Case: Balaji Telefilms
Submitted by-
1
Barnava Nandi Tanushree Pai PGDM 2012-14 International Management Institute, Delhi
Table of Contents Company at a glance ............................................................................................................................... 3 About the Company ................................................................................................................................ 4 Operations .............................................................................................................................................. 5 Current Productions................................................................................................................................ 7 Troubled times and a New Avatar .......................................................................................................... 7 Balaji in Movies ....................................................................................................................................... 8 Financial Highlights ............................................................................................................................... 10 Organizational Structure ....................................................................................................................... 12 It’s
mantra for success .......................................................................................................................... 12
Future of Balaji Telefilms ...................................................................................................................... 14
2
Company at a glance
Balaji Telefilms
Industry
Entertainment
Founded
1994
Founder(s)
Jeetendra
Headquarters Mumbai, India Key people
Ekta Kapoor and Shobha Kapoor
Products
Television programs, Motion pictures
Parent
Balaji Motion Pictures ALT Entertainment
Website
www.balajitelefilms.com
3
About the Company
Balaji Telefilms was incorporated in 1994 and has redefined the Indian television space in this period. Making a strong start with hit shows like ―Hum Paanch‖, the company rose to unprecedented heights in the late 1990s and 2000s. The satellite boom in India can in a sense be said to have been created and led by Balaji. The performance of the Hindi television channels and the dominance of the Hindi General Entertainment Channel was pioneered by Balaji content and run successfully for over a decade, with blockbuster shows like ―Kyunki Saas Bhi Kabhi Bahu Thi‖ and ―Kahaani Ghar Ghar Ki‖ garnering unheard of TRPs. The company has produced over 15,000 hours of television content since its inception, including content in Hindi, Tamil, Telegu, Kannada and Malayalam. Balaji also entered the motion picture business in the late 1990s, producing and distributing a number of films. Today, the company occupies a dominant space in the television content creation space, with the No.1 show on Indian television to its credit and all of its shows among the Top 50 on television. Balaji has also diversified itself into all the 4 screens by bringing in new teams for the motion pictures, internet and mobile space. The company has also evolved with the times and significantly corporatized itself, bringing in a Group CEO and experienced professional team for driving the future strategic direction of the company. From a television content provider, we have evolved into a media conglomerate with organizational divisions responsible for television, motion pictures, and internet and mobile.
4
Brands Balaji today is a different firm from what it was even one year back. Pioneering widely different genres of content across several distribution media, the firm has completely redefined its brand architecture to reflect these far-reaching changes.
The new Balaji logo reflects its fresh new outlook, while still reflecting the core values it stands for. The Balaji logo will be used for all of its traditional television content, as well as family-oriented, large scale feature films.
Envisaged as a cutting-edge, youth oriented brand, the Alt Entertainment brand will be used on all content catering to a younger, more urban demographic, across the television, movie, mobile and internet space.
Hoonur is our recently-launched online portal for media professionals and entertainment consumers. The brand will be used in the online and mobile spac e both for the entertainment portal and for user generated content.
ICE is the latest initiative of Balaji Telefilms aimed at providing world class quality education to aspirants wanting to make careers in the Media & Entertainment industry. ICE covers all major specializations like Acting, Cinematography, Direction, Editing, Production, Scriptwriting, Sound and Vfx.
5
Operations Balaji Telefilms is based in Mumbai in the Balaji House on New Link Road, Andheri West, Mumbai. It operates from its head office in Andheri West and has studios in Film City and other locations in Mumbai. In terms of studio facilities Balaji Telefilms is one of the largest productions houses in Mumbai's large film and television production hub. It is making a range of television serials for Zee TV, Sony TV, Colors TV and Channel V.
6
Current Productions
TV Series Pavitra Rishta Bade Acche Lagte Hain Parichay — Nayee Zindagi Kay Sapno Ka Kya Huaa Tera Vaada
Original Run June 1, 2009 – Present May 30, 2011 – Present August 9, 2011present
Network Zee TV
January 30, 2012 – Present
Sony TV
Sony TV Colors TV
Time Slot Mon - Fri at 9:00 PM IST Mon - Thu at 10:30 PM IST Mon- Fri 10.30 PM IST Mon - Thu at 10:00 PM IST
Troubled times and a New Avatar Troubles erupted when her sole customer, Star Plus, India’s most watched Hindi general entertainment channel, discontinued her top-rated show Kyunki… Saas Bhi Kabhi Bahu Thi as its viewership points were on the wane. The move came at a time when the industry was grappling with a serious economic downturn and production houses were being forced to squeeze their budgets. But Ekta wasn’t accustomed to constraints, and she was not sufficiently equipped to tackle the hard times that lay ahead. As more of her shows went off air and her exclusive and lucrative contract with Star Plus came to an end, Balaji was in the doldrums and its stocks plummeted rapidly. Initially, Ekta wasn’t able to see the writing on the wall: Audience tastes were changing and her melodramatic soap operas had outlived their utility. Worse, being the inveterate maverick that she is, she tended to indulge in financial profligacy. Per-episode budgets spiralled beyond control — from well under Rs 50,000 in 7
the 1990s to 18 lakh in 2007. But matters have since been reined in and her current serials — Pavitra Rishta, Bade Achhe Lagte Hain, Parichay and Kya Hua Tera Vada , among others — cost much less to produce.
Balaji in Movies
Balaji Motion Pictures is the sister company of Balaji Telefilms. It entered the Indian motion pictures business in 2002. The company operates the Motion Pictures Division through its wholly owned subsidiary. Balaji Motion Pictures (Balaji Films) was set up in 2001 by Hindi television producer Ekta Kapoor with the purpose of venturing into film production. She produced Kyo Kii... Main Jhuth Nahin Bolta, released in 2001 with Govinda and Sushmita Sen as the leads. The film was not a success, collecting INR13 crores.
2003-2005 Later, the company produced Kucch To Hai, Krishna Cottage and Koi Aap Sa in 2003, 2004 and 2005 respectively. The movies did not fare well at the box office. In 2005, the company produced and released Kyaa Kool Hai Hum, which grossed INR 21.50 crores and made it to the top three films of 2005.
8
2007 In 2007, the company co-produced Shootout at Lokhandwala with Sanjay Gupta. The film was a critical and commercial hit, collecting INR 68.17 crores worldwide. In 2008, the company produced and released C Kkompany, which was a commercial and critical failure. In the same year, the company co-produced Mission Istanbul and EMI – Liya Hai Toh Chukana Parega with Sunil Shetty. Both films failed critically and commercially.
2008 Also in 2008, the company acquired the distribution rights of Bhool Bhulaiyaa and Sarkar Raj with a deal of almost INR 40 crore.
2010 In 2010, the company sub-branded ALT Entertainment, a youth focused brand and produced a low-budget movie, Love Sex aur Dhokha, which proved to be a critically and commercially successful film. In the same year, the company released Once Upon a Time in Mumbaai, which was also a commercial and critical hit. The films also marked the company's successful entry in the films.
2011 In 2011, the company marked its entry into Marathi films by producing Taryanche Bait. The film was a critical and commercial hit and also won many accolades including three awards for Best Film. The company also released Shor in the City, a small-budget critically acclaimed movie. The same year also saw the release of Ragini MMS, coproduced with Amit Kapoor and Sidhartha M. Jain. The response to the movie fetched Stardust Award for Best Film and Ekta Kapoor announced the sequel of the film soon to be released in the year 2013 starring Indo-Canadian Star Sunny Leone. Later, In the same year, the company released The Dirty Picture starring Vidya Balan as lead on 2 December 2011. The film proved to be a huge Blockbuster and was one of the best films of 2011 thereby bagging Vidya Balan her first National Award and all other awards of 2011 for her performance and six awards for Best Film.
2012 In the Year 2012, the company released first ever seen Adult Comedy Kyaa Super Kool Hai Hum, sequel to 2005 hit Kyaa Kool Hai Hum which was slammed by critics but was a Box Office Success thereby made at a Budget of 13 crores and collecting 33 crores itself in its first week. Now the company is all set to release its 8 films in the year 2013 which are under production. Balaji Motion Pictures ranks in the top five film production c ompanies in India.
9
Financial Highlights
10
11
Organizational Structure
It’s mantra for success
Balaji's success was attributed to its early entry into the business and presence in the regional markets. Balaji was credited for assessing the public demand properly. Its presence across the spectrum and its cordial relationship with most channels ensured its continued growth. At the same time, its expenditure was controlled by its investment in high quality studios and equipment. Throughout the 1990s, Western-style plots had dominated Indian television soaps. Instead of following this trend, Balaji conducted research and TV shows and viewers. Balaji's research showed that the reach of fictionbased shows was about 60% and that they appealed to women across regions and languages. Hence it catered to this segment to generate high revenues from television shows. In 2001, Balaji began exploring export markets for its content library. The markets in USA, UK, Canada, Middle East, Sri Lanka, Singapore and Mauritius with their significant NRI population were deemed to become major markets for the company in the future.
12
Strong creative team: The Company’s serials accounted for 79% of the aggregate TRP of the weekday prime time shows featuring in the top 100 Hindi cable and satellite shows. Being the leader in the Hindi mass entertainment space, accounting for more than 40 of the top 100 programmes, some of its popular s erials have been on air for years now but still dominate the TRP ratings. Balaji has also been very successful in regional programming. Low overheads: Balaji's budgeting discipline is responsible for a strict control of costs. The budgeting discipline has the following priorities. Each programme is appraised as a profit canter and costs are compared with the budgeted target across every episode, artiste, location, and people expenses. Secondly, project life cycle management comprises of a holistic perspective of shooting schedules, scene wise artiste requirements, ongoing shooting progress and final product deli very before shooting commences. Further, Balaji has invested in captive sets, wherein the company has in house sets, which helps in saving the hiring cost, and enhances production quality. Also, the company has reduced its dependence on vendor equipment by investing in sophisticated lights; sound recording equipment resulting in substantial cost savings. Balaji has two state of the art post production suites, which accelerates the conversion of recorded material into episodes and enhances the flexibility to review the produced content with the objective of revision and improvement. Growth opportunities: The penetration of television sets and cable TV is very low in India. It is expected to increase due to the rise in incomes and a decline in the prices of television. Advertisement spending in India is directly linked to the growth in GDP. In view of the country's projected GDP gr owth, the country's TV advertising market is expected to grow by a CAGR of 15%. All these d evelopments will increase the broadcasters ability to spend on content, which augurs well for content providers like Balaji. Entry of new players in the Hindi General entertainment space: The Hindi general entertainment space will get more competitive with the entry of NDTV, UTV, and INX Media. The broadcasters would try to maintain or increase their market share by improving their quality of content. Thus the broadcasters’ expenditure on content would increase. INX media has requisitioned Balaji to produce a couple of shows for it. Balaji's programming hours would increase as well as its reali sations per hour should also continue to increase in the future.
13
Future of Balaji Telefilms Indian television industry market holds significant opportunities and it is expected to reach approximately US$1,289 Billion in 2017 with a CAGR of 5 percent during 2012 – 2017. Hence the future is bright for this company and any investment in it by the shareholders will generate high returns.
14
