new storyline - value research · wohi sikander, baazigar, rangeela, lagaan, chalte chalte,...

CMYK

CMYK

Call it the art of impossible The Bollywood has arrived! From

the first talkie Alam Ara to the sci-fithrillers like Krissh andTarzan -The wonder car toemotional flicks like Black to

hi-end animation featureHanuman to what not,the movie experienceof the Indians is notsame any more as itused to be decadesago.

No long queues,

no black marketing of tickets, nouncertainty whether you would getinside the hall, no stereotyped movieswith heroes running around the trees.Films are having out-of-the-boxthemes and are being concludedwithout cost overruns.

From new concept movies beingmade to delivering tickets at the

doorstep of the consumer,

the largest film industry in the worldhas gone in for a complete makeover.

How has the industry been able torefine its act after takes and retakesover the decades?

Bollywood has been able to widenits canvass with the arclights ofleading corporate houses falling on it.Not only the corporate houses aredeveloping a liking for the cinema,the producers and directors are alsoputting their act together and gettingorganised by the day.

Call it a GMP (good manufacturingpractice) or attribute any managementterm but the fact remains that a newgenre has emerged that isprofessional and demanding, and useconcepts like the CPM (critical pathmethod) and PERT (projectevaluation review technique).

Cut to the recent box office hits likeKrissh, Rang De Basanti, Fanaah,Phir Hera Pheri, Lagay Raho MunnaBhai, Omkara, Kabhi Alvida NaaKehna etc. Quality content, apartfrom slick marketing is also onereason for the runaway successes ofthese films. For example, the year'sbiggest grosser Krissh, which hasalready made Rs 100 crore and stillcounting, had set aside Rs 10 croreon publicity. Producer RakeshRoshan had tie-ups with SingaporeTourism Board and Pantaloon forpromoting the film. Some other bigbrands are also associatingthemselves with the movies. ForKabhi Alvida Naa Kehna, LVMH and

October 2006 Wealth Insight 20

160

120

80

22 Sep �05 22 Jan �06 22 May �06 25 Sep �06

Adlabs Films

PVR

UTV SoftwareMukta Arts

ShringarCinemas

Inox Leisure

Lights, Actio

n!

Stock Performance

(rebased to 100)

COVER STORY

New Storyline

Nike gave free products and Airtel paidfor some TV spots. Another example isRang De Basanti for which UTV hadinked pact with Provogue, BergerPaints, LG and Club HP. The partnersspent around Rs 4.5 crore onmarketing the film. So it will benefitmultiplexes significantly.

Over half a dozen successes in thefirst half of the financial year andincreasing mall culture in tier-II citiesare expected to give the multiplexchains like Adlabs, PVR, Inox etchandsome returns. Most of the chains

have drawn upexpansion plansand will increase theircapacity by almost 200 per cent by2008. As some companies are also intobusinesses other than film exhibition,the integrated players will see a surge intheir top line and bottom line. Thegrowth has also been fuelled by easieraccess to capital.

We have got you the sneak preview ofsome premier Bollywood companies.Read on the behind-the-scene activitiesto find out

If the cineplexes and multiplexes have acquired the cult status in India, then the cred-

it goes to the PVR. The company, which gave the country its first multiplex in 1997, is

the largest cinema exhibition player in the country. The company opened India's

biggest multiplex in Bangalore, built over 1,20,000 sq ft with 11 screens

and a seating capacity for 2019 people. The company also pio-

neered the concept of luxury viewing with facilities like plush

and fully reclining seats etc. It was the first company to

receive institutional funding in the cinema industry from

ICICI Venture (India Advantage Fund invested Rs 38 crore).

It was PVR again which introduced

the concept of computerised and

online ticketing. The company also

brings out a monthly magazine Movies First on the latest

happenings and developments in Hollywood as well as

Bollywood.

PVR has forayed into film distribution business through its

arm PVR Pictures. The latter has tied up with Ram Gopal Verma-

owned Factory for the distribution business. The new venture, PVR Factory, operates

under the PVR Pictures entity and has exclusive distribution rights for Delhi, Uttar

Pradesh and Uttaranchal. PVR recently entered into an agreement with Amir Khan

Productions for producing movies. .

The company has drawn up ambitious plans to come up with 250 screens in a couple

of years. As many as 8.8 million moviegoers visited various PVR cinemas in 2005-06.

PVR


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COVER STORY

Net Sales (Rs cr)

FY 06

FY 05

*Net of non-recurring transactions

** Return on Net Worth

RONW (%)**

103 5.7 4.7

69 4.0 9.6

FRONT ROW PLAYERPVR is the largest exhibition player in India

As many as 8.8 million people saw moviesat PVR multiplexes in 2005-06

First company to receive institutionalfunding in cinema industry

PAT (Rs cr)*


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The Ronnie Screwvala-led UTV is one of the most dynamic integrated media players in the

industry. It operates in the entire value chain from producing and distributing movies, cre-

ating content for television channels to dubbing and broadcasting. Its television content

division is one of the largest in India. The division, apart from providing fic-

tional content to various entertainment channels, provides solutions to lead-

ing international players with non-fiction shows. The company entered into

animation business in 1997 and since then there is no looking back for it. UTV Toons is

India's largest animation studio and with over 600 titles under its belt. UTV is also into air-

time sales i.e sells advertising commercials on various channels. UTV has also distributed

the biggest of the Bollywood flicks including Lagan, Sarfarosh, Asoka, Swades, Mughal-E-

Azam, Parineeta, Viruddh, Bluffmaster etc. The strength of its distribution business can

be gauged from the fact that its movies reach 13,500 screens in India and 47,300 screens

overseas. The group also owns popular kids channel Hungama TV.

UTV

COVER STORY

SCREEN PRESENCE UTV's television content division is one of the largest in India

UTV Toons is India’s largest animationstudio possessing over 600 titles

Company is very strong in distributionbusiness. Its movies reach 13,500 screensin India and 47,300 screens overseas

Net Sales (Rs cr)

FY 06

FY 05



RONW (%)**

173 0.9 0.7

154 13.4 14.5

PAT (Rs cr)*

BOX OFFICE BOMB Piracy remains the biggest

bane of the Indian film

industry. According to one

estimate, 85 per cent of all

successful Bollywood flicks

are pirated in Pakistan. Amir

Khan-Kajol starer Fanaa is

believed to be the mostpirated movie ever. Over20 crore pirated DVDs and

VCDs are sold in India every

year.

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COVER STORY

Shringar is an integrated film exhibition and distribution company.

The company, which started operations in the 50s for financing

Bolloywood flicks, has gone from strength to strength. By 1990s the

group had established itself as leading distributor. The group has

three companies under its fold: Shringar Cinemas, Shringar Films

and Swanston Multiplex Cinemas.

Shringar Cinema provides theatre management services and pro-

gramming model for content selection to the theatre owners.

Shringar Films handles the film distribution business and has

movies like Qayamat Se Qayamat Tak, Raja Hindustani, Jo Jeeta

Wohi Sikander, Baazigar, Rangeela, Lagaan, Chalte Chalte,

Munnabhai MBBS etc under its belt. Shringar Films plans to adopt

'own the content' strategy for its distribution business. Swanston

Multiplex manages the programming and operations of Fame

Adlabs at Versova in Mumbai. The group is also planning to diversi-

fy into food business under the Via 1 Food Street brand name. In 2001

India Value Fund invested in Shringar to fund the latter's expansion.

The fund later on sold 31.56 lakh shares to Temasek Holdings at Rs

62.50 in 2005.

SHRINGAR GROUP


Net Sales (Rs cr)

FY 06

FY 05

(Figures for Shringar Cinemas)



RONW (%)**

29 -4.9 -13.5

8 -5.3 -24.4

PAT (Rs cr)*CINEMA SCOPE Apart from distribution and production,Shringar also provides theatremanagement services

Shringar Group also planning todiversify into food business

Investment player Temasek holdssome stake in the company

BIG- TICKETFLICKS

Kabhi Alvida Naa Kehna

Rs 50 crore

Krrish

Rs 40 crore

Don

Rs 40 crore

Jaaneman

Rs 40 crore

Omkara

Rs 25 crore

Inox is one of the most profitable chains of mul-

tiplexes in the country. The company has

embarked on an aggressive rollout of multiplexes

across the country. With 11 multiplexes in

10 cities including Mumbai, Pune,

Vadodara, Goa and Kolkata, the company

now has Hyderabad, Chennai, Jodhpur, Lucknow,

Raipur, Kolkata and Bangalore on its radar. In

Kolkata, though the company has two multiplex-

es, it has tied up with local player to widen its can-

vas. The company opened its screen in Darjeeling

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COVER STORY

Subash Ghai-promoted Mukta Arts is one of the oldest organised players

in the industry. The company, which started 28 years ago, is into genera-

tion and distribution of contents for the entertainment industry.

Perhaps it is the Mukta Arts, which has produced the most num-

ber of commercial hit films like Karz, Hero, Karma, Ram Lakhan,

Saaudagar, Khalnayak, Pardes, Taal etc. The company's experiment with new genre films

like Jogger's Park and Iqbal also proved to be very successful. The company's films have good

archival value, ensuring steady flow of revenues.

Exhibition and distribution business contributed 50% of revenues during 2005-06.

The company also sees opportunity in animation, special effects, gaming, mobile content

and media education. Though the company had

offers for television programming, it did not

take a call since it believes that it does not have

the wherewithal in this area.

The latest and the most prestigious project for

the company was the opening up of Whistling

Woods Institute for Film, Television and Media

Arts (WWI) to train people on all aspects of film

making. The institute is also the officially certi-

fied training partner in India for Apple and

Digidesign, offering certification courses in

Final Cut Pro, Shake, Logic and Pro Tools.

MUKTA ARTS


Net Sales (Rs cr)

FY 06

FY 05

*Net of non-recurring transactions ** Return on Net Worth

RONW (%)**

40 -5.6 -5.2

48 -17.0 -14.2

PAT (Rs cr)* NEW ACT Mukta Arts has produced themaximum commercial hit films

Mukta Arts-promoted WhistlingWoods Institute trains peopleon all aspects of film making

INOX

Net Sales (Rs cr)

FY 06

FY 05


RONW (%)**

102 17.5 -

59 7.2 13.9

PAT (Rs cr)HOUSEFULInox one of the most profitable chains of multiplexes in the country

Inox plans to double screen count to 98 in 16 cities in two years

Ties up with Pantaloon for pan-India presence

COVER STORY

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Adlabs, set up in 1978, started out as film pro-

cessing company catering to the ad film mar-

ket. The company today is a formidable inte-

grated player in the media industry. The com-

pany covers entire value chain from film pro-

duction & processing to distribution, exhibi-

tion & FM radio.

The company entered the

film exhibition business in

2000 when it set up a 518-seat IMAX Dome the-

atre and Mumbai's first multiplex. It entered

into film production business in 2002 through

its subsidiary Entertainment One India. It

also signed a deal with Synergy

Communications to acquire controlling stake

in the latter.

Additionally it entered into financing and co-production pact with Hyde Park

Entertainment Group, to mark entry into Hollywood.

The film processing division has met with the standards of the prestigious Kodak

Imagecare Programme for negative processing. With this feat, the company ahs entered

into the elite club of top-end processing labs in the world. Margins from the theatre

business continue to rank among the best in the country.

Recently the company has shown its intent to cater to the budget audiences by devel-

oping low-cost cinemas. In 2005-06, of the five films it produced, four were declared hits.

The company is also credited with introducing the concept of digital distribution.

For this purpose the company has signed a pact with Mukta Arts. Adlabs Films Limited

sold 50.15% stake to Reliance Anil Dhirubhai Ambani Group (R-ADAG) for Rs 360 crore.

This is in line with ADAG's plan to diversify into entertainment value chain from tele-

vision to radio and DTH.

ADLABS


Net Sales (Rs cr)

FY 06

FY 05

*Net of non-recurring transactions ** Return on Net Worth

RONW (%)**

106 21.6 9.5

86 20.6 18.7

PAT (Rs cr)* ACTION PACKEDAdlabs operates in entire value chain from film production &processing to distribution, exhibition & FM radio

Margins from theatre business among the best in the country

Co ties up with Park Entertainment to mark entry into Hollywood

Co planning to enter into DTH business in a big way

in April and in Kota in June, taking

its total count to 41 screens. The

company plans to almost double its

screen count to 98, across 23 multi-

plexes in 16 cities in two years.

The company has also tied up with

Kishore Biyani's Pantaloon group to

make a pan India presence.

new storyline - value research · wohi sikander, baazigar, rangeela, lagaan, chalte chalte,...

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