New market Economy

The Fox Star Studios team, Vijay Singh (CEO ), Shikha Kapur (CMO), Rohit Sharma (head of international sales and marketing) and Parth Arora (head of productions), triumphant after hitting bull’seye with Bang Bang and Finding Fanny talk shop, studio strategy and more

Written by Priyanka Sinha Jha | Mumbai | Updated: November 14, 2014 1:00:33 am
Parth Arora (Head of Productions), Sikha Kapur (Chief Marketing Officer), Vijay Singh (Chief Executive Officer), Rohit Sharma (Head, International Sales & Marketing) Parth Arora (Head of Productions), Sikha Kapur (Chief Marketing Officer), Vijay Singh (Chief Executive Officer), Rohit Sharma (Head, International Sales & Marketing)

Fox Star Studios had an interesting mix this year with films as varied as CityLights, Finding Fanny and Bang Bang. What was the thought behind it?

Vijay Singh: I think one of the things that we have been consciously working on is the portfolio strategy which is about doing a mix of big films, mid-level and small films. The reading on the wall has been very clear that the audience are changing and they are seeking different content and it’s our responsibility that the portfolios we create makes different products for the audience. It is interesting that Finding Fanny, was shot originally in English, so not only did we make it for the English speaking audience, but we also thought about how we would take this film to the Hindi speaking audience. What surprised me was how well it was accepted by them given that the tone of the film was slightly different.
To be able to market and distribute an unusual film in a manner that will set it apart from other films was the challenge for us. We’ve been able to do that with Finding Fanny. Then of course, Bang Bang was a very important project, but it was more than just a project for us. Profitability is always the cut-off point and we’ve been able to take the film into a profitable zone.
I can today confidently say that Fox Star Studios is a full-fledged studio because we’ve demonstrated our strengths from the marketing and distribution point of view. We have also shown that internationally, there’s nobody that does it better than us.

You seem to be leaning in favour of a greater involvement in production…

VS: At the end of the day this business model of acquiring projects on acquisition basis is not a sustainable one. We started (production) with Jolly LLB which got us the National Award last year. With Bang Bang, we wanted to demonstrate to the industry that we are here to stay as a full-fledged studio that is good at marketing, is great at selling in the international market as well as at production. I think that validation has been very important for us. We had the most challenging production schedule that any film has had because it was beyond our control with Hrithik’s health, etc. It’s extremely gratifying to see that at this point, Bang Bang is the second highest grossing film in India in 2014 and on the number one position outside of India. Also, our films are among the top 10 films in Bollywood till date, and internationally we are at the Top five Bollywood films.

As a very prominent film studio, is there any genre that you are partial to? Which movie genres do you observe auds warming up to?

VS: We recognise the fact that there are two things; one, that there are different audiences and there’s no one genre or content that can cater to all tastes which is why we are adopting a portfolio approach. Let’s talk in the context of next year’s slate, because we believe that we have the strongest slate in 2015 too. For example, our Diwali release next year is Salman (Khan) and Suraj Barjatya’s film, Prem Ratan Dhan Paayo, which represents mass tentpole films that appeals to everyone. We have Bombay Velvet, which we think is very exciting and different. Ranbir (Kapoor) will be back on the screen after a year and a half when we release in May 2015.
We are doing three films with the Bhatts. So, you see, the portfolio has different shades as we are getting into different segments and within the Bhatt portfolio that we are working on, we have Mr. X. We had done Raaz in 3D and were able to demonstrate to the industry that as a studio we can add technical value as well, because the 3D quality of Raaz was outstanding compared to what was being done in India considering the budget with which we had to do it. We actually got one of the guys from Los Angeles who had worked on Avatar to come and guide the process. Mr. X is going to be the next 3D film that releases on April 17, 2015. The first one with the Bhatts, Khamoshiyaan releases on January 23, which I believe is going to be the album of the year. It has incredible music and then of course we have Mohit Suri’s, Hamari Adhuri Kahani. So within the Bhatt portfolio, we have a supernatural sort of movie, a musical, a sensual, erotic film and then Mr. X which is sort of a thriller and Mohit’s film which has its own distinction of being a powerful love story. We also have Subhash Kapoor’s next film Guddu Rangeela, which is for a Hindi-belt audience across the country; it’s a lot more commercial than Jolly LLB. We are trying to appeal to different segments because audiences are changing and the good news is that they are getting smarter and sharper.

Which international markets are ready to lap-up, the typical Bollywood film we generate, as also Indian films that fit into the world cinema category?

Rohit Sharma: Internationally there are three key markets which are UK, US and Middle East. The audience in these countries generally perceive the traditional Bollywood film as the best genre, but I think the US market is much more experimental. So films like Queen have done a business of as much as $2 million in US. In the UK, they are more old-fashioned, so the traditional song and dance films tend to do well with the Indian audiences there and in the Middle East. Of the three markets, Middle East is growing at 30 per cent and we have a floating population with the local audiences getting involved with Bollywood. With Bang Bang, we did some local marketing activities in the Middle East and the film earned $5.3 million which is the second highest after Dhoom 3 that released in December last year— it is the best time to release a film in the Middle East. I think action genre films tend to do well in the Middle East, but in the UK, it’s the family dramas. The US is an open market and is more like the multiplex audience in India right now, accepting different genres.
Coming to non-traditional markets, we had a film called Stanley Ka Dabba that was released in Japan. So there is a market opening in the Far East too. It initially started with My Name Is Khan, with which we entered South Korean markets and did a business of $ 2 million. When it went across to Europe, we dubbed the film in German, Spanish, French, Italian and Russian. We tried to expand the market and since then a lot of films have come and opened up the market further. With Bang Bang as well, we’ve done close to $ 13.2 million this year, but we’re also are looking to enter South Korea, China, and Japan. These are the other markets open to action genres.

VS : I think all this also helps the entire industry. We took Bang Bang to Lebanon, Iraq and also released it in Burma. So what happens is that once a big film enters a market, it then makes it easier for the other films to follow as well.

RS: Also in the last five years, the studio has delivered the highest grossing international films for Shah Rukh Khan, Hrithik Roshan, Ajay Devgn, John Abraham and Emraan Hashmi. Actually, we are delivering it through our distribution mechanism by picking up a film and pushing it across international markets. I think it’s something we have demonstrated in the past five years.

Shikha Kapur: If you see the last five years, the genres that are performing are those that go beyond the family based genres, with the action genres also doing well. Let’s start with Finding Fanny, Queen or Kahaani— they are not typical Hindi films or typically female protagonist films only, but yes there was a time when they would be considered unsafe from a profitability stand-point. But today, just take a look at the numbers that they generate and also the footprint on television, satellite, etc. It kind of tells you that the needle is moving even with the audience. It gives studios a lot of flexibility to dabble with and not restrict ourselves to some certain SEC-A of genres or talent. None of these movies had great music or chartbusters, but that hasn’t stopped them from doing well. So while it’s right to say that our dependency on music will always be there, there is a whole lot of audience which is going out to enjoy a film for what it promises, besides just being a star-studded musical. Those learning points, gives us an ability and platform to launch new talent in music, writing etc.

What factors according to you have caused this paradigm shift in the number of audience that enjoys different kinds of cinema?

VS : This directional change starts with the growth of multiplexes. Having more multiplexes means that they are hungry for content which helps in segmenting the market. You can see a Gone Girl and a Happy New Year in the same weekend. Secondly, we have about 700 channels booming across India, and whilst Hollywood may just account for eight per cent of the theatrical market today, reality is that the number of people who are actually watching Hollywood films dubbed in Hindi on television is very large. Especially children in the age group of 8-14 years who are exposed to everything happening across the world become the biggest audience base in the future. We have to anticipate these trends because these changes are going to make an important difference. Besides we have 40 per cent of our population that is less than 24 years. When I look at the Middle East, which I believe is a major contributor to the growth, it has 80 per cent of their population that is below the age of 24. The demographics will also start making a difference.

SK: A major factor also has been how we have evolved in the last couple of years on all platforms, whether it’s online, or mobile content. I think content is quickly available today, so as a consumer I need not switch on a channel or wait for an actor to come to our city and let me know about the film. It’s all available on the digital platforms, which I believe online, new media has played a very important role. From the earlier two to five per cent budget allocated for online content, it is now almost 15 per cent. Online is an organic medium with a lot of content strategies and is easily accessible, uncensored and can be watched in solitude. All these factors have found favour with this younger age group that has allowed us to experiment.

Despite being an international studio you have established a very strong presence within India with localised content in Hindi and regional languages, so do you feel that in addition to creating a Hollywood -Bollywood synergy you are cannibalising on your content?

VS : Absolutely not. But that’s a really interesting question. Looking ahead, whether it’s three, five or even seven years ahead, this industry is going to start consolidating more. I think what will happen is, and what happened in Hollywood is that you’ll have a lot of talented people whose core strength is creative and production abilities, not marketing and distribution. So they will become more like creative or production shops, and you will have four or five true studios that will also be doing their own production. I feel being a Hollywood studio is a huge advantage because this is the writing on the wall and obviously studios like us who have been here for a good period of time, have got our feet on the ground and learnt our lessons. Besides, being a Hollywood studio, we have a head start and advantage. For instance, if you look at the process and the level of spends we have to do for a Hollywood versus Tamil versus Bollywood film, which follow very different models, I think because we are in all three segments, we are able to see what works or doesn’t work and why and transfer our learnings.
Fault in Our Stars was a great Hollywood film and within four weeks of its release we were able to make a very strong announcement that we are going to remake it here. If a third party wanted to do it, they wouldn’t be able to.Talking about Bang Bang, the one thing that we believe which added to the differential in the film is the quality of action we were able to push the envelope. We started with a lot of negative response of the industry towards us, they sort of branded us as a corporate, but I think that is fast changing now.
Parth Arora : I think it’s basically the access to all the material and resources that we have available because we are a corporate and an international studio. We obviously faced challenges, but at the end of the day it came down to delivering, whether it was taking help from Los Angeles or Hong Kong or anywhere else. We had those resources at hand, so as a result, without losing focus on the production, we had to get it done no matter what it takes. Bang Bang took longer because of different reasons. But at the end of the day we had the resources at hand, got an action director, but because the film got delayed we had to get another action director. As a studio, we could do it because we had the resources, whereas these individual producers and production houses tend to give up after sometime, due to escalating costs etc.

Do you go on sets of movies to keep a track about how work is progressing?

VS : Yes, absolutely. We have two models now actually, one is like Bang Bang where Parth managed the entire production with his team and the other is the way we work with Bhatts, where we are involved as a company right from the beginning, from the creative ideation process onwards. So for example, Raaz was the Bhatts story and it was our technical skill, Murder 3 was our story and their production, whereas CityLights was again our story.
So we are really working in that collaborative way where they managed the production and we have our production executives as part of the entire thing. The concept of having a production executive and a financial assistant or accountant on set are good disciplines and this will make the industry more conscious. If more films make more profit then the industry will benefit. It will help launch new stars and all those issues that we keep talking about will go.

With My Name Is Khan your partnership with Dharma was announced and it got off to a great start despite the political controversy. What were the major learning’s from that experience and any other?

VS : We wanted to set-up a Hollywood type business and demonstrate to the industry which thought that studios don’t understand this market. That was the reason we did My Name Is Khan to show the industry that we can market and distribute in India and what our clout is internationally as well. And we delivered on that. Whilst we come with the pedigree of films from Fox, India is a different market. So we started with co-productions, we were there on sets and we were involved in the decision making. Having done that, we decided that now we have to extend ourselves beyond Hindi, and that’s when we entered the Tamil film industry with a clearly different approach.
Since this industry is different, we decided to work with only new directors and focus on new actors. But we needed a creative collaboration with somebody who understood the market since it was new for us. That’s when our relation with Murgadoss started. We’ve had five releases, that have all been commercial hits and all of them have had new directors and new actors. Then finally, it was all about getting our hands dirty on production ourselves, so we entered the fray with Jolly LLB and then Bang Bang. Jolly LLB can be argued as a small film, so Bang Bang was the acid test that questioned what we can do as a studio. Today, I believe that we at Fox Star can legitimately call ourselves a full-fledged studio. I believe we have the best and strongest team in the business, whether it is marketing, distribution or production.

One of the industry theories is that studios have made movie making far more expensive. How would you react to that?

VS : Yes, Bang Bang is a big budget film and we wanted it to have a big mounting and base. So, we shot across three different continents, and worked out tax incentives in Abu Dhabi and Prague. Believe me, you need the skill to understand how the system works and it takes a lot of time and effort to understand the legalities. Besides, the business model of Bollywood is actually unsustainable. It’s moving in the right direction, but it needs to walk a little further than this.
One of the things that has kept Bollywood going is that every few years you have new people entering the industry, investing money, losing it and exiting and a whole new crop of investors entering the industry again. Now, that’s fine till the time the influx is continuous, but at some point it will stop and I think now is that stage where the entire business model has to become sustainable. The risk-reward relationship has to be balanced and that’s the other thing you are going to start witnessing. The deals that will be struck will have to be more sensible with equal participation of everyone in the risk-reward margins. So for us to get into production is very important. I’m not saying that we won’t do some of the big projects like that, but it’s also about making sure that we have the ability to sort of cut-out that profit margin, which we would have to pay in the making.

PA: If you want to present something new to the audience, then you have to step into a new territory and there will be costs attached to it at the end of the day. As a studio we don’t shy away from spending money. We give you quality stuff and that’s why the action in Bang Bang was never-seen-before, whether it was fly-boarding or water skiing behind a sea-plane, we were able to get foreign action directors etc. So, when you want to present something new and mind-blowing to the audience as far as the action is concerned or anything else for that matter, then there will be a cost factor involved. The good thing is that studios don’t shy away from that.

SK : I think the other thing is that a studio can provide money and good production values on a large scale to a small film. And Fox Star has really been able to give recognition to small films that have gone on to become tentpole films or clutter- breaking films, whether it’s Finding Fanny or Stanley Ka Dabba. I think without the backing of a studio, the small films continue to operate in a very small zone and they are unable to get the kind of exposure in terms of marketing and thereby reach a wide audience. So one has to look at it from that point as well, that while a studio can come and spend big bucks on a big film, it can also give a legitimate status and push to a small film that needs to be seen.

VS: You can see the chain effect. We all keep saying that we need talent, whether it’s writer, new director or anyone. That’s when smaller films made by newcomers and introducing new talent become more important. So, in comparison it’s actually harder to set up a small film than a big film. It is really interesting to see how we’ve taken all these small films to international markets.

RS: There’s a Tamil film that’s not yet released in India. We took the film to Toronto this year and it was selected. Since then we have done a deal with Japan, Australia and New Zealand. So, we have a regular world cinema deal that makes it more viable to make more smaller films, because tomorrow you are earning international revenue that you wouldn’t have got if it was an XY producer from a local Tamil industry . That’s where you have a studio coming in with its experience in marketing and distribution and making your project commercially viable.

PA : While studios are putting in the money, we should also note where they are spending it. I think that’s where the studio model becomes more viable than others.

SK: If we also talk about our journey with Avatar and Life of Pi, the contribution from the studio perspective is not about the lifetime of the film, but the type of 3D screens we were able to release them in. Our entire involvement with the exhibition chain ensured that films like Avatar or Life of Pi were seen in the right environment. Our endeavour is to technically be able to evolve as an industry to open up 3D screens. We are the only studio to have done that.

VS : It’s a really good case study, because for example, when we released Ice Age which was four years back, there were twelve 3D screens in India. And we had Avatar up for release in a span of nine months. So the distribution guys and the team started pitching to the exhibitors saying here’s a big film coming that needs 3D screens. I think with Avatar we could persuade the exhibitors with the result we had 88 3D screens for Avatar.

RS : Then came Raaz 3D, which was the first Hindi film to go the 3D way. The film did a business of Rs.80 crore and was very successful all over India.

VS : I think now the number of 3D screens is close to 450. We shall be releasing Mr. X, so we will start persuading the exhibitors for more Bollywood friendly 3D screens. We have this synergistic relationship with multiplexes because they need content. This brings us back to your question about whether it is a disadvantage to have so many releases. For me it’s an advantage, as we are providing content to exhibitors after every two-three weeks, whether it’s a Hollywood film, or a Tamil film or a Bollywood film. But if we look at it from the other side, then we also have valuable partners, so it becomes lot more synergistic where we are both working together for the larger good and in the process benefiting ourselves.

Is there a tangible method of calculating a star’s fee?

VS : Generally speaking, the previous film’s performance have a huge impact on star value. But I think they are taking everything upfront because, without taking names, many studios were not being transparent in their dealings. If we structure a deal with a back end, typically if the film does well, the actor, whoever it is, should make more money because then you are participating in the risk as well. But fundamental to that is transparency, which is why only a few studios like us, who have that ethos of transparency, do that.

We’ve had films like Slumdog Millionaire or Life Of Pi, both Indian stories that were made under international banner. So are we going to see a film that is made in India on the scale of an international production by your studio?

VS : Our mandate is not to make those films, but to make films that appeal locally and to the Indian diaspora. But I also believe that if you set out to make a film like that, then you can’t make it. A film like that comes once in a while.

You’ve grown from strength to strength in India, so how would you sum up that journey?

VS : I think we’ve grown from being tagged a ‘cold-corporate’ to a legitimate and real studio.

Which Indian studio would you consider as serious competition?

VS : I really don’t think the competition is a studio. The real competition is to get a share of the mind of the consumer. Frankly, it’s the content that speaks.

SK : We are poised at a stage where the audience that comes to watch a Fox film is aware of what to expect. We don’t necessarily stand for a particular brand of cinema, but we definitely want audiences to come to the theatre, knowing that if it’s a Fox film, they will be served a good and entertaining fare. It could be edgy, it could be a family entertainer, it could be funny, it could be an adult film, but at least we’ll be able to stand for a promise to the consumers that they are going to come away entertained.

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