COVER STORY FILMS

KRISHNA GOPALAN

huge poster of from his recent blockbuster Ready is perched comfortably behind Bhushan Kumar in his sprawling western offi ce. “Yes, the fi lm did pretty well,” says Ku- mar, Chairman and Managing Director, T-Series. “Pretty well” is an understate- ment: Ready is the biggest hit of the year, gross- ingA over #180 crore globally on a #40 crore budget. T-Series not only holds the music rights to the fi lm, it also produced the blockbuster. Kumar doesn’t say how big his profi ts were but his rivals jealously concede that the cash registers haven’t stopped ringing. T-Series, known to some people as Super Cassettes Indus- tries, is the largest player in the Indian music industry. Kumar MUSIC RIGHTS HAVE SAVED decided to hold on to the music rights of Ready when he could have sold it for a handsome sum. He says the thought never MANY A BOLLYWOOD FLICK entered his mind. “Th e fact is we have a great label and the THEFROM GOING SOUND UNDER. musicOF business is oneMONEY we understand really well.” Th e track

record bears out that claim: in the past year alone, T-Series released the music for fi lms such as , Once Upon a Time in Mumbaai, Murder 2, Ready and Zindagi Na Milegi Dobara—each of which earned upwards of 20% on their in- vestment. “Th is year, we have picked up the music rights of 60 Hindi fi lms,” Kumar says. Th at’s nearly half of all planned Bollywood releases in 2011. A New Tune Music sales add to the revenue of fi lms, in some Striking The Right Note cases bringing in almost a third of the budget. As anyone in the music industry will aver, getting the audience’s pulse right is anything but easy. Besides, music in Bollywood FILM BUDGET MUSIC RIGHTS BUYER is almost always sold without a music company ever getting Ready 40 9 T-Series a chance to listen to its soundtrack. Sounds ridiculous, but Delhi Belly 25 8 UTV Music that’s exactly how this high-risk, uncertain-return industry Zindagi Na Milegi Dobara 55 12 T-Series operates. If that’s not enough, supply continues to be at the Aarakshan 42 6 Sony same level. In 2009, there were 94 releases, while in 2010, 129 fi lms hit the theatres. “With the number of fi lms not increas- Bodyguard 60 9 T-Series ing dramatically accompanied by the fact that there are barely Ra.One 100+ 15 T-Series three or four large players, there is bound to be an infl ationary Krrish2* N/A* 8 T-Series mindset,” points out Shridhar Subramaniam, President (India & Middle East), Sony Music Entertainment India. His company * To be released in 2012. All others are 2011 releases. Source: Industry All fi gures in Ncr picked up the rights to Prakash Jha’s Aarakshan for #6 crore

52 OutlookBusiness > September 17, 2011 ILLUSTRATION BY MANISH MARWAH; PHOTOGRAPHS BY SOUMIK KAR OutlookBusiness > September 17, 2011 53

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past, Saregama has acquired the music rights to No One Killed Th e model is simple: when a user watches a scene (or song) Jessica and Ragini MMS. “Th e plan is to produce three or four Th e plan is to produce three or from the fi lm, it either starts off with an advertisement or there fi lms in the next 18 months,” says the company’s Business is a crawler at the bottom of the screen. Th e revenue gener- Head (Films), Aditya Shastri. four fi lms in the next 18 months. ated by YouTube through these ads is shared with Shemaroo. If there is a feeling that music prices for large fi lms have hit —ADITYA SHASTRI “Digital is a medium for the future and we expect that to the roof, it is worthwhile to recall the phase between 2001 and Business Head, Films, Saregama contribute more than 10% of the fi lm producer’s revenues in 2002, when the rights for Kabhi Khushi Kabhie Gham were the next three years,” says Gada. sold for #10 crore while Devdas went for #13 crore. Taurani’s Tips acquired Yaadein for #8.5 crore where he is said to have The Mobile Connection recovered just #1.5 crore. “Th e reality is that music prices have Th e mobile operators and hand- remained relatively stable unlike home video. A song typically set manufacturers second digit- gives a fi lm more longevity,” points out Subramaniam. Today, al’s dominance. Consider Nokia, no fi lm fetches more than #1 crore for its home video rights. which already has a strong on- Th at probably explains how the music of a fi lm actually mini- line music presence globally. It is mises the damage at the box-offi ce as well. Take the case of estimated that Nokia has over 1 Tum Mile, a #20 crore fi lm that saw its music alone bring in million users in India, who, ac- #5 crore. Eventually, the theatrical collection for the fi lm was cording to KPMG, account for barely #10 crore. Likewise, Patiala House, made on a budget 16% of its global downloads. of #20 crore saw its music bring in over #4 crore. Th e fi lm From an operator’s point of tanked at the box-offi ce. view, it is estimated that mu- Th e fact is we have a great label sic brings in close to 60% of its and the music business is one we Go Digital non-voice revenue (more com- understand really well. Contrary to popular perception, the fi lm music business in monly referred to as value-added India is alive and thriving. What’s really helped is the ubiquity services or VAS). Within this are —BHUSHAN KUMAR of the mobile phone and the digital revolution that’s come alive caller tunes, ringtones and music Chairman and Managing Director, T-Series through DTH, radio and the slew of music channels. Today, clips, to name just a few. Th is is music reaches the end user in various forms, with physical in addition to legal downloads and has also signed a three-fi lm deal with Vashu Bhagnani. (older formats like CDs and cassettes come here) now a poor of music from sources such as Clearly, one person who is not complaining is the producer, second to digital. For 2010, according to a KPMG report, digital Music Bharti ( a part of Bharti who manages to put in place a derisking model that works— brought in #420 crore, while physical contributed #320 crore Airtel), which claims to be In- get in some useful money by selling the music, which takes of a total industry size of #850 crore. By contrast, in 2007, dig- dia’s largest music company in care of a good part of the cash fl ows. And if you are making ital accounted for #140 crore, while physical was #560 crore. revenue terms. “Th e good part a big-budget fi lm like Zindagi Na Milegi Dobara, Ra.One or Other numbers also bear out the digital boom in the music about this is that revenue can Krrish2, you can be assured that at least 15% of your budget industry. In 2006, it accounted for just 14% of the #700 crore KPMG’s estimates suggest that it will move to a much larger Yes, there is be generated over a period of will come from the sale of music rights (see accompanying industry’s revenues. Today, the fi gure is just a shade under 50%. 79% by 2015, with barely 6% coming from physical. Kumar time,” thinks Taurani. graphic). “For a fi lm with a budget of #12 crore, music can agrees on the potential for digital. “Th ere’s no doubt that digital money to be It’s not all positive. Only 30% of # bring in as much as 35%, while for a fi lm with a 60 crore # is a big story. Th ere is a lot of action waiting to play out on all made in music, the revenue on a mobile down- budget, that number could well be 25%,” adds Subramaniam. For a 12 crore fi lm, its platforms, be it radio, internet, mobile or television.” Th at though we will load comes to the music com- Tips’ Taurani should know a little bit about that. His com- music can bring in as will be the take-off point for the industry, as its dependence pany; the mobile operator takes pany, which in the past has picked up rights to musical hits on theatrical revenues will come down substantially. take a measured the rest. And that shows no signs like Khalnayak and Raja Hindustani, had a huge success with much as 35%, while Other players, too, are convinced that the digital space will of changing. “Operators facili- # approach to the Ajab Prem Ki Ghazab Kahani, its home production, in 2009. for a 60 crore fi lm, it be the growth driver in the coming years. Tips Industries, for business. tate the music reaching the end Made on a budget of #40 crore, the fi lm grossed close to #90 could be 25%. instance, has virtually stopped physical production of music. consumer. With the kind of in- crore at the box offi ce. According to Taurani, the producer’s “Th e only time we make CDs these days is when someone —APURV NAGPAL vestments we have made, we will share of domestic box-offi ce revenue was #33 crore, while it —SHRIDHAR SUBRAMANIAM comes to us with a large order and makes a down payment,” Managing Director, Saregama naturally get a larger share,” says earned #10 crore from the overseas markets. “More impor- President (India & Middle East), Sony says Kumar Taurani, the company’s Chairman and Manag- an offi cial with a large operator. tantly, it earned #4 crore from music, which I did not have to Music Entertainment India ing Director. Consider this: the revenue from VAS for operators is pegged share. Th at’s the good part about music as a revenue stream,” Meanwhile, Shemaroo, the largest independent aggregator at $1.4 billion (over #6,400 crore). Music is said to account for he says. Not surprisingly, it is a model that he will employ in in Bollywood with over 2,500 titles, has put in place a team least half of that. Th erefore, when Kumar speaks of recent hits the time to come—produce a fi lm and retain the music rights. of 80 to execute its digital plans. “Th ese people work on key from his stable, such as Pee Loon, and Th is is a model that seems to have appealed to Saregama as platforms like mobile, internet and IPTV,” points out Hiren , it translates to digital applications in vari- well. India’s oldest music company will release Soundtrack, Gada, Director, Shemaroo Entertainment. His company owns ous forms. For that matter, the songs from Dabangg are said its home production, in September this year. Th is #5.7 crore the perpetual rights for over 300 fi lms like Amar Akbar An- to have been played over 200,000 times across radio stations. fi lm will have as many as 12 songs with some from Sarega- thony, Chupke Chupke, Namak Halaal and Jab Jab Phool Khile. If the digital medium continues to rake in the moolah fi lm- ma’s existing catalogue. Th e music rights will remain with the Rather than depend on uncertain sales of home video, the makers can rest assured that at least one variable from their company. “Yes, there is money to be made in music, though company is trying out innovative revenue-sharing agreements derisking equation will continue to work wonders. we will take a measured approach to the business,” says the with online players. For instance, Shemaroo makes money Email us at [email protected] company’s Managing Director Apurv Nagpal. In the recent each time a clip from any of its fi lms is watched on YouTube. or SMS OLB at 575758 

54 OutlookBusiness > September 17, 2011 OutlookBusiness > September 17, 2011 55

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