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'When
it comes to prime Hindi movie entertainment, it is B4U
Movies that the viewer will switch to'
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Posted
on 27 October 2001
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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.
Indiantelevision.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.
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