Reliance M’Works to shift part of its ops, top execs to US

14 Aug,2012

By Nandini Raghavendra


Reliance MediaWorks, a film and entertainment firm owned by Anil Ambani, is shifting part of its operations to the US, where it will move half a dozen top executives including its chief executive officer for film and media services, Venkatesh Roddam, and chief operating officer of media and creative services, Naresh Malik.


The move, aimed at enabling RMW to get business from Hollywood in Los Angeles as well as broadcast companies in New York, comes in the backdrop of fresh funding by RMW in its JV with Steven Spielberg’s Dreamworks Studios and an impending PE investment in the Indian company by L Capital, a fund created by the world’s biggest luxury group LVMH.


Mr Roddam said that Bollywood production houses are emulating business models of Indian IT firms of the 1990s. A presence in the US will provide RMW the keys to big markets like China and Canada.


Currently 25-30 per cent of the company’s top line for the services business is generated overseas, and with the strengthening of the front-end operations in the US, “we expect a significant upswing over the next years,” said Mr Roddam, who is relocating to New York. “The film and media services business is treading the part that technology companies took a decade ago, where India will get recognition as a market that can provide the right mix of scale, quality and creative abilities in a cost optimized model,” he added.


RMW has a multi-locational grid of facilities, front offices and strategic alliances across the globe, which it hopes will position itself to both offer high quality services within its own facility in Burbank and London, as well as tapping into the quality and scale of services available through its operations in India.


A presence in the US would also help RMW leverage the group’s deal with Steven Spielberg’s Dream-Works Studios where it had infused a much-needed funding of $825 million in 2009, followed by another round this year. RMW’s tUS presence will also help it grab a bigger piece of the global film studios and broadcasters pie in the US.


Similar facilities in Canada could help it reduce costs. Canada offers tax rebate on payroll, which can lead to almost 40 per cent savings.


It also has the language and time zone affinity with the US, where RMW has facilities and so exploring further opportunities for its VFX, stereoscopic 3D conversion and digital restoration services in Vancouver and Montreal would make business sense for the company, Mr Roddam said.


Last week, CEO Anil Arjun, resigned from the company, though he will continue as a strategic advisor.


A few weeks ago, ET reported that L Capital, the private equity arm of the world’s biggest luxury company LVMH, will invest Rs605 crore in RMW, for which L Capital will acquire a substantial minority stake in the company according to a person close to the deal who did not want to be named.


Meanwhile, Reliance MediaWorks has reported that its consolidated loss for the quarter ended June 30, 2012 has increased to Rs131.3 crore, compared to Rs120.14 crore a year ago.


Source: The Economic Times

Copyright © 2012, Bennett, Coleman & Co. Ltd. All Rights Reserved


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