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MANAGEMENT DISCUSSION AND ANALYSIS
The CII-PwC India Entertainment and Media Outlook 2013 finds that Indian entertainment and media (E&M) businesses, like their peers abroad, will need to raise their game in operational agility and customer insight. To achieve this successfully, every industry participant will need to invest in constant innovation that encompasses products and services, business and operating models and most importantly, customer experience and engagement. Innovation should be seen as an important enabler to get closer to consumers and profitably deliver relevant content and services.
Entertainment and Media
Despite a slowdown in the overall economy, the Indian entertainment and media sector is seeing significant growth. PwC works across sectors, viz. television, radio, films, print and digital, and helps organisations improve effectiveness and achieve long-term results.
With new evolving revenue models in the entertainment space, our team of experts can help you with financial forecasting, finance transformation, project management, revenue recognition and supply chain management. With digital media being delivered across new mediums, intellectual property disputes and risk management have become common. Our team helps you resolve these disputes along with content and licensing management. Our practice also provides services around merger integration, financial and commercial due diligence, valuation and tax-effective restructuring solutions.
We have aligned our Entertainment and Media practice around the issues and challenges that are of utmost importance to our clients in this sector. We analyse and understand the environment in which our clients operate and how it impacts our clients business.
Indias E&M sector showed strong growth last year, with revenues rising from 805 billion INR to 965 billion INR, a year-on-year increase of 20%. This growth was achieved in spite of a relative slowdown in the broader economy, underlining the resilience of the sector. It is expected to grow steadily over the next five years at a CAGR of 18% from 2012 to 2017. The Indian E&M industry is expected to continue its strong growth momentum over 2012-2017 to reach an overall revenue of 2,245 billion INR at a CAGR of about 18%. Television, the largest E&M sector, is expected to grow at about 18% CAGR over 2012-2017, driven by growth in subscription payment and advertising revenues.
Sectors such as internet advertising, internet access, gaming and music are expected to grow at approximately 30%, 29%, 19% and 15%, respectively. The radio sector is also expected to grow at a robust CAGR of about 16%.
[REPORT FROM PWC]
Shree Ashtavinanyak Cine Vision is a company involved in the film production & film distribution business.
The company has in past produced blockbuster films like Jab We Met, Maine Pyaar Kyun Kiya, Bhagam Bhag, Golmaal, Golmaal Returns, Golmaal 3,Luck, Dabaangg etc. the Company has released film "ROCKSTAR" during the year on 11.11.2011 worldwide and during 2012, Company has released a blockbuster film named Bolbachchan.
The company has a strong track record in the production of Bollywood feature films. In 2012-13, the company has produced film titled "BOLBACHCHAN" released on 06.7.2012 worldwide and got overwhelming response from all over the world. Also, the film has got numerous awards in various categories
The companys core competency lies in its professional approach to film making, cost-effective production and superior film promotion strategy.
Professional Approach: The company ensures proper pre-production planning leading to minimal delay in shooting schedules, efficient utilisation of equipment, lower project time and proper budgeting of estimated costs including contingencies. The Company is focusing on high entertainment value and mainstream Hindi film entertainment industry producing family entertainers, thrillers, comedy and romantic films. A deep understanding of audience preferences stemming from experience in distribution translates to a high success-ratio of the films produced by the Company.
Lower Cost: Proper budgeting ensures that the project cost doesnt overshoot. Strong impetus is provided to cost benefit analysis for each cost component. Adopting the policy of hiring best directors, script writers and actors is an important thing with an excellent chemistry between director and actors, excellent production values & shooting locations, releasing the film in maximum number of screens all over India, adopting de-risked model & pre-selling of various rights, proper selection of idea, concept & script, making the movie in proper time & budge by completion in less than industry average time of 12 18 months, proper financial management, making hard core entertaining film which has universal appeal.
Superior film promotion and marketing strategy: Apart from the script and the creative aspects, much of any films success depends upon its marketing and promotion. Proper promotion & marketing i.e. spending more on marketing for better opening at the time of release after having proper controlling & monitoring practices. Proper selection of dates of release of the films and the budget for its promotion including television, outdoor, in-cinema, etc. The company has honed its expertise in the marketing and promotion of films, and this has largely been instrumental in the success of its home productions films.
The Companys ability to choose the right project having strong content has ensured its success. In addition, the Company also invests considerable amount of involvement and resources in marketing - pre-release and post release publicity.
The year 2012-13 - witnessed the release of the film "BOL BACHCHAN" which was released on 6th July 2012, starring Ajay Devgan, Abhishek Bachchan, Asin and Others directed by Rohit Shetty.
The Company has not released any projects in the Calendar year 2013 i. e. financial year 2013-2014 because Company is facing certain financial & Legal hurdles. The Company has appointed various Consultants & Legal advisors to solve the various Problems & is hopeful to release & start operations of various other projects next year 2014. On July 6, 2012 Company released the film Bol Bachchan
The Company is associated with many projects in the pipeline in the forthcoming period.
The Company is also working with well known directors like Rohit Shetty, Imtiyaz Ali, Soham Shah,etc. One of the Project directed by Soham Shah is almost complete i. e. end of Production.
The Companys projects ranged from big-budgets to medium budget movies, reflecting its ability to generate content-rich cinema coupled with financial acumen, at the same time retaining its focus on entertaining the masses.
Barring unforeseen circumstances your company look forward to release more film in the coming years.
The Net Sales/Income from operations as on 31.03.13 was Rs. 7600.60 Lacs. This was due to the release of the film Bolbachchan in the month of July. The Net Profit/(Loss) after tax for the period was (Rs.1313.88 Lacs). The Loss was due to only one Movie released during the year & the expenses including finance & Administration & Other Expenses were higher than the Sales/Income.
Risk: Risk Mitigation Strategies
Operational Risk -
Cover cost of production through pre-sale of a part of the rights.
Secure the services of the best talents (directors/actors/technicians) by making timely and prompt payments, to ensure that there are no problems in engaging the dates
Sticking to the stipulated timelines and budgets to avoid cost and time overrun, commonly associated with film making
Having our own distribution network helps increase the profitability and helps distribute films made under other banners.
Putting in place clear responsibility allocation across all functions of Shree Ashtavinanyak Cine Vision
Strict adherence and monitoring of systems
Recruiting and retaining the best talents for key positions with relevant experience in the entertainment industry or other industries
Provide an environment which keeps employees challenged and rewards talent.
Portfolio risk -
Overseas Rights- Theatrical & Home Video
Satellite Telecast Right sale of rights to satellite television channels
World Music Rights
World Home Video Rights
Ring Tone Downloading Rights- to be received from various websites and telecom service providers
In Film Advertising
Add new territories i.e. Central Territory, Eastern Territory, Southern Territory and overseas distribution under our distribution network. This network will be used to distribute in-house productions and films produced by other production houses.
Specialize in mapping the distribution network on the criteria of economics, quality, entertainment value, viewer preferences based on the past track record of distribution and consolidate it further in future.