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Economic Times Coverage -The Really Big Picture - May 1, 2010

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Scale comes naturally to Ambani Junior and his crack team
at Reliance MediaWorks. Their strategy is to build
a company that will dominate the global
film and media services’ value chain. While searing growth
has pulled down profits and increased the debt burden in
the past two years, the company is confident of making
it to the big league,
reports Nandini Raghavendra

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Economic Times Coverage -The Really Big Picture - May 1, 2010

  1. 1. 14 BUSINESS OF BOLLYWOOD * THE ECONOMIC TIMES ON SATURDAY MUMBAI 1 MAY 2010The Really BIG Picture Scale comes naturally to Ambani Junior and his crack team CLASSIC TAKE at Reliance MediaWorks. Their strategy is to build a company that will dominate the global film and media services’ value chain. While searing growth has pulled down profits and increased the debt burden in the past two years, the company is confident of making it to the big league, I am hopeful that my father reports Nandini Raghavendra will be able to attend the Cannes festival in person. I T HERE was a huge surprise in store for Amitabh Bachchan, Abhishek, Aish- SPANKING NEW warya, Shahrukh Khan, Hrithik and al- loved Kandahar because it Defects that can be removed through film restoration: Dirt, most all of Bollywood who attended Anil and Tina Ambani’s party last month at the was so different from dust, scratches, flicker, stabilisation, fungus, tears (digs, roller marks), emulsion cracking, image fading, color breathing, Grand Hyatt — the guest list for that night includ- ed Steven Spielberg, Nicolas Cage and Julia everything else my father had splice bumps, frame warps, water damage, chemical stains, Roberts among other Hollywood hotties. The Cine Diner: A one of its kind, thirty -seater multiplex in Mumbai. Part of the 519 Big Cinema made in the past. It was noise & grain build-up only difference was none of them really got to screens across India, US, Malaysia, Netherlands and Nepal ‘rub’ shoulders with their Western peers, because understated but intense COST OF RESTORING A MOVIE though Cage and Roberts joined Bachchan and when Anil Ambani acquired 50% in none other has handled handled projects for leading studios his colleagues in “wishing Anil and Tina all the than Steven Spielberg’s Dreamworks and also like Walt Disney, Paramount Pictures, MGM and KUNAL SEN Domestic costs range from Rs 5 lakh-35 lakh depending best” they could only convey their wishes via au- struck a series of deals with stars including Holly- 20th Century Fox and entertainment leaders MRINAL SEN’S SON on length and quality sought dio visuals played out on big screens. Hollywood wood stars Brad Pitt, Jim Carrey, Julia Roberts like George Lucas, Steven Spielberg and James International high-end projects for clients like and Bollywood, two of the globe’s biggest film in- and George Clooney for a first look at developing Cameron, will work closely with Imagica in Disney range from Rs 50 lakh to Rs 3 crore, dustries sharing one stage, popping champagne their company’s films. Japan which has restored parts of Akira Kuro- ($100,000 to $ 600,000) together — it definitely doesn’t get bigger than On the other hand, Adlabs, Shetty’s blue- sawa’s Rashoman. this in the world of cinema. chip company had stood solid on its lab and pro- “Our foreign acquisitions and tie-ups have GLOBAL RESTORATION COMPANIES The seeds of the success were sown five years cessing business as well as some contribution been good contributors and we see this at 20- ago, when Anil Ambani bought a controlling coming from the multiplex boom he pioneered 25% of revenues,” adds Arjun. World reknowned restoration facilities: Lowry, Deluxe, stake (66%) in Manmohan Shetty’s blue-chip in Mumbai. Ready the revenue pie today and you see, that Technicolor, Ascent, Imagica company, Adlabs. He shelled out big money— In five years, Adlabs has metamorphosed into the labs business which made up for 80% of rev- Rs 366 crore — unheard of in the Indian enter- Reliance Mediaworks, (RMW) and the only enue in ’05, constitutes only 12% today, the ex- WORK IN PROGRESS tainment business till then. The aim was clearly thing Shetty (who still has a 4.7% share in the hibition business. which was 20% in ’05, is today Lowry is restoring Disney’s Fantasia & Alice In Wonderland global and to gain a firm foothold across all verti- company) would find familiar at his office in a 55% contributor with the 519 screens spread (1951) cals of this business while being language agnos- Film City is the ‘Adlabs’ name embroidered into across India, US, Malaysia, Netherlands and tic. Scale was important as was speed, so Re- each red covered seat of the mini theatre at the Nepal. “In fact, I see a growth potential for the World Cinema Foundation (started by Martin Scorsese) liance Big Entertainment would do films, music, lab. Nothing else is the same. exhibition industry of 8-10% and for plex busi- and NFAI are restoring Mrinal Sen’s films which have radio (since last year), digital, gaming, home To begin with RMW, no longer makes films, ness including us of 12-15%. As cinema advetis- been damaged due to bad storage conditions video and home rentals, while the rest was all though it does hold the IPRs of several films. ing gains mometum, as in other mature markets, Adlabs business. The scale to this business came From a Rs 98 crore turnover the margins will see sharper Cannes Classics is a and 494 employees in 2005, the spikes,” adds Arjun. Even though company has scaled to Rs 511 margins in this business are programme of the finest crore and 5,900 employees. around 8-10%, being a B2C busi- “Coming in from the world of ness it adds a big chunk to the restorations of world heritage project finance to films I had no clue that there is much method in turnover. The industry opinion however is divided on the growth cinema. Mrinal Sen’s film has the chaos in this business, it’s very of the plex business, specially at undergone a detailed entreperenural and scalable as the current levels of ticket prices. well,” says CEO, RMW, Anil Ar- It is however, their new media restoration and we’re very jun, who was with Reliance Cap- services which includes Digitial ital and ICICI earlier. Intermediary, VFX, the biggest excited to reprogramme this Scale is something which was a 2D to 3D conversion and restora- must for Ambani junior — they tion facility spread over 10,000 sq classic Indian film in Cannes had to be the “game changers” in As a global player, ft in Airoli in Mumbai, with over VAN PAPADOPOULOS this business. The flip side was 800 employees in phase I, which growth brought along debt and we provide unique is Arjun’s pet project at the mo- PROGRAMMER, CANNES CLASSICS an interest burden, pulling the tools and the ment. In fact, the restoration has bottomline down at RMW (the got off to a flying start with the bid only listed entertainment entity). highest quality of they won for a 1,000-film Yet Arjun, for whom number- service for creatives restoration from the National crunching comes easily, is not worried about the downward ar- in India, Europe and Film ArchiveKandahar whichwith Mrinal Sen’s of India (NFAI) un- rows on the share price or the Hollywood derwent pristine restoration re- losses they have been posting for moving, dust, dirt and scratches two years. He is confident this ANIL ARJUN as well as flicker stabilisation and year things will change, with ra- CEO RMW will be shown at the prestigious dio demerged from this year and Cannes Classic this year. film production excluded as well, profits and for- “The margins in restoration are 30-40%, plus it tunes will turn. is a scalable model. As for competition, there areBack From Beyond: Shabana Azmi in Mrinal Sen’s Kandahar which has been restored by RMW. It will be “Income from operations, has grown in the entry barriers as in ability to build scale, skill setsscreened at the prestigious Cannes Classic segment to be held in May last quarter to over Rs 212 crore and it reflects in and intensive training — in aggregate we are our EBIDTA. Since the company is in a growth spending as much as $ 35 million on the facility. phase, significant capital has been deployed over Add, the advantage of our premier facilities in the last three years in various businesses, the im- US and alliance with Imagica, Japan so collec- A good quality print can pact of which is reflected in the interest burden of Rs 92 crore,” he adds. tively, we have a 75% share in the high end restoration space,” says Arjun. survive 50 years and if Arjun’s confidence stems from the fact that competition, though present in almost all the So, will their expansionist strategy work? “Our vision is to provide next-generation film and maintained well, even 100 sectors they are present in from labs to DI VFX, media services for every story and the scale to tack- years. Different temperatures exhibiton and restoaration, will face entry barri- le any challenge. As a global player, we provide ers mainly of scale—the biggest differentiator for unique tools and the highest quality of service for in different cities, plus no ideal RMW. Add the speed with which they can scale creatives in India, Europe and Hollywood, thus en- up, rope in talent, train them, collectively offer- abling story tellers to realize their vision and con- storage conditions is where ing a service few can match. Simutaneously, Ar- nect them with the audiences,” ends Arjun. jun’s strategy has been to scale his global foot- The opportunities are definitely global and degradation begins print adding strength to his services. The idea is they are in the process of matching their skill sets for each deal to draw on each other’s strength as well. VIJAY JADHAV D I R E C T O R N AT I O N A L F I L M A R C H I V E O F I N D I A and work together, so Lowry in Burbank, which nandini.raghavendra@timesgroup.com ET Multiplex Tracker APRIL 23-29, 2010 PAATHSHAALA Net Collection: 86.56 Audience: 89792 Occupancy(%): 11.83 Week: 2 THE BOUNTY HUNTER Net Collection: 66.98 Audience: 45630 Occupancy(%): 15.87 Week: 1 PHOONK 2 Net Collection: 40.16 Audience: 43122 Occupancy(%): 9.47 Week: 2 APARTMENT Net Collection: 34.66 Audience: 36208 Occupancy(%): 8.35 Week: 1 HOW TO TRAIN YOUR... Net Collection: 30.51 Audience: 23731 Occupancy(%): 22.84 Week: 2 Source : Inox, PVR, Cinemax Fun Cinemas & Satyam Rs lakhRegistration Number MAHENG/2007/24438 Volume No.4- Issue No. 18Published for the proprietors, Bennett, Coleman & Co. Ltd. by R. Venkata Kesavan at The Times of India Building,Dr. D. N. Road, Mumbai 400001 and printed by him at The Times of India Suburban Press, Akruli Road, WesternExpress Highway, Kandivli (E), Mumbai - 400 101. Tel. No. (022) 6635-3535, 2273-3535 Response Ph: (022) 6635-3636, 2273-3636 Email etbom@timesgroup.com Fax (022) 2273-1144 Editor : Mr. Bodhisatva Ganguli. (Responsiblefor selection of news under PRB Act.) Reproduction in whole or in part without the written permission of the publish-er is prohibitedAir Charge: Goa, Nagpur & via Re. 1.00, Chennai & via Rs. 3.00, Ahmedabad, Bangalore, Hyderabad, Mangalore &via Rs. 4.00, Delhi, Kolkata & via Rs. 5.00NOT FOR SALE OUTSIDE INDIASubscription rates: US $ 500 (annual), US $ 250 (half yearly) US $ 125 (Quarterly).

Scale comes naturally to Ambani Junior and his crack team at Reliance MediaWorks. Their strategy is to build a company that will dominate the global film and media services’ value chain. While searing growth has pulled down profits and increased the debt burden in the past two years, the company is confident of making it to the big league, reports Nandini Raghavendra

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