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Everyone is still in 50-60% denial mode

Everyone is still in 50-60% denial mode
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First Published: Thu, Apr 23 2009. 10 22 PM IST

Luck by chance? Ronnie Screwvala says UTV’s success is due to lucky timing. Abhijit Bhatlekar / Mint
Luck by chance? Ronnie Screwvala says UTV’s success is due to lucky timing. Abhijit Bhatlekar / Mint
Updated: Thu, Apr 23 2009. 10 22 PM IST
Mumbai: The 54-year-old head of the Mumbai-based media conglomerate UTV Software Communications Ltd, Ronnie Screwvala has been likened to the Hollywood mogul Jack Warner for his role in setting into motion the corporatization of the Indian film industry, while building a presence in broadcasting and gaining a foothold in the gaming industry. The company, in which Walt Disney Co. holds 57% stake, also broke new ground with its decision to co-produce films with Hollywood studios, including M. Night Shyamalan’s thriller The Happening with 20th Century Fox and Mira Nair’s Namesake. Screwvala, who was this week named by BusinessWeek as one of India’s 50 most powerful people in 2009, speaks in an interview about the company, the state of the industry and what international recognition means to him. Edited excerpts:
Click here for a downloadable podcast explaining the dispute between producers and theatre chains
Luck by chance? Ronnie Screwvala says UTV’s success is due to lucky timing. Abhijit Bhatlekar / Mint
How does it feel to be likened to Jack Warner, and to receive recognition in this form?
They are lovely compliments to accept and that’s it. If you look at it, they (the original Hollywood moguls) were doing everything. There were no theatres or distribution system and it was triple the work. Those were the guys who were the dream merchants. So it is basically the whole rung of creating an industry. I think it is relevant because as a company UTV is pushing the envelope and not just in our own space.
I think UTV has definitely been responsible for making the first move to start to change the industry. We have done one or two Hollywood movies and maybe that is why BusinessWeek thinks I should be one of the 50 most influential people in India. I am flattered but I think the criteria are all wrong.
First, Bollywood, and then India, are two very attractive stars right now, so anyone coming on that landscape and breaking out will get picked up. It is just lucky timing. Nothing else.
Is Hollywood on your radar at the moment in terms of future collaborations?
We have no specific plans for Hollywood. We have been very fortunate with what we have done so far and future collaborations will be on a project by project basis, but if you ask me today I have absolutely zero plans for that. We are not enamoured by Hollywood.
What have been the most profound manifestations of the economic downturn on the industry and on UTV?
For us, the downturn is one of the best things that could have happened for our business and to media and entertainment generally in India. The reasons for this are that there was too much free equity flowing into the industry that was not making any businesses sane to work in. That correction has really been able to allow those people with strong business models to get back to business and not deal with the puff. Second, the correction which would normally happen and needed to happen and would have happened in two-three years, has happened in six months.
Third, the revenue models and what we are doing have not shrunk that much overall. What has affected people in India is not that market has shrunk, but that the money flow has shrunk overall. But for the companies that are overall well funded, that is less of a risk. For us, of course there are pressure points and our cost model could have been a little more aggressive based on the environment. But we needed to be with the Joneses at that time and it now needs to get corrected.
What is the company’s biggest challenge in this climate, and strategy to withstand the turmoil?
At this point in time, to us our biggest challenge this year is to continue to communicate our model which we believe is much more scalable than any other model in the country. And I would rather not say this, because until it is delivered we don’t normally like saying things. But the propensity of our verticals are huge, and we are in businesses that are scalable.
How close to completion is the correction?
For every part of the industry, it is in process. I don’t think everyone has got it. I think that everyone is still in 50-60% denial mode, and not just for films, but the industry in general. To a certain extent, I don’t think anyone is correcting their business model; they are correcting their costs. So that is why it is work in progress, but it is also work in denial. It is difficult to say when the industry will emerge because if no fresh equity flow starts coming into the business, people will have to take much more stronger steps on cost correction than they have right now.
What was the cause of the current stand-off between the multiplexes and producers? And how will it be resolved?
Anything that has business compulsions will finally end in resolution. I think the reason for this happening is a fair amount of non-comprehension of the core problems and everyone is looking at their own point of view. And this applies to both sides. If everyone had spent a little bit more time over the past two years understanding that, then it would not have become a face-off by the end of it.
The points for discussion are not huge and the compelling logic for finding a viable solution is humongous. But now because of the lack of comprehension and face-off, it has to have a different complexity in its solution so that is going to be the tricky one.
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First Published: Thu, Apr 23 2009. 10 22 PM IST