'The ability to de-risk is more now' : UTV Motion Pictures chief executive officer Siddharth Roy Kapur

UTV has expanded its movie slate for the fiscal and is eyeing a revenue of Rs 4.5 billion from this segment, up 43 per cent from the year-ago period.

Upping its operations over the years, UTV has a roster of 12 movies this fiscal. UTV‘s scale-up goal: to have a peak pipeline of 15 movies a year.

Narrowing its risks, UTV has indulged in a high element of pre-sales activities. The environment has been conducive as prices for satellite TV telecast rights have ballooned with Viacom18 planning the launch of a Hindi movie channel next year. The syndication model, widely popular last year, is being thrown out of the window.

After delisting from London‘s Alternative Investment Market (AIM), UTV Motion Pictures is not looking at raising further capital as the business has reached a self-generation mode.

In an interview with‘s Sibabrata Das, UTV Motion Pictures chief executive officer Siddharth Roy Kapur talks about the balance film studios need to perfect between scale and a de-risked strategy.


Indian movie studios were talking of scale a few years back. Now de-risking seems to be the mantra. Is it because in the process of scale some of the studios burnt their fingers?

Building scale and de-risking are not parallel processes. It is just that the ability to de-risk is more now with the overall slate of movies going up.

But the trend is to lock in the music and satellite television telecast rights before the theatrical release of the movies. Haven‘t studios increased the pre-sales deals this fiscal?

The opportunities have definitely increased as the market for satellite TV rights has heated up with a broadcaster planning to launch a Hindi movie channel. The syndication model, widely popular last year, is being thrown out of the window. As broadcasters are chasing exclusive rights, the rates have gone up. This is working out well for the broadcasters and the producers.

Also, with a diversified and expanded slate, studios have been able to derive higher values. We at the early part of the fiscal, for instance, had locked in Rs 2.37 billion from pre-sales of different rights.

Aren‘t you in the process sacrificing an upside potential?

We are offered a premium even before the movie is out. And if we foresee a significant upside potential, we do not go for pre-sales. We decide on a film-to-film basis.

We have also come out with new models. In case of Raajneeti, we did a satellite deal based on the theatrical performance of the film. We looked at higher slabs based on the performance index.

But don‘t you have a de-risking approach for each movie?

We have developed the ability to de-risk on each movie. As a strategy, we look at de-risking on the satellite and music rights front. On the theatrical distribution front, we prefer to handle it ourselves.

With pre-sales opportunities on the rise, aren‘t you tempted to scale up further?

We have managed to scale up to 12 movies a year and have a diversified slate in terms of genre and talent. We have a mix of movies ranging between as low as Rs 30 million and as high as a blockbuster can cost. We have the ability to release in 45 countries.

As for the future, we are looking at a 12-15 movie slate. We feel that it is not a feasible model to scale up more if you are to maintain the same level of quality control.

Around 50 per cent of the slate will be through co-productions. UTV will, however, handle the marketing and distribution of these movies.

‘We are looking at a 12-15 movie slate a year. We feel that it is not a feasible model to scale up more if you are to maintain the same level of quality control‘

So are we going to see a slower growth in the top line?

We are on course to achieve a turnover of Rs 4.5 billion this year (up from Rs 3.15 billion). There will be organic growth and we will also do bigger movies.

With more multiplexes and digitisation coming up, there will be growth in theatrical revenues. We also don‘t see a softening in rates for satellite TV rights in the near future as broadcasters have planned for their growth.

Our focus, though, will be on profitability. We are confident of posting a 20 per cent year-on-year bottom line growth for the next three years.

UTV Motion Pictures delisted from London‘s Alternative Investment Market. Is it now looking at raising funds for its movie business?

We are pretty much well funded and have no fund raising plan. The business has reached a self-generation mode.

Is the slate firmed up for the next fiscal as well?

We are sitting in a pretty position and expect to see strong growth in the next fiscal. We have only 3-4 titles to lock up. Our pre-planning is well in place. As a studio, we stand in a unique position as we are a producer and not a content aggregator.

Is UTV looking at aggressively producing movies in regional languages, particularly Tamil and Telugu?

We are keeping watch on how the regional play is emerging. But our focus will be totally on the Hindi slate. Strategically, Bollywood is our core business. We may do a one off movie in the regional space on a tactical basis.

In the south, the game is riskier and the ability to de-risk lower. The theatrical dependence is huge in the south. The sensibilities are also different.

In the revenue mix, how much does theatrical account for?

The box office accounts for 55 per cent of the revenue mix, while 20-25 per cent comes from sale of satellite TV rights. Music accounts for 5-7 per cent, overseas for 7-10 per cent; home video for 3-5 per cent and the remaining comes from new media. Going ahead, theatrical will fall to 50 per cent while new media will increase.

Piracy impacts our overseas home video revenues. We see that compensated over the years by the growth in the new media space. The launch of 3G in India will also augment our new media revenues.

Has there been a correction on the cost front?

Costs have fallen to a suitable level for the industry as a whole, but a lot more needs to be done.

UTV has expressed concern over the rise in marketing costs. How far has the industry come together on this issue?

There has been a 10-15 per cent increase in promotion and publicity expenses over last year. The industry spends around 50 per cent of the theatrical revenue for domestic marketing, if one calculates the net distributor share to each of the producers. Due to the competitive framework and the increase in media options, we tend to out-shout each other. We are advertising more than we need to.

A meeting took place among some film producers and everyone seems to be committed to see that this gets corrected as it is affecting our profit margins. It is work in progress and a solution, hopefully, should be on sight soon.

UTV has shied away from releasing films during the IPL Indian Premier League). Will you be more conscious to plan the movie releases in such a way that bumpiness does not happen from quarter to quarter?

UTV will have some releases during the IPL this time. While we are looking at ways to ensure that bumpiness does not take place, the right release date is our top priority.

Yash Raj Films is trying to create a segment for youth films. Do you think the industry has matured for a segmentation approach?

The first task is to find a great story. This may or may not include some target groups. But the secret to success is working on interesting scripts. Working backwards is not always the solution.

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