Monetising big ticket movies isn’t easy: Hemal Jhaveri, Star Gold

04 Apr,2012

Movies on TV are, no doubt, a hot business now especially for general entertainment channels who often do premiers of big-ticket movies to spur GRPs and in the process move ahead of the competition. Recently Star has acquired the rights of Kahani and Dabangg 2 while Zee has acquired Don 2.


Last year Star acquired the Viacom library as a strategy to become the largest player as far as the sheer number of movies is concerned. Now the network enjoys a rich library of movies that it showcases across channels.


MxM India’s Rishi Vora speaks to Hemal Jhaveri, Business Head of Star Gold on acquisition strategies, cost versus profitability issue and much more.


Q: What is Star India’s strategy as far as acquisition of movies is concerned?

We have been very aggressive on movie acquisitions. In fact, Star Gold, where we do a lot of premiers, is in the forefront of movie acquisitions. In the recent past we’ve acquired movies like Singham, Ra.One, Zindagi Na Milegi Dobara and Rockstar, to name a few.


Q: Do you normally sign deals even before the movie goes on ground for the shoot?

It is Dabangg 2 that we signed before the shooting began. A few acquisitions we’ve done – some of them are under production. While the stars do matter, what we do as a practice is put a strict content lens on it, so we try to minimise the risks in that fashion.


Once you buy a movie it has to deliver the same amount of returns over seven to 11 years. That’s the length of time we look at while acquiring movies. So it’s clearly beyond the premier game. If a great movie comes our way and we feel that it’s not apt for the television audience, we will not go for it.


Q: In case of Dabangg 2 – you’ve acquired that at a significant price. So, why make that kind of an investment when you don’t really know if it’ll deliver?

It’s Dabangg 2. It’s Salman Khan.


Q: That’s the only factor?

Yes. See, Dabangg 2 is a great franchise to earn. After acquisition of the Viacom slate where we have Dabangg and now Dabangg 2 – we’ve acquired the whole Viacom library. All of their 500 movies are ours.


Q: When did this acquisition take place?

We acquired that in December last year. With this, it just makes us the largest movies library in the country.


Q: Huge monies are spent on movie acquisitions at times. Dabangg 2 in this case. Is it a risk worth taking?

It depends on what you’re buying and at what price.


Q: 3 Idiots got acquired in about Rs 30 crore by the network which owns the rights. They’ve milked it well and the buzz is it has made about Rs 200 crore or even more.

Yes, 3 Idiots did very well from the standpoint that it made a lot of money.


Q: The buzz is that Dabangg 2 has been acquired for Rs 50 crore.

I will not like to make a comment on that. The cost of acquisition is higher than 3 Idiots considering the latter was acquired some three to four years ago. And the fact that inflation plays its part.


Q: What is your view on ROI for advertisers who buy spots on big-ticket movies that premier on TV?

Well, I can only talk about Star Gold and the advertiser response we get. Singham rated 8.7 TVR, Bodyguard set the new record at 10 TVR and Ra.One was 6.7. All of these movies have done well on the ratings front.


From the standpoint of an advertiser, these movies are a fantastic platform. So it’s really a win-win situation.


Advertisers need to look at it from a portfolio approach and not just a single movie. There are movies which may or may not do well on TV. It’s not easy monetising big-ticket movies. The cost continues to go up. The cost of movies has gone up close to 30 per cent since the last two or three years. Advertisers should look at the portfolio of movies and the duration period till we own the rights. We have movies to which we own the rights for 11 years.


Q: But if you keep playing the same movie again and again, how much will you be monetising on that anyway?

We’re in the business of repeats. First and foremost there are not many movies that get made, and out of the movies that are released, there are only a few that do well. So the universe of movies keeps getting smaller and smaller. For example this year there are going to be only two Salman Khan movies and one Aamir Khan movie from what I gather.


Q: But what I’m saying is that if you’re running a movie say for the 20th time, the revenue in terms of ad sales on that 20th run will not be much.

Not really. Say a channel which does 140 to 150 GRPs, there are a good set of audiences that come on to the channel. So yes, we may have movies running many times on the channel. What we attempt to do is make enough profits. And the revenue that eventually gets generated is not bad.


Q: What movies are we going to see from Star this year?

The movies for 2012-13 which we have acquired are Bol Bachchan, Kahani which will be aired soon, and Housefull 2.


Q: When was the acquisition done for Kahani?

Kahani we acquired four months ago. I can’t tell you exactly when it’ll be aired on TV.


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