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| "One way to cut risks is to pre-sell some rights" | | Q&A: Vijay Singh |
| Shobhana Subramanian / Mumbai Aug 28, 2009, 00:48 IST |
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 Fox Star Studios (FSS) has been in the limelight because it acquired the worldwide rights for the Shah Rukh Khan starrer, ‘My name is Khan’ for a reported Rs 100 crore. FSS’ second release, Quick Gun Murugan, hits the theatres today after Slumdog Millionaire made over Rs 40 crore at the box office last year. Vijay Singh, CEO, FSS tells Shobhana Subramanian that in its new avatar, the joint venture between Twentieth Century Fox and Star will co-produce half a dozen films a year. Excerpts:
What’s Fox’s strategy in India going to be in its second avatar?
Earlier we were only distributing films but now we want to co-produce films, about five or six films a year. And we have a portfolio strategy so we’ll do a mix of big, medium and small films — big films like My Name is Khan and a couple of films each with Vipul Shah and A R Murgadoss. We want to work with the best talent and do differentiated content — we’re pushing the envelope with films like Quick Gun Murugan. It was a property created on television — coincidentally on Channel V — much like Sex and the City or X Files in Hollywood. If it’s a hit, we may even do a sequel.
How much are you hoping to make?
I never predict a number, but we’ve sold the satellite and music rights. Over the last couple of years, it’s only producers in Bollywood who’ve made money. Most distributors, who have acquired films have lost money. Fundamentally, over the last few years, Bollywood’s business model had gone awry. There was a disconnect between profits and risk, one person was making the profits and the other was taking all the risk. We just want to do 5-6 films a year, not 35 films. So, we would happily walk away from a smaller film if we haven’t seen it and that way we’re eliminating some risk. Our judgement can still be wrong but then it’s all about minimising risk.
Do you think you’ll make money after paying Rs 100 crore for My Name is Khan?
Okay, now that you’ve touched upon that, Rs 100 crore is completely wrong, it’s an exaggerated number. As for the risk, as I said, with small films, we’ll see the film; and for medium and large films, our primary focus will be to get into co-production. That means we play an active role of producer along with the other producer. And one of the things we’re trying to implement here, like they have in Hollywood, is a development process, where you focus on the script and see that the talent and budget is in place before anything else. There are two areas where Bollywood has been relatively weak, one is scripts and the other is budgets. I’m not saying we’ve cracked it, but we’re trying to take on board all our learnings.
Is there any way to minimise distribution risk?
Distribution is a big priority for us as a studio worldwide, Fox is today present in 46 countries. So, controlling distribution and being the market leader in distribution is a big priority. The point about risk management is really important and I think, yes, there are ways to manage risk. One way to do that would be by pre-selling the rights. If you look at Hollywood, 50 per cent of revenues come from home entertainment whereas in Bollywood it is just 8 per cent. In India, the big contributor is satellite which fetches between 25-30 per cent of revenues though it may be somewhat less at this point. And music would contribute 8 per cent. So we could do some pre-selling, though that would cap the upside.
How will you monitor costs?
When we acquire a film like My Name is Khan, we believe we will be able to monetise the price we have paid. When we co-produce a project, we will not take it forward if we do not believe the economics works. If someone quotes Rs 35 crore for a Ritesh Deshmukh film, we won’t do it. To my mind, the risk is not so much in the distribution piece as in the production piece. That’s where we need to make sure budgets don’t go awry, you don’t get sucked into the star pricing. I actually believe that, ironically, the recession of the past 12-15 months is probably the best thing that has happened to Bollywood. If you looked at the last three years, that’s when all the IPOs happened, there was a lot of hot money chasing very little talent and so people did crazy deals and fiddles on balance sheets.
The film industry isn’t really getting corporatised quickly enough, is it?
I may not fully agree with that. I think we must give credit to Bollywood, it doesn’t get the credit it deserves. If you were to look at snapshots over the past ten years, Bollywood has done a fantastic job of changing, it is the best expression of popular Indian culture today. Fifteen years ago, most of us would have been snooty about Hindi films — today everyone, regardless of the socio-economic class, watches Bollywood. While it may be the role of a creative medium to move with the times, you have to give it credit because it may not have moved. True, money may have been burnt but, at an aggregate level, Bollywood content remains relevant socially and it’s better than it was ten years ago.
How do you view the growth of the industry, there are very few films slated for next year?
The good news is that there’s underlying growth — a double digit growth between 10 and 15 per cent, so the theatrical business is growing. Indians don’t really have too many hobbies, we’re not too much into sport. But yes, there will be fewer films released next year and that’s an opportunity for people doing smaller- to medium-films. Some of the madness this year is because of the hot money of the previous years — everyone got into projects without paying attention to scripts and are paying the price. I think people have learnt their lesson. Marketing costs for films are now 15-20 per cent of the budget. The marketing spends for smaller films are ironically larger than for a big star film. That’s where the star value kicks in, you get PR. So we may not have to spend so much for a large film.
How will you leverage Star apart from promoting films on their channels?
Although we are a late entrant, we have some competitive advantages. Since Star is a stakeholder, it allows us to promote films better. The other advantage has to do with Fox. What we will offer the producers we work with is that whichever film we distribute in the US will be distributed through Fox Searchlight. As you’re aware, the biggest challenge producers here face is that there’s an absence of organised distribution in the US.
What are your learnings from distribution of Hollywood films in India?
The market for Hollywood films is growing and some films have done over $2.5 million; the numbers are larger than they have been in the past. Typically two thirds of the earnings comes from the English version and a third from the dubbed version.
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