Television

'Scaling up through film acquisitions is a risky model' : Mahesh Ramanathan- Big Pictures COO

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Rock On! was only the beginning. After going on to create a new set of cult audience with their first co-production, Reliance ADAG's Big Pictures is bullish on its 18-movie slate for 2009.

On the distribution front, Big Pictures rode on the success of Ghajini at the fag end of 2008 to get a slice of the overseas business with Rs 390 million. The challenge this year is to step up the film production and distribution business.

In an interview with Indiantelevision.com's Anindita Sarkar & Gaurav Laghate, Big Pictures COO Mahesh Ramanathan talks about the company?s production plans and the revenue scope that the film business offers as different studios scale up.

Excerpts:

Big Pictures had made a grandiose announcement of producing 18 movies in 2009. But with the economy slowing down, is there a revised plan?

With the Indian film industry growing at a CAGR of 17 per cent, which is almost double the GDP growth rate, box office definitely remains unaffected. Though there is a slowdown in the economy, that definitely does not lead to any de-growth in demand. If the content remains right, there can't be any downturn in consumer sentiments when it comes to movies.

Having the financial muscle of Reliance ADAG, why has Big Pictures gone in for six Bollywood co-productions out of this roster of 18?

Co-production deals for us actually bring in a perfect marriage between creativity and commercial acumen. While we bring in certain virtues like financing, marketing, promotion and distribution of content through our various platforms (online, home video, mobile, DTH), the director still calls the shots. However, he has to align his creativity with us to bring in the viability for the product for commercial exploitation.

You will also be producing seven regional films this year. What kind of potential do you see in the regional film space?

The regional film space currently accounts for 50 per cent of the Indian film market and is growing. While there is a huge appetite for Bengali films, the Southern region is definitely a huge market to tap. Marathi film industry is also revamping. So the potential to commercially exploit these markets remains huge.

Any plans of entering the Bhojpuri market?

We don't plan to step into the Bhojpuri market as of now as there are huge distribution challenges.

Recently, we have seen a lot of small and mid budget films raking in good numbers at the box office which also includes your first Hindi production Rock On. Do you plan to create more small budget movies?

Our business model is not based on budgets. While we do have a few low budget films like Sikander and Chaloo lined up for 2009, we will begin the year with our big budget Luck By Chance. Budget is purely a derived figure based on the demands of the script. Our approach is more towards building a portfolio across a variety of genres that include small, medium and mid-budget movies.

'Our business model is not based on budgets. Our approach is more towards building a portfolio across a variety of genres that include small, medium and mid-budget movies'
 

Year 2008 was a year of film acquisitions for some major studios. Why did you decide to stay away from it?

Scaling up through film acquisitions remains a very risky model. When you are acquiring a film, there is a lot of producer profit that is built in which jacks up the price. Our business model focuses on creating original content. Not only can you keep your costs low but also ensure that the viability of the film remains secured.

If you are into acquiring of films, you are entitled to exploit the product only for a stipulated time period. This is not the same case with content creation. Original content helps you build your own catalogue and once the catalogue is built you can use it to create more revenue streams.

What role does marketing and promotion play in increasing a film's occupancy in theatres and multiplexes?

Huge! Take Ghajini for example. The pre-release marketing and promotional activities for the film induced extreme interests amongst audiences and as a result Ghajini witnessed almost 100 per cent occupancy in its first week at theatres. The marketing activities that we did across 40 territories overseas also helped us generate a lot of eyeballs. So marketing is definitely very important to tap the right audiences.

How difficult is it to tap the right set of audiences?

Because of media fragmentation, it is becoming very difficult to reach the right set of audiences and engage them. Today, you cannot pin your hopes onto only the press and television. You have to have a 360 degree approach and mass customise your communication to audiences - and this is where we score. We have a presence across almost all media and entertainment platforms - be it radio, home video, online, mobile, social network etc. Thus, synergising all these platforms helps market and promote our films in a much focused way. It is also very cost effective.

How do you strategise your film marketing activities in the international space?

Unlike India, it is more of micro-marketing in the overseas market where you target the diaspora. Hence, the choice of media vehicles is more local there. You have to be aware of the local newspapers and have to have a local expertise and channelise them smartly.

Though in terms of value the Indian film industry is only 2 per cent of the entire global box office, it is generating interests across international studios. Why?

When it comes to the number of films produced in a year, we are definitely the largest in the world. India produces over 1000 films a year. We are also the largest box office in the world with 3.5 billion admissions a year. While Hindi films account for approximately Rs 50 billion, a similar amount is generated from regional movies. So it's definitely an attractive market for international studios that have long term plans in this country.

When it comes to value, our box office stands at only 2 per cent of the global box office. But that is because our collections are still dependent a lot on single screens where ticket rates are really low. However, with the establishment of 3700-3800 multiplex screens in the next five years, we will see a lot of value being added to the box office.

How much of the revenue generation potential of a film is inflicted by piracy?

Between theatrical, home video and cable, it is estimated that the overall piracy eats away almost 80 per cent of the film's entire revenue potential.

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