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March of a media mogul
Abhilasha Ojha | October 07, 2006
Belvedere, in Delhi's Oberoi hotel, is unusually warm when we sit down to talk with Ronnie Screwvala, CEO, UTV. As my photographer and I settle down at a corner table overlooking the bright blue swimming pool, my eyes travel to the table where Screwvala's Vaio notebook and important documents rest.
These are fragments of Screwvala's success story: in 1990, he scripted the first draft of one of the biggest media and entertainment companies of India with a modest budget of Rs 37,500. Today, the market cap of the company is Rs 550 crore (Rs 5.5 billion) and it is moving towards becoming, as Screwvala puts it, "a major player in the media and entertainment segment".
The year 2006 certainly has been a crucial one for UTV. Rang De Basanti, the first important release from the house of UTV in January this year, became India's first major hit of 2006. The film has now been entered officially as India's nominee for the Oscars.
In July this year, UTV's channel for children, Hungama TV, was acquired by the Walt Disney Company for $30.5 million. What's more, Disney also bought an equity stake of 14.9 per cent in UTV Software Communications for $14 million.
Without taking a breather, the very next month, UTV inked co-production deals with Fox Searchlight and Will Smith's production company Overbrook Entertainment and Sony Pictures Entertainment to create and distribute films worldwide - making it the largest co-production deal out of South Asia worth $37 million.
The $14 million production, I Think I Love My Wife, starring Chris Rock, will be UTV Motion Pictures' second venture with Fox after Mira Nair's The Namesake. With Overbrook Entertainment and Sony, UTV has announced a $30 million co-production agreement for an action film in English and an animation film.
"Our model is very clear. We get 35 per cent of our business from international revenues. We understand the international market and we are in the process of building relationships with production companies who can market our films better there," says Screwvala.
The international companies in turn will make use of UTV's best production and technological skills that obviously have much lower costs.
Keeping this in mind, UTV has also set up a new 6,500 sq feet post production facility for feature films in Andheri. Called UTVPost, it will be the feature film extension of UTV's signature post-production studio USL.
With state-of-the-art technology from Arri, AutoDesk, Avid, FilmLight, HP, JVC and Sony, to name just a few, the facility is geared to handle the entire post-production chain including digital film recording for feature films.
UTVPost saw an investment of Rs 10 crore (Rs 100 million) last year while Rs 40 crore (Rs 400 million) has been pumped into the mega project over the last five years. Similarly, in the animation and gaming sector (another crucial vertical for the company), UTV has invested Rs 30 crore (Rs 300 million) in the past four years.
"There are four strong pillars of our company, namely movies, broadcasting, animation and gaming, and our exponential growth will come from these verticals alone," says Screwvala, adding, "In each of these verticals we will be looking at a Rs 1,000 crore (Rs 10 billion) revenue base."
Though he's tightlipped, rumours are abuzz that UTV will be looking at launching three major channels in the near future. "I can't say much, but certainly we will be looking at different segments in television content," he says.
UTV's run doesn't stop just here. It has been roped in as the overseas distributor for the release of Farhan Akhtar's much-anticipated film Don. "We have spent $1.5 million for the film's marketing alone," says Screwvala.
With nearly 350 prints ("one of the biggest prints to be released ever in the overseas market") for the overseas market ("the US alone will have 104 prints"), Screwvala will distribute the film all over the world except India.
"Thankfully, we are now being taken very seriously by multiplex chains all over the world, and interestingly, Indian movies offer higher per screen average revenue as compared to others in almost all parts of the world," he says.
Elaborating on the marketing strategies for Don, Screwvala says that it is advertising strongly in mainline media including newspapers, radio and television.
For starters, there will be a red carpet premiere in Leicester Square. In fact, with this film, UTV is all set to open newer territories like North America and Eastern Europe.
Screwvala also has reason to cheer, what with UTV being involved in what he calls "the first real crossover movie in the making". He says, "We worked with Mira (Nair) and in turn, took this exceptional film to Fox Searchlight."
He's confident of The Namesake's success that, according to him, targets international audiences, and will be released in India sometime in March 2007. In addition UTV has nearly 12-15 heavyweight Indian films that will go on the floors to release between 2007-08.
An article on UTV, published recently in the Financial Times, suggested that "UTV's multiple global tie-ups are the most evolved among India's new media groups". Screwvala reacts, "I'd like to think of this as a circle of life.
In 1995, the first major foreign investment in India in media was made when News Corp acquired Star and bought an equity in UTV. Ten years later, we've evolved to stay at the helm. When everyone else is looking at private equity, we have moved away from private equity and moved to strategic alliances."
But what according to him was the turning point for UTV? "I have to admit that our TV content story with Hungama TV was a major success. We were able to steal a march over others because of localisation of content, localised marketing and hosting ground events with regularity."
But he does admit to committing hazardous blunders, the most obvious one being "sub-selling" of some of his earlier films. He says, "That's a lesson I've learnt well. If we make content, then sub-selling it makes no sense.
Even in the case of Rang De Basanti, we sold it off in the Delhi territory and it was a nightmare. We have three criminal cases filed against this particular company now after he used to inform us shamelessly that his company had made profits worth Rs 1.5 crore (Rs 15 million) from Rang De Basanti but was not ready to give us our righful share."
He admits that the company was also serious about venturing into multiplexes. "After a week we gave up. It is nothing but a real estate and popcorn business and we didn't want to dip our resources there," he says.
Screwvala feels that a major part of UTV's success also lies in the fact that they work with multifaceted directors. "From Vishal Bharadwaj to Ashutosh Gowarikar, we work repeatedly with them. Ten years ago we were looking at an industry that was nascent or fragmented, but even then we were clear we wanted complete control over the scripts and marketing of films. That helped us attain a fair degree of success."
Considering the stakes are so high, Screwvala says he rarely gets nervous. He attributes this to the early days when he was actively involved in English theatre."It was a hobby, it gave me self confidence, a sense of focus, the ability to innovate and think on my feet." He regrets that he hasn't got enough time to pursue theatre but is waiting for a good script to come his way. "I used to enjoy watching films earlier, but now it's become part of my work."