be a good bet."

Taking a bigger bet on movies is UTV Software Communications, extending its television content creation business. In the quarter ended 30 September, this segment has contributed 49 per cent of the company's total revenues. UTV's most celebrated film Swades pocketed Rs 40 million through the sale of satellite rights.

A clip from 'Rang De Basanti' starring Aamir Khan

And the big films in the pipeline are, among others, Rang De Basanti (starring Aamir Khan), Namesake (directed by Mira Nair and co-produced with Fox and Entertainment Farm), and a co-produced film with AB Corp starring Amitabh Bachchan.

Apart from film production, UTV is aggressive on theatrical distribution. During the fiscal 2006, films lined up for theatrical distribution in India and overseas include Shaadi No. 1 (produced by Vashu Bhagnani and directed by David Dhawan, Deewane Huey Pagal, Bluffmaster and The Myth (Jackie Chan & Mallika Sherawat).

B.A.G Films Ltd. has also ambitious designs of foraying into movie production. The company is in the process of rolling out four movies - two Hindi and two regional. The first movie titled Rockin will be ready for release in May 2006 and stars Sushmita Sen, Shiney Ahuja and Kim Sharma. The second movie (yet untitled) will be directed by Saurabh Narang and will star Parineeta fame Vidya Balan. The two regional films - a Punjabi and a Bhojpuri one are also untitled. While the Punjabi movie will be released in April next year, the Bhojpuri one will be ready for release in the second half of 2006.

"The two Hindi movies will be medium budget, whereas the regional movies will be low budget. We are targetting the international markets of US, UK and Canada with our Punjabi movie and obviously the northern parts of India," says B.A.G Films managing director Anurradha Prasad.

So why are production houses writing new scripts? Scalability seems to be the most common answer. How will production houses grow if they are stuck to just their core competence of television content creation? Creative Eye is also turning to movies as it looks at topline growth which was earlier provided by pubcaster Doordarshan. Founder-promoter Dheeraj Kumar has announced he is making an English movie, reviving a project that was planned two years ago.

Besides, the barrier between television and films, says Prasad, is gradually decreasing. "The cost of making a medium budget film is almost the same as what goes into making one serial in a year. What's more, 54 per cent of India's population is below the age of 24 years and we are looking at creating a lot of stimulating content for this set of audience. To be present in all forms of content and platforms is our USP and our movies' venture is just an extension of this," she elaborates.

Movie production is, of course, fast becoming the most popular route, aided by the growth in multiplexes and the fact that there are more hits in the marketplace this year. But it is not a one-way traffic. Movie production houses are also taking the reverse path to find growth in the TV content business. K Sera Sera, primarily a movie production house, has floated a subsidiary to handle television content.

Production houses are trying to find cushions in other revenue streams. Mukta Arts, for instance, has done a turnkey project for INTV and, in exchange, got equity in the Dubai-based city-centric fashion and lifestyle channel.

So what are production houses driving at? That the time has come for them to scale up and build multiple revenue streams. The sad truth is that production houses in India, barring perhaps Balaji Telefilms and UTV, have no robust size or model that can protect them from the volatile nature of the business.

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