'While multiplexes will grow our existing business, local movies will allow us to progress faster' : Uday Singh - Sony Pictures Releasing of India managing director

Hollywood film distribution companies have found the going tough in India, a market which has stood firm on local tastes and preferences. Rupert Murdoch's 20th Century Fox, in fact, has indicated it is closing down its Indian operations. But Sony Pictures Releasing of India Ltd (earlier Columbia TriStar Films of India) has grown from a moribund organisation in the 1990s to reach a turnover of Rs 1 billion last year.

In an interview with's Sibabrata Das and Bijoy A K, Sony Pictures Releasing of India managing director Uday Singh explains how it is important to read the market right and de-risk the film distribution business while aiming at faster growth. Excerpts.

Growth will come from multiplexes and distribution of local movies.

Is film distribution turning out to be a risky business as is evident from indications of 20th Century Fox closing down operations in India?

That is an unfortunate development, if what we hear is true. Film distribution definitely is an unpredictable business and we have to walk the razor's edge. We can't overspend in promoting the movie, expecting it to earn more than its potential. Nor can you spend less, if the movie has the potential to earn more. If you read the market wrong, you can die in this business.

How do you ensure that you read the market right?

De-risking can happen at the exhibitor level. It is important to have a 'grassroots model' to understand and estimate the market. You will have to have your own distribution available at the retail end. Otherwise the tail will wag the dog.

Have you de-risked the model by not acquiring local movies for distribution?

We distribute products for a fee in what is popularly called as the `Rental Distribution System.' But it is not that we have not tried to play the acquisition game. The problem is that once we step into negotiations, the market comes to know of it and the producer gets exorbitant offers from other distributors. The price just shoots up because a multinational company has shown interest in a particular movie. We do not want to get into bidding wars.

How then do you see top line growth?

Our business is largely driven by the product lineup we have for the year. Typically, 2-3 movies account for the bulk of the revenues. We distributed 33 movies last year, but got 57 per cent of our revenues from just two movies. Spider-man II fetched us Rs 350 million while Anaconda grossed Rs 220 million. Our turnover for the year was Rs 1 billion, up from Rs 830 million in 2003.

But you had touched Rs 1.10 billion in 2002. Isn't growth plateauing?

We expect growth to come from multiplexes, increasing participation, and local distribution of movies. While multiplexes will grow our existing business, local movies will allow us to progress faster.

'SET India wanted us to distribute 'Pyar Kiya Nahin Jata'. We were evaluating it, but realized it didn't have great potential'

With Sony acquiring MGM, do you think you will be in a position to take higher risks on local products as you will have an assured supply from the three big Hollywood studios (Sony, Disney and MGM)?

It will be fantastic to distribute the James Bond and Pink Panther movies. But it will be a challenge as well. Other than the Bond movies, MGM has not done anything extraordinary in India. But we will have to see how it works out. We don't know what will happen to the contract 20th Century Fox has with MGM. Moreover, we hear Fox is winding up operations in India. Things have to be clear before I can make any statements on such issues.

Does the turnover reflect on your profits?

In the overall box office earnings, India stands in the 15th-17th position in the world. Earlier, India used to be the 44th largest revenue contributor for us. But in terms of profit earnings, India compares poorly because of high tax structures.

How is the Indian market different from the US?

India is a much more diverse market and there is a very strong preference for local products. In fact, we look at four different products when we dub our English movies here into Hindi, Tamil and Telugu. We are not allowed to dub in Kannada and Bengali languages. We tried Malayalam language a few times, but gave up. There is a strong resistance against dubbed products in Kerala. Besides, in India there is no middle market. You either make it big or there is very little money to be made out of distributing a movie.

How do you cushion against the risks then?

We frontload our closures. There is a very short period in which you have to make money from your releases and get out. For Spider-man II, we had 327 prints. The way in which you distribute movies has changed today.

Has it become more difficult?

The media has become much more fragmented. It has become extremely complicated and much more expensive to launch a movie. The costs are going up, but revenues are not jumping as much. We have to face with the reality today that eyeballs are being distributed across TV, home video and a slew of movies that get launched frequently.

Why have you slowed down the distribution of regional films?

We do regional movies occasionally. We did a Bengali film, but even in that market we are seeing today big budget films. Also, distributors have become producers. And there is a definite divide between urban and upcountry audiences. Distribution of regional movies is not a focus area. We primarily try to get Bollywood movies in addition to the international lineup that we have.

Sony has a television channel, runs a music business and has a film distribution network in India. Why haven't you acquired movies to complete a value chain drive?

Our TV channel and Sony Music are acquiring movies. Acquisition for theatrical release is the most difficult act in the business. We haven't got into that act yet because of the high costs involved. But we have worked in synergy. When we had to release Spider-man II, Sony Music launched an album while Sony Ericsson introduced a specific handset. Sony TV had the Spider-man sitting on the logo of the channel for a month.

Why didn't you distribute a movie produced by Sony Entertainment Television?

SET India wanted us to distribute Pyar Kiya Nahin Jata. We were evaluating it, but realized it didn't have great potential. That doesn't mean we are not working in synergy. If we acquire movies, we will also keep satellite telecast rights which SET can exploit.

SPRIL has not got into movie production despite getting FIPB (Foreign Investment Promotion Board) clearance. Why?

The film industry needs to get more organised. Banks do not get into the actual production process but do just last mile funding. Unless all these issues are sorted out we don't want to get into film production. But our intent is there. We have to sort out when and how. We have not even gone into the acquisition game yet.

How are you tackling the issue of under-reporting in ticket sales from cinema exhibitors?

We have knowledge of the centres where underreporting is the maximum. There is very little you can do. We take a fixed amount from them. The situation though is improving in urban centres and with multiplexes coming in. But we can't bulletproof the system. It is like policing the police.

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