Venkatesh Roddam

Executive Director
VenSat
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Content

• Winds of Change
– Towards a Converging World
– Digital Content Creation
– Animation
– Pre-Production
– Risk Management
– Co-production
– Locations

• Funding
• New Partnership Models
• Human Capital Endeavour

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How I perceive this industry?

• M&E space globally that has

Hollywood
matured as any other industry
• Industry – that is transforming Bollywood: Hindi Film Industry

by adopting flexible business

models Kollywood: Tamil Film Industry

• Investment Community that

Sandalwood: Kannada Film Industry
focused on IT/ Process
Revolution is now actively
involved in M&E Space Tollywood: Telugu Film Industry

Mollywood: Malayalam film industry

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Moving towards a converging world

• Winds of change are sweeping across - altering the

landscape
• Differences are progressively disappearing between
Hollywood and Bollywood
• Creating new opportunities for collaboration
– Sony's Columbia Tristar Motion Picture Group has over 12 Bollywood
films lined up for distribution
– Twentieth Century Fox to market and distribute Ram Gopal Varma’ next
three films internationally

• Collaboration and synergies are benefiting both

Bollywood and Hollywood

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Collaboration and Synergies

• Digital Content Creation

• Pre-Production
• Locations
• Animation
• Risk Management
• Co-production

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Digital Content Creation

• Digital content has become an integral part in

Hollywood films
• Films (Avatar, Inception etc.) with digital special effects
have been tremendously successful
• Digital content is phasing into non-tech scenes, such
as a snowfall scene (the snow is added digitally)
• Bollywood is on the forefront of producing computer
software through its highly skilled software engineers
and trained IT/ Artistic talent
• Creative Inputs + World-class Execution Capabilities
– Bollywood becomes a major centre for digital content creation

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Computer Based Animation

• Studios/ Production Houses are partnering with

Animation Studios (India-based) for ‘Timely Delivery’
and ‘Cost-Effective Quality’
• Reaping rich dividends with a partnership-based
approach
– Hollywood Team working in sync with Bollywood Team

• Model has been successful in France and Canada

• Bollywood is keen to look at the new business model
• Development of animation software, Bollywood is not
far off

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Pre-Production Activities

• Hollywood producers are getting the pre-production

activities
– Especially those involving computer simulation

• Costume design, visualizing sets before building them

and simulating the movements of lead and supporting
actors for a scene involving many characters in an epic
film
• Large chunks of the sets of the blockbuster film Gladiator
was made in India
– An art-decorator firm in Mumbai was hired to design portions of the sets
for the spectacular Roman saga

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Risk Management

• As Industry on both sides is going through a process of

structurization and corporatization pursuant to which local
banks and other financial institutions are entering
• Hollywood banks, insurance companies and completion
guarantors are collaborating with Indian counterparts to
help them learn how to manage risk
• A huge potential for Hollywood financial institutions
– Film Finance, Inc., (a film completion guarantee provider) has formed a
joint venture in India for providing film completion guarantee services

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Cost-Effectiveness

• Studios/ Producers/ Hollywood filmmakers are looking for ways to

control costs as budgets are spiralling out of control
• Bollywood offers not only an overall cost-competitive structure but
also high quality talent and production facilities
• Many Hollywood producers are taking advantage of modern
infrastructure, technology and other related low-cost facilities, without
having to compromise on quality
• The cost differential prevailing between the two industries are very
substantial
– Hollywood Studio rentals are usually US$ 1500 per hour, whereas it is
US$ 4000 for an entire day and night

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Co-Production Activities

• With foreign investment being permitted, filmmaking has entered into

a new phase - co-production of films with Hollywood
• Currently, much discussion is in progress between both industries in
order to evaluate how they can work and complement each other
• According to news reports, Crown Media Holdings is producing the
film Thief of Baghdad in India for US $30 million with a mix of Indian
and international stars
• Similarly, some of the big co-productions planned are those with
AFMA
• Also, India is in talks about being in a co-production treaty with
Canada which should be concluded in the next few months
– Hyperion Pictures India has produced Marigold

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Locations

• The Indian sub-continent extends right from the snow-

capped peaks of the Himalayas to the warm coastal
regions in the South and that it even has a desert, the
range of locales for film shoots covers every type of
conceivable climate
– A tremendous opportunity and scope

• Hollywood collaborated significantly with the Japanese

and Hong Kong film industries
• The recent unprecedented success of the joint products
of Hollywood and the Taiwanese film industry has "un-hid
another dragon”

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Funding

• Corporate and Private equity interest remains strong with

new investments
• With high-profile acquisitions over the past several years,
private equity’s interest and influence via platform
investments continue to expand across media landscape
• As private equity investors continue to assess the cyclical
and structural issues, interest in the industry permeates
further
• Despite fund-raising lows, significant amounts of
uncommitted capital remain on tap

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Human Capital Endeavour

• To mitigate the demand supply gap Companies adopting

the CoE approach
Vision For Center of Excellence
To nurture talent in the Domain through enhanced education &
Create a transforming learning experience

1. Act as an incubating Center for developing Competencies

2. Serve as the Centre of Creativity powered by R & D

ROI

1. Enhanced Process & Technology focused to bring about Productivity

2. Focus on generating ‘Future Creative Directors’/ Creative Specialists

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New Partnership Models – Value Chain

Outsourcing Model Co-Production Model Original Content Model

• Companies work on • Companies are co- • Involves

contract basis partners to the entrepreneurial
• Doesn't involve overseas production competence to develop
sharing risk and houses a complete product
revenues • Either share IP along from pre-production
• Bollywood companies with revenues or stage to the final
are moving up the partially sharing the distribution
value chain with low revenue and partially
cost advantage gets fixed fee

Source – PWC Report

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Stereoscopy
Thank You

Venkatesh Roddam
Venkatesh@VenSat.in
Executive Director, VenSat