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Fox Star Studios stays put in Bollywood; reaps dividends

Fox Star enjoys sustained success in India, doing better than Sony Pictures Entertainment and Warner Bros Entertainment
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First Published: Thu, Jan 17 2013. 12 41 PM IST
Fox Star Studios chief executive officer Vijay Singh says Fox Star Studios’ strategy is to essentially focus on co-producing and then structure its own production. Photo: Mint
Fox Star Studios chief executive officer Vijay Singh says Fox Star Studios’ strategy is to essentially focus on co-producing and then structure its own production. Photo: Mint
Updated: Thu, Jan 17 2013. 09 06 PM IST
Mumbai: Vishal Bhardwaj -directed Matru ki Bijlee ka Mandola may not have set the box office on fire, but that hasn’t altered production house Fox Star Studios Pvt. Ltd ’s India script.
“The economics of the film were structured taking into account that it would polarize audiences…, which is expected in a Bhardwaj movie,” said Vijay Singh, chief executive officer of Fox Star, adding that the film had recouped its investment and then some. Released on 11 January, the movie is a co-production of Singh’s company with Bhardwaj. The film has had a better opening than his previous movies, Omkara and Kaminey.
Fox Star is the only banner with a Hollywood base to have enjoyed sustained success in India in the past few years, doing better than Sony Pictures Entertainment and Warner Bros Entertainment Inc., both of which haven’t been able to establish a foothold in the country despite ambitious attempts to do so.
Fox Star is a venture of Twentieth Century Fox Film Corp. and Star India Pvt. Ltd , both of which are owned by Rupert Murdoch’s News Corp.
The studio is also seeking to step up its involvement with Tamil cinema. Getting a share of the high-profile Indian commercial cinema industry would give overseas studios fresh avenues for expansion, given the dwindling headroom in mature home markets.
Fox Star made its India debut by acquiring the distribution rights of Karan Johar-directed My Name is Khan featuring Shah Rukh Khan in 2009 for Rs.100 crore. That’s the most that has been paid for the acquisition of an Indian film.
When released in 2010, My Name is Khan earned around Rs.110 crore from the Indian box office, allowing the company to make its presence felt in the industry. That year it also co-produced Khichdi and Quick Gun Murugun. Neither of those films were big hits, but reportedly recovered their investment.
Last year, Fox Star co-produced five films, of which three—Bol Bachchan, Jannat 2 and Raaz 3—were hits. While the combined loss from London Paris New York and Ekk Deewana Tha was around Rs.8 crore, according to industry estimates, the five films collectively earned around Rs.400 crore from the domestic and international box offices.
“While other studios gave up easily, Fox Star didn’t,” said film trade analyst Komal Nahata. “It dabbled in different films with varied budgets. They lost money on a few films, but if you weigh the law of averages, they have been commercially successful.”
Saawariya, directed by Sanjay Leela Bhansali, marked Sony Pictures’ entry into Hindi cinema in 2007. The movie, which also saw the debut of Ranbir Kapoor and Sonam Kapoor, was a flop, leading to a loss of more than Rs.25 crore.
Likewise, Warner Bros’ first Bollywood release, Chandni Chowk to China, starring Akshay Kumar and Deepika Padukone in 2009, lost almost Rs.30 crore, while its second release, the low-budget Atithi Tum Kab Jaoge, recovered costs. Since then, both the production houses have shied away from making Bollywood films.
The Walt Disney Studios’ bid to enter the Indian film industry with Yash Raj Films Pvt. Ltd also failed, with animated feature Roadside Romeo making a loss of around Rs.4 crore in 2008. Since completing its acquisition of UTV Software Communications Ltd, the Walt Disney Co. India has merged its India operations with those of UTV, and releases all its films through a new entity Disney UTV.
Warner Bros declined to comment. A Sony Pictures Entertainment spokesperson said, “Bollywood production is not on the cards as of now.”
At the time the big Hollywood studios sought to enter India, the old-style family-run banners were giving way to home-grown professionally run production houses such as Eros International Media Ltd, Reliance Pvt. Entertainment, UTV Motion Pictures and Viacom 18 Media Pvt. Ltd, the last a joint venture between Viacom Inc. and Network18 Media and Investments Ltd.
What has worked in favour of Fox Star is its co-production strategy, media experts said.
“The studio chose its associations carefully, working with film-makers with a proven track record such as the Bhatts (Jannat 2, Raaz 3), Rohit Shetty (Bol Bachchan),” said an executive at a leading film production and distribution company who spoke on condition that neither he nor his firm be named.
While Fox Star doesn’t rule out the possibility of acquiring films from other production companies, it wants to focus on either co-producing or stand-alone productions, to be part of the creative process from the scripting stage. “Our strategy is to essentially focus on co-producing and we are also structuring our own productions for which we have an in-house team,” Singh said.
Another advantage Fox Star has is its deal with Star India. Under this, the television broadcaster that runs the Star Plus, Star Gold and Life OK channels among others will buy the satellite rights of all Bollywood films released under the Fox Star banner.
For this year, the Fox Star Hindi film line-up includes Jolly LLB starring Arshad Warsi and Boman Irani (a co-production with Subhash Kapoor); Murder 3 (a co-production with Mahesh and Mukesh Bhatt’s Vishesh Films); and Bullet Raja, starring Saif Ali Khan and Sonakshi Sinha. It has signed Hrithik Roshan and Katrina Kaif for Bang Bang, set for a January 2014 release.
“We plan to scale up movie production in Bollywood and Tamil… We are working on having a slate of six-seven Hindi films and three Tamil films a year,” said Singh. Fox Star released its first Tamil film, Engeyum Eppothum, (Anywhere, Anytime) in 2011 and has two scheduled for this year.
Industry experts say there’s scope for Hollywood studios such as Warner and Sony Pictures to re-enter the fray.
“Hollywood studios lack in the aspect of creativity…in understanding the pulse of the Indian audience…and that is one of the reasons they choose to co-produce. But for growth, they need to have their own in-house creative team to churn out solo productions as well,” said Nahata.
The Indian film industry is estimated at Rs.10,970 crore in 2013 and is seen growing at a compounded annual growth rate of 10.1% to Rs.15,000 crore in 2016, according to a 2012 media and entertainment report by lobby group Federation of Indian Chambers of Commerce and Industry and KPMG, a consultancy.
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First Published: Thu, Jan 17 2013. 12 41 PM IST
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