Disney will go to Bollywood soon

Rajat Jain, managing director of World Disney Company (India) Pvt Ltd, has big plans to build the Disney brand in India. The acquisition of Hungama TV and a strategic stake in UTV is only the beginning. Excerpts from Jain's conversation with Tamal Bandyopadhyay & Shriya Bubna:

Is your acquisition of Hungama TV and the 14.9 per cent stake in UTV a one-off deal?

In 2004 we started with two channels - Disney Channel and Toon Disney. India is a long-term strategic priority for the Walt Disney company. We are into other businesses such as merchandising, licensing, film making and publishing. Our objective is to build the Disney brand and characters as opposed to, say, four acquisitions or three buy-outs. If in that space, something is relevant and making sense like Hungama did, then we will look into it.

So we'll see more such acquisitions?

Not necessarily. Today the reality is that everybody might be looking at acquiring, but who is looking at selling? Our route to growth is a combination of organic and inorganic growth. Acquisitions to me is accelerating the pace of growth, it is not the means of growth.

How much capital do you plan to allocate for India business?

There is no India-dedicated capital allocation but there is an India-dedicated strategy. To achieve this, we will bring in to this country capital from outside and also generate (capital) from the existing businesses.

How big are the India operations?

Over the past two years, this business has been growing at a significant rate - doubling or tripling. We started on a small base though. The global business is about $32 billion. Our vision is to become the leader in the business of kids and family entertainment.

Disney is among the world's top brands and that is the position it should eventually attain in India. That can take two years, five years or 10 years.

Where do you stand in the TV space?

In the kids segment, our market share for the past four weeks was about 30 per cent. Hungama's share has been around 18-19 per cent in the same time period. So, together, in the kids business, we have about 50 per cent market share. We are particularly strong in the south because of the local language of Tamil and Telugu in Toon Disney. There our share is about 60 per cent.

Globally, the television business accounts for about 30 per cent of Disney's revenue. What's your India mix?

Right now television accounts for about 80-90 per cent of our business in India. It is not just a business but an engine to drive the other businesses. In the business cycle, TV will obviously start with 95 per cent and over a period of time move to 50 per cent.

Are you excluding theme parks from your India strategy?

No, I am not excluding theme parks but I am not including them either. There is no such plan at this point in time in India.

What is this rest of the business?

We are heavily into consumer products such as FMCG, food, health and beauty, toys. The whole business of what we call hardlines, which is electronics and hard products and softlines like apparel, bedsheets, pillows.

The business here is to license our characters to industries such as these. We have recently done a deal with Nerolac Paints in January. The kids and families can have a wall in their bedroom painted in Disney style - a Mickey, Minnie, whatever. Disney Jeans is another example.

We have about 55-60 licencees in India, besides retail relationships with Pantaloon, Shoppers' Stop, Landmark, Crossword, Lifestyle and so on, where you will see a Disney corner.

With the TV impact coming in, we have 24- hour advertising and it serves to bring your consumer closer to your character. Basically we will have to ride on the organised retail boom. Traditionally, around the world retail has been the biggest driver of Disney kind of consumer products.

What about the new media?

We are not a company that owns distribution platforms; we are the creators of high-quality compelling content. We are not necessarily looking at TV all the time. We have deals with both Airtel and Reliance. All their customers can access something called Disney Zone and download wallpapers, ring tones on their phones.

Any deal with Mukesh Ambani's retail venture for your merchandise?

Whenever he comes, we will be there. Disney has global relations with most mega retailers - Tesco, Wallmart. That will get leveraged. At the local level, we are in conversations with Reliance, Pantaloon, DLF - all companies which are into big plans.

What about films?

Disney is, perhaps, amongst the second or third biggest Hollywood studios in terms of making films. We will bring all the Disney movies that are released in Hollywood into India in English and other local languages. If we want to make a Bollywood movie, UTV automatically becomes a potential partner. The UTV model is similar to what we have built for the Walt Disney company globally.

Will you raise your stake in UTV?

There is no cap....We have just started and it is too early to say.

How soon shall we see a Bollywood film made by Disney?

It's a matter of time but not in the too distant future. Our intention is to make Disney-branded clean family movies for the entertainment of the local Indian market.

But we have to first make sure that it works for the Indian audience, then this will go to the Indian audience around the world.

If we make two to three movies in the next three or four years, I think it is a good beginning. We have recently hired P S Shyam, the executive director for Rakesh Mehra's Rang de Basanti. He is head of studio production in India and currently looking at scripts, ideas.