In 2005 Reliance Capital paid Rs 360 crore for Adlabs, a film processing and multiplex firm. It then went on to built an entire media services business based on Adlabs’ 140-odd clients. Reliance MediaWorks has grown from Rs 87 crore in March 2005, to Rs 700 crore in top line for the nine months ending December 2010. It is the largest part of Reliance ADAG’s foray into the $17-billion Indian media and entertainment business. It offers a bouquet of services around the creation and release of the audio-visual content such as film, ad films or television shows. This includes making promos/trailors, image correction, restoration, subtitling, digital imaging, post-production, special effects, equipment rental and so on. It just added 200,000 sq ft of studio space in Mumbai. Of eight shooting floors, three are ready and booked in the space-crunched entertainment capital. Vanita Kohli-Khandekar spoke to Reliance MediaWorks CEO, Anil Arjun, on what the studio capacity means to the company. Excerpts:
Why is the studio important?
It completes the circle of services we have to offer. We took the lab and worked on a share of wallet basis. Within this area (Filmcity), now you can walk in with a script and walk out with the film. Not just feature films but also ad films. In fact, 65 per cent of cameras are hired for ads. This helps us build relationships with these people. Today’s ad film maker is tomorrow’s film maker. We like to look at ourselves as the Larsen & Toubro of the business. The idea is that this (media services) is a commodity business and there is no differentiation. Therefore, the need is to insulate by tying in a studio with the rest of the stuff we offer.
Is scale the big differentiator or the array of services?
Both, though we are not in all services. For instance we have avoided dubbing and sound mixing because it is too competitive. In fact, most big musicians such as (A.R) Rahman like to do their own sound mixing. But, largely, it makes sense for a film maker to have his reel in a secure place and that is what we offer. Everything moves on a secure broadband connection between our different locations in India or overseas. Having said that, not everyone is using us for end-to-end facilities. Some people use our lab, the others special effects or digital imaging or output services. Having everything here gives us a comprehensive perspective of the filmmaking process. Within the company, we understand what it takes to produce and execute a film.
What is the earnings’ impact the studio is likely to have?
Each of the inter-related services segments/businesses has to stand on its feet. We went through a large capex in the last 24 months on the media BPO and the studio. The studio by itself is 25 per cent of the capacity available in Mumbai. As an integrated service offering it can deliver close to 10 per cent of the top line. Not just the studio but the full bouquet on offer will start having an impact on revenue from FY12 and FY13. As a broad range, directionally, these investments by itself will lead to consolidated revenue for Reliance MediaWorks in the range of Rs 1,200-1,300 crore, of which close to half would be from the services businesses.
What are the missing links in the bouquet of services you offer?
Digital is ubiquitous and all these guys (film, TV, ads) need to go digital. It could be for YouTube, the mobile, 3G, iPad or for anything else. There is access, coding, encoding, migration software and other things that need to be done to content. India consumes 70-80 hours of content every week in multiple formats. How to manage this transition (from analog to digital) is the opportunity.
Are you referring to media outsourcing, (Bharti and NDTV, among others, have recently got into the business)?
Yes. Lots of companies have got into it because they are close to the consumer. When the Japan earthquake happened, all over the world people were pushing for content, there was a need for footage NOW, not stuff taken from the godown. In the US, it is calculated that television has an eight-minute window of opportunity to get content out when an event like that happens. After that, people go onto social media or other things. This is especially true of sports, news, live events. I have the clients and the infrastructure; I just need to build on that.
