Viacom18 scripts a super success story in movies

The joint-venture media company has built a profitable films business in the last five years, and plans to step up its presence in regional cinema

The old adage "there's no business like show business" is not true any longer, especially for Indian cinema. On the other hand, those in the film industry are more likely to say: there is no business as risky as show business.The reason for this is the number of variables that govern the profitability of a movie. If that is the yardstick, Viacom18's film arm - Viacom18 Motion Pictures (VMP) -has done well for itself having turned profitable in five years.

The film arm of the 50:50 joint venture between Viacom Inc and TV18, subsidiary of the Reliance Industries-owned Network18, has released 80 films since inception.

A sense though of how it is doing can be gauged from this: The studio invested close to Rs 220 crore on movie titles in 2014 and 2015. In return, these movies earned close to Rs 380 crore at the box office, helping VMP make a neat profit of Rs 160 crore at gross level. Adding other revenue streams like music and satellite rights, brand placement and international box-office collections, the studio has managed to retain profitability even after distributor share is deducted from gross profit.

Its industry peers - Disney, Fox Star and Eros - are larger in comparison with 10 to 12 movies releasing a year. VMP, in contrast, releases six to seven films a year.

Positioning counts
In the last three years, VMP has positioned itself as a content-led creative and distribution unit. The studio began with out-of-the-box movies (for that time) like Tanu Weds Manu and Kahaani (in 2011/2012), raking in not only box-office moolah, but also appreciation from critics.

  "We had a great start with these films. But somewhere along the way we lost focus. While others generally see one successful film for every five released, we had a one-in-two hit ratio. Despite this, profitability was impacted. We needed to refocus. That is when we took the call to back content-led projects," says Sudhanshu Vats, group CEO, Viacom18.

The time Vats is referring to saw VMP release a spate of big, small and medium budget movies. Films such as OMG-Oh My God!, Madras Cafe, Special 26 and Gangs of Wasseypur (1 and 2) were critical and commercial hits. But those like Aiyyaa, Department, Boss, Players, Inkaar and Blood Money hit bottomline.

This wasn't all. In 2012, VMP's Sons of Sardar clashed with Yash Raj Films' Jab Tak Hain Jaan at the box office. Despite the two crossing the Rs 100-crore-mark in collections, profitability took a beating.

Turning point
The turnaround came in the second half of 2013 with titles like Bhaag Milkha Bhaag making good money. The Farhan Akhtar-starrer on the life of athlete Milkha Singh ended with domestic collections of Rs 104 crore. It was with national award-winner Queen in 2014 though that the studio's strategy of content-led films clicked.

The success of Queen was followed by movies like Manjunath, Mary Kom, Margarita with a Straw, Manjhi: The Mountain Man, Drishyam, Gabbar is Back and Pyaar Ka Punchnama 2. As a result, the studio not only built a strong library of films, but also had a few tent-pole projects with stars like Ajay Devgn, Priyanka Chopra and Akshay Kumar.

Ajit Andhare, COO, Viacom18 Motion Pictures, says, "VMP has stood for a distinctive kind of cinema, consistent in delivery. A conscious and calibrated business approach of focusing on innovation and rooting them in strong viable economics has been our hallmark."

Vats adds that apart from being cost-conscious and putting the script in focus, his team also pays heed to data analytics. Calling it the 'science behind the art of cinema', Vats says that data has been used to green-light films and plan ahead. VMP was among the first in India to have an external panel for the green-lighting process. Green-lighting here means films that are approved for production.

"Data can help the industry as a whole. I feel we should welcome third-party reporting of collections. Data can be used by exhibitors for dynamic pricing (of movie shows) too. This will help utilise screen space better. We are currently using only around 35 per cent of the exhibition capacity in the country," says Vats.

While the studio's Bollywood slate is doing well, Vats and Andhare are optimistic about regional cinema. VMP has identified Marathi and Bengali cinema as areas of focus and is taking steps to grow its presence there. Earlier this year, the studio released Marathi film Poshter Girl, which was well-received at the box office.

"When almost 59 per cent of the country converses in regional (languages), it is important to explore business opportunities in regional cinema. Marathi and Bengali cinema interest us. Also, given the comparatively smaller scale of mounting regional films, there is more scope for experimentation. This lends well to our strategy of investing in content-led and rationally-budgeted films," adds Vats. The studio continues its march.