Television

'PPC plans to pump in Rs 5 billion over three years' : Shailendra Singh - Percept Holdings joint MD

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These are busy times for Percept Holdings as it plans to build a strong growth engine in the entertainment space. The company has a war chest of Rs 5 billion and 17 movie projects are in pipeline. Talks are also on with Rupert Murdoch's estranged heir Lachlan Murdoch to sell 30-40 stake in Percept Picture Company.

Murdoch has already entered into a JV to form Percept Talent Management. Percept is also looking at scaling up its sports marketing business.

In an interview with Indiantelevision.com's Sibabrata Das and Ashwin Pinto, Percept Holdings joint MD Shailendra Singh elaborates on his ambition to become one of the top Bollywood studios in India.

Excerpts:

Percept has identified entertainment as an important growth engine. Inside entertainment, is it mainly movies?

In communications, the margins now are pretty tight and competitive. We will continue to give it due attention as it is our bread-and-butter. But we want to also build strong pillars in media and entertainment. We have done on ground events, live shows and celebrity endorsements for the last so many years. We realise that we now have to be aggressive in the movie space as we spot dynamic changes in the marketplace.

How much is Percept Picture Company (PPC) planning to invest in the venture?

We are planning to pump in Rs 5 billion over three years. We have already lined up 17 projects and our investment over the next one year will be in the region of Rs 2 billion.

Will Lachlan Murdoch pick up a stake to support PPC's growth plans ?

We are in talks to sell 30-40 per cent stake to Lachlan Murdoch. There is a strong possibility of an association as we share a strategic fit. We have already entered into a 50:50 joint venture with his company Illyria Pty Ltd (Australia) to launch a new initiative in the business of talent management. We believe Murdoch can provide a lot of strategic inputs. Historically, we have always been with partners for strategic rather than pure funding reasons.

What is the brand of movies that PPC will be making?

We make movies for all audiences and our ultimate goal is that in 2010 the consumer should identify our films as a PPC film. We want to catch everybody - from a six-year to a 60-year-old adult. That is because we make clean films. We have made a conscious effort that our films should not expose cleavages. India is a traditional society and we have to maintain our values.

Which is why you have made movies like Hanuman for the kids?

We have such a large kids population and yet we haven't put our focus on kids films. So we made Makdee. Hanuman has the drama, romance and climax to succeed - and it did! We are now making a sequel to Hanuman.

Our kids have been growing up on Disney and Hollywood. Is that fair? We have our own mythology, superheroes. PPC plans to come up with two animation films soon. Hanuman's sequel returns and will be released in November 2007. The second is an international film that will be released in summer 2008.

Have you locked up with different directors for multiple movies so that you can widen the slate of your offerings?

We created challenging cinema not just for the kids but also for the metro urban audience. We made MP3, Corporate. We have also touched rural viewers and made movies like Malaamaal Weekly. There is a lot of strategic thinking that goes into filmmaking and it comes from the long years that we have spent towards understanding the consumer. Our relationship with firms like Airtel and Hero Honda among others, have helped us achieve this.





Percept has been involved in 18 completed films that include Page 3, Corporate, Malamaal Weekly, Home Delivery, Traffic Signal and Hanuman. And the directors we have locked in for multiple movies include Nagesh Kukunoor, Priyadarshan and Madhur Bhandarkar. We lay a lot of focus on directors rather than on stars.

The perception in the industry is that you hijacked Sahara's movie business?

Not really. We made our first film eight years ago called Pyaar Mein Kabhie Kabhie with newcomers. Then we made a movie called Makdee. We made Phir Milenge independently and then gave it to Sahara. When we were involved in the management of running Sahara One, anything that we did on the content side we gave it to Sahara. Even today, we are keen to offer Sahara the rights to movies like Hanuman (sequel) and Malaamaal Weekly (sequel) if they want it.

But Sahara was left with no contracts with directors?

Madhur Bhandarkar came to us because he shared a comfortable relationship with us. That is how this industry works. Sahara One's movie business received a setback as they lost key people in the organisation to TV 18. And let me reinforce this again; we continue to enjoy a strong relationship with Sahara as an agency. They have been our client for over 13 years.

Do you stick your neck out and make the cinema you believe in?

There is a huge demand for quality and niche cinema. This is

risky, but it also helps build a brand. The advantage we have is that we also own P9, an in-house marketing company. And we are not shy of partnering with our competition at this stage. We, for instance, had Adlabs distribute a movie for us. We know that we are playing a tricky game but this is the only way we can produce 12-14 films a year. It is crucial that we are successful at this stage. The ultimate aim is to own the entire value chain.

Which is why you acquired Spiderman3 to spruce up your distribution?

We had been waiting for the right product to launch our distribution business; Spiderman3 was obviously the most appropriate. Initially we will be concentrating on Hollywood films as we believe that there is a huge untapped market for them in India but in due course we will start pursuing Bollywood film distribution as an independent business vertical.

The decision is completely demand driven. We believe that while all other aspects of cinema like production, marketing and even exhibition have seen radical changes in recent years, the distribution business continues to be as it was and we are confident that we will be able to make a big difference in this area. The unprecedented success of Spiderman3 is proof that effective distribution can really help create super success.

Currently we have allocated well over $10 million for infrastructure development and acquisition of content for Hollywood and Bollywood distribution. We will be targeting all big Hollywood releases in the year.

Are you getting into home video?

We will be launching our home video label by late 2007. It will include all our films but we will be pursuing others as well. We are developing our plans at the moment but there is a likelihood that this could be an acquisition or a joint venture.

The pricing today is competitive. We will keep our DVDs probably in the Rs 60 region. But our plan is to provide some value add; we will give more than a movie. And we are trying to provide a total solution. We recently bought two animation films and a South Indian film for a 360 degree distribution on all platforms. This shows that we have arrived as a brand. It is my dream that PPC will be that kind of a studio where people will see value in the knowledge that we carry as opposed to production details.

'Independent producers will not survive by making two films a year. Getting critical mass fast is the order of the day'

Are you planning to produce regional movies?

We are in the process of setting up a joint venture with one of South India's largest and most respected studios and that will give us an entry into the south Indian film industry which produces almost as many films as Bollywood.

Since Sahara contracted you to run their entertainment business for a particular period of time, hasn't this fuelled your ambition to get into the broadcasting space?

Owning a channel is not on the radar. It is a tough business and needs years before it can turn profitable. We want to make content for broadcasters and, if asked, help run a channel. We want to be experts at creating content for all platforms whether it is TV, mobile, cinema. We have just launched our mobile content division.

Is it fair to say that on the TV content side you haven't made much progress?

We were running Sahara One as management consultants.

In the process, we produced television shows and launched a television division for ourselves. Due to our selfish interests, we only focused on supplying content for Sahara One. This included Shobhaa De's chat and India's first live game show. We did six shows for Sahara One. We also outsourced to other production houses.

How has the experience with Sahara One helped you capitalize on the opportunity?

For us, it was like taking a diploma course at Harvard. Our first task was to build a broadcasting image which was upwardly mobile and young. We changed the name of the channel, its look and logo. We then had to create content that the consumers wanted. This was tough as the channel was carrying a hangover of the past of Sahara Manoranjan.

The second stage was to appropriately monetise the current library. We had to clean up several film contracts that were done before we took over. We had to do a lot of fire fighting.

After that, we began a new era. We brought into our basket several films like Page Three. Sahara only lost money on Home Delivery.

We also strategically launched Filmy and we created a unique space in a market where there was already a clutter of three other Hindi movie channels (Zee Cinema, Max, Star Gold with B4U not making much impact).

The common opinion is that Percept gained at the cost of Sahara?

The market cap of Sahara One has gone up after we took charge. Investors also came in.

How do you plan to make a mark in the TV content business?

We are getting back as far as TV content is concerned. The market thought that we are an in-house production company for Sahara. We had to change that perception. It took us some time to do that.

To go big we need to get into formats. In India, we think of big ideas and execute small. We are trying to create formats that we can produce here and then get it exported globally.

Do you see a studio system emerging?

Absolutely. You will have six top studios including Yash Raj Films, Adlabs, UTV and PPC. You need the muscle to play the game. Independent producers will not survive by making two films a year. Getting critical mass fast is the order of the day.

In the field of sports marketing, do you see any alternate emerging to cricket?

There is no true second sport challenging cricket. I am confident that the sponsors, media and fans will bring cricket back.

The issue is that when the World Cup debacle took place, people wondered if they should support other disciplines. Is putting all the eggs in one basket good for business? That thinking did happen. The BCCI should have had a chat with the sponsors to sort out the issues concerning the future of cricket.

With stars like Sachin, Saurav, Dravid and Kumble probably retiring at the same time, how will it affect money coming in from sponsors?

You create the next level. As brand marketers, that is what we do. You create Dhoni, Yuvraj Singh. The fans and marketers create the next level with the help of new talent that is seen as being cool.

When we thought that Shah Rukh was God, Hritik came into the picture. Clients need to have brand consultants who will tell them that there is an age and a time to position yourselves in a certain manner.

Are you looking at sports marketing for other sports?

We are looking at soccer and baseball. We have identified four corporates and we are talking to them about the benefits of being associated with these sports. It is a tough task as the federations do not want it. The facilities at the stadiums are awful.

Why baseball?

Baseball is about a ball and bat. It is an American sport and we have a hangover for all things American. It is a throw ball sport and anyone can do it. The challenge is to make it commercially successful. We have bought some rights. We are looking at a 10-15 year programme which is interesting. We can play baseball in existing cricket stadiums at night. Infrastructure is not an issue.

What are the expansion plans for Percept Talent Management (PTM) after Lachlan Murdoch has bought a stake in the company?

PTM is the talent management wing of Percept Holdings. PTM will identify, acquire raw talent, and give them the much needed professional edge required to catapult their career into the big league. PTM will ensure that they provide effective and efficient turnkey solutions to their talents. I see huge potential for this business going forward. We will leverage the great depth of talent resident in India and abroad through this partnership with Lachlan Murdoch.

How do you see yourself creating an entertainment empire? Will it rest on movie as the backbone?

Entertainment is not just Bollywood. Cricket and Bollywood are huge in India. But there is so much more happening with the advanced technology these days - gaming, mobiles, retail, exhibitions etc. We will look at various opportunities based on our consumer research and feedback and look to providing services at various touch points. For example, Percept Holdings plans to bring a unique Bollywood experience (cafe, rides, Bollywood tours, 3D gaming booth etc) for Indian filmbuffs. We'll offer a slice of what Brand Bollywood could be like in a 50,000-100,000 square feet area in Mumbai. We also have a separate vertical at PDM called PDM-Entertainment which will create and IPR new entertainment properties for clients.

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