The audience can't be tricked: RIL President, media biz, Jyoti Deshpande

Jio Studios, an independent arm of Reliance Industries (RIL), is having a great time at the box office (BO). Shaitaan, Laapata Ladies, Baipan Bhari Deva, many of its releases last year and this year have been hitting the right notes either at the BO or on streaming. It ended last year with Rs 676 crore in gross domestic BO collection — this is money inclusive of trade share and taxes. JYOTI DESHPANDE, president, media business for RIL, in conversation with Vanita Kohli-Khandekar, at her office in Mumbai talks about Jio’s purple patch and more. Edited excerpts:

What is Jio Studios all about?
 

In 2018 when I joined RIL, Jio had already launched. We had changed the game in telecommunications from voice to data. Internet consumption in India was growing rapidly to be amongst the highest in the world. We were at the juncture where we needed to feed more video to the country to accelerate this growth. It was apparent that media was going to be a very important wheel in the overall consumption game.

My role at that time was to build meaningful media businesses together across the value chain. I had board positions in Viacom18, Network 18, etc. (RIL owns Network18 and its subsidiary Viacom18 and Deshpande was chief executive officer from 2021-23).

We didn’t have a direct scalable presence in the content value chain other than the TV programming created by Colors. So we set up Jio Studios with a vision to become India’s largest storyteller.

But you had Viacom18 Studios…
 

We still have Viacom18 Studios. At the time Viacom was a joint venture with Paramount and we wanted to own and build something to scale in Reliance directly. Therefore, we set up Jio Studios. Mukesh Ambani (chairman and managing director, RIL) always had a mantra of ‘Crawl, Walk, Run’.

Crawl — proof of concept; Walk — early test of scale, Run — execute to scale. This ensures quality and core values are not lost when businesses grow.

The question was how do you build and grow people and personality-driven businesses to scale. Starting small with beautiful gems like Stree, Luka Chuppi, and Bala, this journey culminated in our announcement in April 2023 of a 100-content slate of movies, web series, and short-form content, in Hindi and other languages.

What happens to Viacom18 Studios and Fox Star, Disney’s studio arm? (Disney Star and Viacom18 announced their merger earlier this year).
 

It is healthy to have a separate storytelling capability. We can all coexist separately as we have in the past. Or eventually, consolidate one way or the other. All options are open at this stage.

What is Jio Studio’s relationship then with all the other media firms within RIL?
 

Jio Studio is an independent studio and any relationship with any group company is strictly arm’s length. We also licence our content to Netflix, Amazon Prime Video, Sony, Zee, or Star.

Now that distribution has consolidated across four to five firms — Netflix, Amazon Prime Video, Disney-Reliance, etc — is the media game only one of intellectual property (IP)?

Distribution is going through mergers and acquisitions (Disney-Viacom18, and Zee-Sony’s attempted merger). Then there is the euphoria of selling everything to over-the-top (OTT). That party is over. It never helped to increase the pie. It only shifted monies from one pocket to the other.
 

The sum of parts has to be greater than the whole for the industry to grow meaningfully. If consumption (from the end user/audience) doesn’t increase, the industry size doesn’t increase. IP or stories (whether short or long or in any language or format) are at the heart of the entertainment business.

Leverage over it results in a sustainable competitive advantage for the eventual winner who aspires to take it all, or at a large chunk of the market share.

Where is the slate of 100 right now? Are they all produced by you?
 

We have released 50-plus films and web series. Eight of the films such as Baipan Bhari Deva, Teri Baaton Mein Uljha Jiya, and Laapataa Ladies have been back-to-back successes. The top three movies in India on Netflix for the past couple of weeks — Shaitaan, Laapata Ladies, and Article 370 — are our films. In the global top 10 ranks for non-English films on Netflix for the week of April 29–May 5, 2024, Laapataa Ladies ranked at No. 3 and Shaitaan ranked at No. 4.

We put together 100 pieces of content through a mix of co-productions, productions, and acquisitions. The IP for all of these is owned by us. The 100 figure gave us an opening balance to jump-start the Jio Cinema platform as well as licence at scale to third parties.

Going forward we would be doing maybe 15-20 projects a year. This will include a carefully chosen set of tentpole films with A-list talent, medium-budget stories like Bloody Daddy or Zara Hatke Zara Bachke, and also content-driven, small-budget movies like Laapata Ladies.

What seems to be working especially in the theatres?
 

It involves a lot of intuition, conviction, and self-belief. No one sets out to make a bad film. But the market has changed. The audience cannot be tricked. Great stories that carry positive word of mouth (more than reviews from critics) or a very visceral never-seen-before viewing experience are the very minimum any film needs to deliver.

Also, there is this prescriptive window of 8 weeks for release on OTT after theatrical and 12 weeks on TV. In the audience’s mind then is there is no urgency to go see a film in the theatre. And social media is a monster. If you pay for social media buzz it does not convert into bums on seats.

If you can create (organically) social media conversations, dinner table chats, WhatsApp chats, and trailer views, only then does the film stand a chance. Because the consumer already has the OTT option in his pocket.

Has streaming changed the economics of filmmaking?
 

The unit economics have not changed. The multiplexes always say they are bleeding and are always pushing for better terms from content businesses. The theatrical BO has not grown; new theatres are not being built.

Our markets are underserved and therefore piracy thrives. It is not as if content is not being consumed — it is just that the money is not flowing into the industry.

OTT has grown in lieu of TV and theatrical. An eight-week window is a honeytrap. It has created a (consumer) habit that ‘I will see it on OTT’.

Meanwhile, production costs are not going down, and actors’ costs are not going down. The unit economics of this business require a disruption, a paradigm shift as the risk and rewards currently are not equitable.  

What can be done?

The creative part of the value chain in the Indian entertainment industry is so fragmented. The producer wants his release, the exhibitor wants his share, the South is doing its own thing, and other regional languages are marginal.

Hollywood is consolidated into five neat studios. Here there are hundreds of producers and few studios. Each producer’s interest is not aligned; A pure studio like Jio Studios wants to maximise all windows of monetisation.

A studio like Netflix or Amazon Prime may be wanting to produce content to mainly serve the OTT window at the cost of the other revenue streams. So, each is looking at it from a different angle. There is no common vision. The only thing that everyone seems to agree on (except the stars) is that content prices must go down.