The Rs 40- crore film production house, Pritish Nandy Communications Ltd (PNC) is making news for two reasons: last week it signed an MoU with the television software company, Balaji Telefilms to produce motion pictures. Two, its next major commercial film Shabd featuring Sanjay Dutt, Aishwarya Rai and Zayed Khan, is ready for a February 4 release. The film is said to have cost nearly Rs 20 crore to make. "For us it's a big budget film," says Pritish Nandy, chairman of PNC. The former editor of The Illustrated Weekly and an ex-Rajya Sabha MP, Nandy spoke to Business Standard on the PNC-Balaji alliance and the future plans of the company.
What prompted the strategic alliance with Balaji?
The two companies have two different skill sets. Balaji Telefilms has done very well in the television space. PNC has also been a reasonably successful film company "" it's done the odd ball commercial film.
Balaji's strength is television reach which is a major constituency for a film today. Revenue from sale of TV rights for a film is seen as a by-product now but my belief is that TV channels will buy films independent of how they do in the market place.
Today television sale is an important part of the recovery of the manufacturing cost of a film. We need to understand that domain space with the help of Balaji.
Has PNC entered such deals before?
No. We have been on our own. But we may look at some co-production deals now.
Why?
Movies are becoming big-budget. Co-productions are useful as companies get away with lower individual investments though they share the profit. All over the world commercial films are co-produced by even up to four to five big film production houses.
Like other film companies, do you plan to get into music and film distribution?
Music distribution is a different play altogether. It is the retail end of the business. Some of my colleagues are getting into the multiplexes business as well which is actually a real estate play. We want to stay in the content zone Creativity and marketing is the raison d'etre of our existence
Which is your next big film and what kind of growth are you expecting for PNC?
Shabd with Sanjay Dutt and Aishwarya Rai is a big budget film for us but we expect to recover the money. There are 7 to 8 films on the floor right now. On a Rs 40 crore turnover our profit is about Rs 5 crore. We could be a Rs 100 crore company in the next two years if we have access to slightly cheaper money.
Hasn't film financing been corporatised?
Not as much as it should have been. Financial institutions still don't have a clue about the nature of the film industry. They are still happy funding factories that they think are the epitome of reliability. I say films are no more or less risky. It is a psychological issue.
The Indian film industry may not grow to its full potential as we never have enough support. It is a Catch 22. When people don't get funding they go for risky money...and then the corporate funding agencies think it is a risky business.
But neither the film companies' nor the TV channels' media stocks are doing too well.
Well, there are a very few listed mediaentertainment companies. And these are all very small with the sole exception of Zee. I think a lot of amalgamation in entertainment is likely.
Meaning?
I expect a lot of buying and selling to happen in this industry. PNC will also buy if it can find a successful player. It is not easy to locate a tiny successful company.
