Vijay Singh (VS): This team has been with the company from day one, and that says a lot. Rohit (Sharma) heads international sales. Vivek (Krishnani) heads marketing and distribution across Hollywood and Bollywood. Among those who are not here are Shriram (Krishnan), who is the CFO of the company. He is involved in all the key business decisions and also devotes time to the Tamil industry. Neerja (Narayanan) heads Development, as it is all about the ‘stories’. Kumar Sundaresan, heads National Distribution and we all recognise the importance of distribution in this market. Dina Dattani is our Legal Head and Parth Arora has recently joined us to head our Production
BOI: How does a product emerge at Fox Star? Where does it all begin?
VS: Our objective is to become one of the top three film studios in India. The good news is that over the last 12 months, we are already the third-largest company in terms of market share across Hollywood and Bollywood. Within Bollywood, we are in the top five studios in India, which is fantastic as,unlike our competitors, we set up in India less than five years back.
Our guiding philosophy is to ‘create exciting films that are financially prudent’. This,I believe is key for longevity in the film business – more so in India where the risk-reward ratio is skewed. So, there is clearly a sense of achievement for all of us at Fox Star Studios as we are one of the few studios that has been profitable!
We have a clear guiding strategy – as we want to be a significant player in the Indian market and to achieve that goal we have adopted a portfolio strategy across genres and scale of projects. At this stage, we are limiting ourselves to producing films in Hindi and Tamil. We also believe that the audience profile is changing and consumers are looking for differentiated content. They do want films with big stars as also differentiated content that can capture their imagination. With this insight, we do reach out to writers and directors who share a common vision with us. The objective is to identify projects that fulfil this insight and simultaneously are ‘financially prudent’. Development is a very important focus for us. it’s all about incubating good scripts, constantly looking out for good stories, or remake ideas be they from our vast Hollywood library or in Tamil or any other language.
Our aim is to do seven to eight Bollywood films a year and two to three Tamil films. More than number of films, it’s about creating products with a high level of differentiation and entertainment. This would make for strong underlying growth as far as the theatrical business is concerned.
VS: It all starts with a great idea and whether it can be executed in a differentiated manner. The focus is to get it right at the script level and the rest must follow with equal amount of enthusiasm and due diligence. We worked along with Siddharth Anand, Sujoy Ghosh and Suresh Nair for over a year. Once we had a compelling script, we reached out to Hrithik (Roshan) and Katrina (Kaif) and we were of course thrilled that they loved the script. On the other hand, you have a director who shares your enthusiasm and has an incredible script and we get involved in his vision to make it a reality, as in the case of Jolly L.L.B… When Subhash (Kapoor) came to us – he came on the back of Phas Gaya Re Obama – it was the script that moved us. We believed in the script and made the film, and, as they say, the rest is history…
The third approach is the co-production model - when either party has an interesting idea, and both partners respect the complementary strengths that each party brings. In this instance, we typically get involved right from the start of the project, so that both the co-producers can actively engage in the definition of the key elements and working jointly, bring about synergy. Our very successful relationship with Vishesh Films is a great example of a successful co-production model.
Some people tend to believe that just because we are Fox Star Studios, we are not flexible - the above example clearly shows that we are flexible and willing to work with different business models.
Financial evaluation of a creative idea is equally key. Once we have shortlisted the script and have identified the actors, we do a serious financial evaluation - this is a financial modelling system that is a proprietary Fox tool which enables us evaluate how attractive the project is. Say, if we are evaluating Bullett Raja, we look at the financials of all of Saif Ali Khan and Tigmanshu Dhulia’s films and using the historical data, the model enables us to create different performance scenarios, which proves useful in deciding upon the level of risk one is willing to take on a project.
Rohit Sharma (RS): The traditional Indian Bollywood diaspora market in the UK, the US and the Middle East is about 70 per of the overall business. In South East Asian countries, it is 30 per cent. With MNIK, due to its content, we first targeted the Indian diaspora market first, and once we knew the film could travel beyond non-traditional markets, we did a shorter edit and targeted the Eastern markets in Europe, where Hindi films hadn’t been screened before. For example, it was dubbed in French, Italian, Spanish and Russian and released in Europe.
Also, due to the content of the film, markets like Indonesia, Egypt, Syria and Lebanon opened up with MNIK. This was not an experiment; we were confident about the project.
After MNIK, many other studios have started going overseas, which means the market has indeed opened up. But it also depends on the genre of the film. So if you have a film which can travel, thanks to MNIK, we now have buyers who are interested in Hindi cinema. Before that, Indian studios were not confident of taking Indian cinema beyond traditional markets.
And this is also true for high concept driven projects. We released Stanley Ka Dabba in Taiwan, Japan and South Korea. This was not a big film but it was the kind of film that would pass as world cinema in those markets. If you have the right product and distribution expertise, you can go beyond India.
VS: To add to the point Rohit made, I truly believe Fox Star has contributed to the industry as a whole through MNIK, which opened up new markets. Obviously, the next Bollywood film with the right content which goes overseas to these new markets will find it easier. This is just one example of how we push the envelope…
Vivek Krishnani (VK): In the last five years, we have seen Hollywood grow from 4-5 per cent to 8-9 per cent in the domestic market, and there are three factors responsible for this. One is the fact that there’s been a huge growth in number of multiplexes and digital screens, which gives Hollywood films the opportunity to be showcased.
International studios are bringing more products to India and films are delivering box-office numbers. There’s been growth in the film business in general. Wolverine earned Rs 14 crore in 2009, and when the next installment released in 2013, it earned Rs 29 crore. That’s a 100 per cent jump in box office in four years. So, typically, growth of multiplexes and especially digital cinema screens is helping Hollywood.
Secondly, there’s 3D. Again, as far as Hollywood products are concerned, 3D has been a key differentiator, we released Ice Age 3 in 2009 in nine 3D screens and Wolverine this year in over 300 3D screens, which has helped bring the audience into the theatres. Animation has also been a beneficiary of this 3D growth. Previously, animation used to be perceived as bachchon ki picture hai, TV pe dekhenge. But 3D was a clutter-breaker and films like Rio, Ice Age 4 and Croods have seen families patronising animation movies again
Lastly, aggressive marketing has helped bring Hollywood films into the consideration set of audiences. Earlier, potential kya hai Hollywood filmon ka used to be the refrain. But believing in the product and pushing it aggressively has helped. This includes creating a relevant connect with the Indian audience to build appeal as in the case of Life Of Pi. Dubbing has also helped Hollywood films reach a wider audience and made these films relevant to smaller markets.
If you believe in the product and you show that belief in it then the audience comes out and watch the film.
VS: If I could add, over the last 12 months, we are the No 1 studio Hollywood studio in India with a market share of 25 per cent.
VK: That’s correct. We were number one from July to June which is our fiscal year. Life Of Pi was the number two film ever in the history of English cinema in India. Obviously, the number one film has been Avatar, which is also ours! (Laughs)
VS: Making a film takes a lot of effort, so you have to make sure that a lot of quality thinking goes into the marketing with a focus on innovation. As an example, we were the first studio to subtitle English films so that t different accents were not a hurdle to enjoying the film.
RS: It all depends on the film. For example, when we used the shorter version of MNIK, we looked at a socially relevant market. Because of the content, we did business amounting to USD 700,000 in Egypt. Our distributors in Egypt helped us realise the importance of localising promos and posters, which we redesigned to suit the market.
VK: Internationally, especially with the Khans, you have a captive Indian diaspora audience. There is a method you can use to reach this audience via television promos, radio, the online medium and posters. But with MNIK, the challenge was how do we make this a crossover film which is why we had to specially look at mainstream marketing. This is very difficult to do and expensive but the impact was there. For example, in the US, we got Shah Rukh and the cast to ring the opening bell at NASDAQ, and in the UK, we got him on The Jonathan Ross Show which then helped take the film in to the consideration set of the mainstream audiences.
VS: (Cuts in) These are things money can’t buy.
VK: We looked at the Indian diaspora for sure but we also wanted to make the film part of mainstream marketing in these places. For example, we did the premiere in Abu Dhabi. Again, we went to the heartland of the Middle East because we knew the film would be relevant there.
BOI: Fox Star Studios started with a bang by working with Shah Rukh Khan in My Name Is Khan. But you haven’t worked with him after that. Now you are working with Ranbir Kapoor and then Hrithik Roshan. Why is that?
VS: There was a very clear strategy when we started five years ago. In the first year, we decided it was about getting the building blocks ready. So we decided to start with distribution, which is the most difficult thing in a new market, especially in India.
In year two, we decided to enter Bollywood. It was very clear to us that people were saying, ‘You are a Hollywood studio, what do you people know?’ So we decided that if we wanted to make a foray into Bollywood, let’s start with a film and tell them what ‘value’ we could add .
I think MNIK’s USD 23 million international box office collections is testimony to the fact that despite the fantastic growth in the Indian market which is growing by 30 per cent per annum, in the international market, even today MNIK remains the No 1 SRK film overseas second only to 3 Idiots. It was about getting people to understand that we do understand this market,and that we have a competitive advantage in this market because of our legacy from Fox and Star. As part of Star (TV) we have access to a broadcasting muscle on the ground which others don’t have, and Fox brings a huge muscle through its distribution infrastructure across the Top 100 markets.. After MNIK, we decided that we needed to figure out how production works. So we chose to work on co-productions, Dum Maaro Dum, Force, Quick Gun Murugan and Stanley Ka Dabba. We chose mid-level films because the idea was to learn. After we did these films, we decided to take the next step, which was to scale up. I do believe that we have the strongest line up during 2014 across studios Bang Bang, Humshakals, Bombay Velvet, three films with Vishesh Films, Traffic with Endemol and Hawa Hawaai with Amole Gupte..
VS: This happened around the time when we were done with Dum Maaro Dum and Force. We were very clear that we wanted to scale up, and to achieve this, it meant two things – how do we get into more Bollywood projects and how do we get into regional markets? Again, it was about going there quietly and learning about the market as against making a lot of noise...
And I believe AR Murugadoss is the best partner we could have chosen. This has been a fascinating learning experience for us because the Tamil film industry has taught us something that we can transfer to Bollywood. For instance, the story writing in the Tamil industry is way ahead of Bollywood.
The reason is, writers there are very rooted, which is beginning to happen now in Bollywood also. In my view, while Bollywood was racing towards getting inspired by Hollywood, these guys continued to cater to local audiences. Now, Bollywood has gone back to catering to rooted cinema, which is what Tamil has been doing all along.
We have some exciting projects under production and our very anticipated film Raja Rani releases next week.
BOI: From the marketing point of view, what different efforts go into international, Hollywood and regional films?
VK: It is very important to understand who are your target consumers for each of your films and what are the markets they cater to. We follow a strategy of create and connect. Create impact, build appeal and connect to the audience.
With Hollywood films, you have the benefit of the hype that you get from International markets and it is important to leverage that for local audiences. The kind of material that comes out of Hollywood is still way ahead compared to our local market and that generates huge appeal amongst the discerning Hollywood movie goers.
In our local markets the first time the audience interacts with your film they more or less decide whether they want to watch the movie or not, which is why the first look or the trailer is extremely important and has to be impactful. Bollywood has the additional benefit of local talent helping promote the films. For some Hollywood films, we have brought in talent like Ang Lee, Hugh Jackman and others. This gives a huge push in terms of promoting the film. The impact of such a visit makes a film a must-see. The idea of marketing is to make the film an event!
The dynamics of the Tamil market are slightly different from Bollywood. For instance, they don’t release full songs whereas in Bollywood, bina songs ke picture garam nahi hoti yaar. They release promos of songs but they don’t release the full songs also there are limitations on amount of the print sizes that one can take but overall the objective of create and connect still remain valid in this market as well.
VK: Punjabi films are generating huge numbers at the box office. So we said, ‘Can we do a dipstick before plunging into making Punjabi films? Can we get the flavour quickly aur dubbing mein kya potential hai. Also, Hindi ho gaya, Tamil ho gaya, Telugu ho gaya, so we experimented with Punjabi and it worked well for us. Now we are looking for an opportunity to dub films in multiple languages.
VS: Yeah, we don’t want to leave an opportunity on the table. If a business opportunity presents itself, we will go for it.
BOI: What is your message to the trade?
VS: We have to aim for Bollywood films to do a GBO of ` 1,000 crore – for this to happen, not only do we need great content, we also need a major thrust on increasing the nos of screens – inadequate screens could become the biggest bottleneck in two to three years time!
Q&A with Shriram Krishnan, CFO, Fox Star Studios
It’s been a fantastic journey so far. Fox Star Studios has been in the business for five years and I have been a part of the studio from the very beginning. What’s gratifying for all of us is the fact that we have ensured not just healthy year-on-year GBOs but also profitability, which is in sync with our philosophy. And this has happened despite having experimented with different genres of films, from My Name is Khan to Stanley Ka Dabba, to Force to Raaz 3 and many more.
BOI: What is your take on the Indian film market?
The Indian film market has grown at a rate of nearly 30 per cent from last year and we assess that this is going to increase as we move forward, given the fact that exhibitors are going all out to create newer and better plexes and venues that will give value for money in terms of the film-viewing experience. Add to this the increasing appetite of movie-goers, who are willing to bet good money on a wide range of content – massy and masala to niche and parallel cinema. Hollywood’s share too has increased, from 4 to 9 per cent, and more and more viewers are tuning in to dubbed versions in Tamil, Telugu and Malayalam. We experimented with Die Hard 5 in Punjabi and it gave us great returns. When it comes to pure Bollywood, new records are being broken and the Rs 200-crore club may become the new in-thing. So, all in all, these are great times for the industry.
Do you think the industry has evolved over the years?
Indeed it has, from content creation to market innovation to even a greater degree of organisation of talent across different verticals. The arrival of studios has brought in a certain degree of structure and ensured entries of talent at various levels. Marketing and strategy has increasingly become the most important facet of any production house. Today, filmmaking is much more organised and a lot of international talent is working on Indian films and vice-versa.
BOI: The company is also getting aggressive with South Indian films. What is your perception on branching out to regional cinema?
Our idea behind the creation of Fox Star Studios was to not just create content in Hindi but to also get into the regional space. Some of our finest cinematic work is happening in the Tamil industry. We decided to venture into that space since we knew we had an opportunity to be a part of great cinema there as well. Our three-film partnership with AR Murugadoss has given us great fillip to not just explore Tamil cinema further but has also excited us to look at other Indian languages. In fact, our recent two-film deal with breakthrough film producer CV Kumar is further evidence of our seriousness and commitment to promote and create definitive cinema.
BOI: Can you spell out the studio’s plans?
Our aim is to become one of the top three studios in the country, not only in terms of GBOs but also profitability. In fact, as we speak, we are looking at one of the industry’s best slates for any studio. We are finishing this year with Tigmanshu Dhulia’s Bullett Raja starring Saif Ali Khan and Sonakshi Sinha in Hindi and in Tamil we have Atlee Kumar’s Raja Rani starring Arya and Nayanthara. Next year, Anurag Kashyap’s Bombay Velvet with Ranbir Kapoor and Anushka Sharma; Siddharth Anand’s Bang Bang with Hrithik Roshan and Katrina Kaif; Sajid Khan’s massive ensemble Humshakals led by Saif Ali Khan-Riteish Deshmukh-Ram Kapoor; Amole Gupte’s Hawaa Hawaai; and two films with Vishesh Films.