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Viacom18’s movie biz turns EBITDA positive; open to collaborate with top studios
MUMBAI: Viacom18 Motion Pictures, which was set up in 2010, turned EBITDA positive last year, its chief operating officer Ajit Andhare said, kicking off celebrations to mark five years of its existence.
Last year, Viacom18 produced ‘Margarita with a Straw’, ‘Manjhi, the Mountain Man’, ‘Pyar Ka Punchanama’, ‘Gabbar Is Back’, ‘Drishyam’ and ‘Dharamsankat’, which helped the company become EBITDA positive, Andhare said, refusing to discuss any figures.
“This year, we have ‘Budhia Singh’, ‘Force 2’, ‘Rangoon’, ‘Rahasya’, which we are developing as a franchise, and ‘The House Next Door’, which is a virtual reality based Hindi-Tamil bilingual movie. The biopic on Budhia Singh in Hindi will be released worldwide across the Indian diaspora market in the first week of August this year,” he said.
When it comes to regional movies, this year Viacom18 is producing ‘Dhoomketu’ (Bengali), ‘Photocopy’ (Marathi) and ‘Waras’ (Marathi).
“We will distribute ‘The Return of Xander Cage’ (starring Deepika Padukone), ‘Baywatch’ (starring Priyanka Chopra) and ‘Star Trek’, besides ‘Ben-Hur’, a new English movie. This is our plan for the next 18 months,” he said.
Movies in 2016-17
For Andhare, there is no question of competition because the movie production business is not about market share.
“YRF and Fox Star are not our competition because there is no market share battle. In fact, I think we should collaborate with them, as we did with Eros and T-Series in the past. As long as value creation is there, we would be happy to collaborate,” he said.
Talking about the challenges of the film production business, Andhare said, “It is largely a box-office business whose main challenges are cost of production, cost of talent and increasing marketing costs. There is a need to deploy a lot more media effort to market movies. Talent is scarce and its availability is a big constraint. Piracy is another big challenge as a result of which value capture is not happening, as piracy eats into box-office collections”.
Elaborating on the process of greenlighting the film production process, he said that the story as well as the script is analysed and evaluated from a marketing point of view.
“We have evolved a rating system to do this. We also get it evaluated by people who are not attached to Viacom. The script is shared with them. There are people who look at it in terms of screenplay theory. We evaluate whether or not it is a technically good script. That gives us a decent idea of whether to produce it. We’ve managed to do this effectively, but there is no foolproof method. We even do pre-testing of scripts with consumers,” he said.
Viacom18 has been involved in 80 movies and offers a diverse movie slate. Tracing Viacom18’s journey as a production house, Andhare said that when his company got into the business, movies like ‘Ghajini’ and ‘Welcome’ were the prominent movies.
“But we took a contrarian approach. We looked at what we could do differently and that has paid off in a big way. We have learnt to acknowledge the emergence of the new-age multiplex viewership. We believe in getting creative talent to collaborate in order to create value,” he said.
However, the go-to market function is also a challenge, since marketing has become very critical.
“We need to do 360-degree marketing. Sometimes, the amount recovered from small-budget films like ‘Margarita with a Straw’ are almost up to the level of box-office successes. The way a film is marketed is critical. For example, ‘Manjhi’ was not really entertainment in the real sense of the term. So we marketed it as an inspirational movie,” he said.
He said that another challenge is to monetise the content and manage risk.
“Satellite rights are important, while digital rights are an emerging revenue stream. Besides, a lot of what we produce is for captive consumption. There is a natural synergy,” he said.
Regarding the challenge of the star system, he said, “We are trying to move away from the traditional star system. We look at the marketability of the script. We prioritise content over the actor. Stars help to catapult a movie to viewership. Hindi movies have been dominated by male stars, but we have demonstrated that female stars are bankable as well,” he said.
Giving an example, he said that in ‘Tanu Weds Manu’ the female character Tanu was at the heart of the movie. In Kahaani, the script was the hero. The movie itself revolved around a woman. In Mary Kom, the ‘hero’ was a woman. This was also the case with ‘Queen’ and ‘Margarita with a Straw’.
“However, we did a number of other things to break the mould. In the movie ‘Oh My God’, we put god on a motorbike. We have shown people that we produce films of this sort. Cinepolis is now in a position to organise a film fest of only Viacom18 movies,” he said.
However, risk management remains a critical challenge in Bollywood because 70% of revenues still come from the box office.
“We have learnt a few things. For example, the timing of selling satellite rights is very important. We have figured out the right window period to sell satellite rights. We have also figured out the right time to do digital rights deals,” he said.
When asked if he would club digital and satellite rights, he said, “As a rights seller, I would like my rights to be priced well. Therefore, I will not club satellite rights with digital rights. We will sell them separately.”