'We'll have 50 theatres across the country'

Q&A: MANMOHAN SHETTY

, Shetty talks about the company's new ventures and plans. Excerpts:

You've made some high-profile appointments in the past few months. What does the structure look like now?

We have essentially recruited people in the business development area. We have to ensure that the business is growing, and so have taken on Sunir Kheterpal and Kapil Bagla to explore new businesses that Adlabs can venture into in the entertainment space. Tushar Dingra is heading the multiplex venture and Tarun Katial the radio business.

Currently, we are focussing on setting up our overseas distribution network, and are setting up offices in the UK and US. In overseas business, the margins can be 15 to 20 per cent. For us, this will be a margin-based rather than a turnover-led business. After about three months, we would take in the next lot of people to execute plans in the identified areas.

How are you going about your plans in the radio venture?

To ensure independence of operations, we will be floating a special purpose vehicle (SPV) created by Anil Dhirubhai Ambani Enterprises (ADAE) called Adlabs Radio. The SPV will have a focussed approach on the radio business, while Adlab Films' will continue focusing on multiplexes and post-production film facilities.

Adlabs also intended to get into domestic distribution. What's happening on that front?

We were going to kick-start domestic distribution this year, but we have not done enough legwork or put any infrastructure in place. But by early next year, we should put things into motion, backed by films produced in-house. By the end of this year, we'll have about five-six films produced by Adlabs.

There seems to be no clarity on your plans to enter the television business....

We are not interested in a television channel as of now. The decision was taken by the ADAE board. I've been briefed not to get into television channels at this moment "" whenever that brief changes, we would look into the space.

Nevertheless, we have identified some people in the television production business, and are serious about it. We've recently appointed Siddhart Jain as the head of the animation division. We have a couple of proposals to co-produce with US producers.

What about your plans to have film-processing facilities in south India?

We have started working in association with the Chennai-based Vijaya Labs. All new investments are being pumped in by Adlabs. We are starting a lab in Kolkata, which should be operational in the next three months. The only other place is Hyderabad, but it already has three labs, so we don't see the need to enter that market. The film-processing business currently contributes about 60 per cent of our business. This year, it should become 50 per cent, and in future, multiplexes should bring in the maximum revenues. We are also in talks for acquisition of a major player in the south.

What's your revenue model and payback period for digitisation of theatres? What's been the progress on this front?

The investment is about Rs 4 crore per property and we are looking at about 50 cinema houses in all. The payback period will be about four years. We are taking over old cinemas on lease and renovating them. The completion of this process will take about two years. The rationale behind this is that when we release a film produced or procured by us, we should have a chain of our own theatres in the country, including multiplexes.

While in the metros and major cities, the films will be screened in both Adlab multiplexes as well as others, in smaller cities they'll be screened only in Adlab theatres. We are looking at some 50 stations across the country, panning the entire Hindi belt. All these theatres will be twin-screens.

On the multiplex front, the IMAX doesn't seem to be doing well in Mumbai....

We have signed up 110 screens in all. The IMAX Dome is not performing up to the mark, but the IMAX multiplex is. We have about 27 per cent occupancy for the IMAX Dome, which is not good enough. But the multiplex occupancy stands at about 38 per cent.

In the home video segment, I believe you are now taking the organic route.

We have not managed much progress on this front. We are looking at a deal with Sony Pictures as it has an established country-wide network. We have gone through its network in detail and might use it instead of reinventing one ourselves.

What about co-productions?

Except Marigold, which should be releasing in August, no other co-production deal has been signed yet. We have a lot of co-production projects lined up, but we haven't taken them any further as we would first like to see the response to Marigold.