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Articles on ARR from YG.

Topic started by Are Yaar (@ 203.197.141.186) on Thu Oct 10 08:44:25 EDT 2002.
All times in EST +10:30 for IST.

For many days, I felt that I should have a thread to share some of the articles about ARR in desi and international press and website. I intend to start this thread and expect others also to post some articles about ARR here.

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Responses:

• From: Are Yaar (@ 203.197.141.186) on: Thu Oct 10 08:45:12 EDT 2002
  
  Campaign Logic
  
  AirTel, dil se
  
  The service provider’s lavish new campaign starring music composer A R
  Rahman hopes to engage with consumers at a more emotional level as it
  expands into new circles
  
  Suchi Bansal
  
  In an airport lounge, a child playing his harmonica throws a tantrum.
  Enter India’s acclaimed music composer A R Rahman (of Roja, Dil Se,
  Taal and, more recently, Lagaan fame). The musician walks up to the
  boy, takes his harmonica and plays a tune to placate him. That begins
  the artiste’s tryst with a new composition. His companion likes the
  sketchy tune he plays and requests a full-fledged symphony.
  
  So even as Rahman is on the move, seemingly across the globe, he adds
  to the basic tune along the way from various musicians he meets.
  Finally, he seeks the help of a street band to play his composition
  which is relayed to his partner back in the studio. All this sharing of
  music happens unobtrusively through a cellphone or, more importantly,
  through an AirTel network.
  
  For Bharti Tele-Ventures, this new campaign for its cellular brand
  AirTel, which broke on national TV last fortnight, represents a casting
  coup of sorts. It marks a debut for Rahman — who is known to have sold
  more albums than Madonna and Britney Spears put together — in an
  advertising feature film.
  
  The campaign is intended to deliver AirTel’s new positioning, “Live
  Every Moment”, which began four months ago.
  
  The repositioning is dictated by Bharti’s need to transform its “cold
  and aloof power brand” into a more humane one as the company, which is
  currently present in nine circles, has acquired licences to expand
  operations to 15 circles.
  
  According to Bharti’s director (marketing) Hemant Sachdev, the brand
  was associated with the CEOs. “However, the fact is that the
  fastest-growing market is the 15 to 25 age group consumer in the
  socio-economic category (SEC) B,” he points out.
  
  The starting point of the exercise was to alter the logo to give it a
  younger look — the logo now has sleeker lines and red has been added to
  the staid black. Even its new baseline “Live Every Moment” is a
  complete change from its earlier positioning, “Touch Tomorrow”. “Live
  Every Moment” was the result from research in which consumers said they
  felt nice about their mobile phones.
  
  Contrast this with the earlier studies where the consumers either said
  that mobile phones were good for business or for emergencies. “We
  decided to catch that sentiment in our new positioning. Today, AirTel
  symbolises the freedom to express whatever you want, whenever and
  wherever. It could be a song, an idea or a joke,” Sachdev explains.
  
  It was this sentiment that needed to be carried forward though a
  national campaign that followed AirTel’s roll-out in the new states of
  Maharashtra, Mumbai and Gujarat recently. “As we grew to a 15-circle
  telecom network, we wanted to become generic to mobility in the
  country,” Sachdev explains. The aim was to connect emotionally with the
  masses.
  
  That its arch rival Hutch has also been making a high-decibel noise in
  different circles may have been a reason too. Hutch, however, primarily
  depends on outdoor advertising because it exists under different brand
  names in different circles limiting the usefulness of a national TV
  campaign. Predictably, Bharti officials dismiss any correlation between
  AirTel’s new campaign and Hutch’s increasing ad spends.
  
  According to industry estimates, AirTel spends Rs 100 crore on
  advertising in all its circles while rival Hutch spends close to Rs 40
  crore on the Orange brand in Mumbai alone.
  
  It was against this backdrop that Rediffusion DY&R, the advertising
  agency for Airtel, got the mandate to create the new campaign. The key
  elements to be reflected in the campaign were “spontaneity”, “sound
  clarity” and “immediate sharing”. “When we explored the idea of
  ‘spontaneity’ we looked at the performing arts and selected music.
  
  Music has a direct connect with the heart and is all about sound,” says
  Gullu Sen, national creative director at Rediffusion.
  
  Of course, the going wasn’t easy for Sen and his team. Sachdev proved
  hard to please. “He liked many of our ideas and scripts but continued
  to push us for one big idea,” says Sen. Till he saw the script
  featuring A R Rahman. “It must have been the 300th script we showed
  Sachdev who finally gave his nod,” Sen adds.
  
  Both Sachdev and Sen are quick to clarify, however, that the commercial
  was not launched purely on gut-feel. The marketing director’s nod was
  followed by an intensive eight-city research that indicated that the
  campaign would go down well with the consumer.
  
  However, just when Rediffusion and Bharti were ready to pat themselves
  on the backs, they realised that the campaign had been designed without
  even asking Rahman if he would agree to do the film. The fear that the
  busy music director may refuse was not unfounded as he is known to have
  turn down brand endorsement/association offers from some of the
  best-known companies (including the soft drink giants, it is said).
  
  But Bharti did not have to try very hard. When Sachdev and Sen flew to
  London for a 15-minute meeting with the composer, he was clearly told
  that he was not being approached to be the brand ambassador of AirTel.
  “We were very clear that his mug would not be on every paan shop and he
  would not indulge in any product-speak,” says Sachdev. The film script
  presented him as a character in the film where he plays himself and
  does what he does best: create music.
  
  But what would the campaign strategy have been if Rahman had refused?
  Would AirTel have used any other musician? “We would not have executed
  this particular idea with any other musician or even a model. If he
  refused we had other ideas we could have filmed,” says Sen. He does
  not, however, vouchsafe information on the alternatives. “We may still
  do those films,” he says since the contract with Rahman is only for one
  film.
  
  There is a distinct reason for using Rahman in the film. He is a young
  music composer who is popular with the masses and is still highly
  regarded among connoisseurs for his creativity. “To our mind he was the
  perfect brand fit for AirTel as ‘leader-innovator’ and as someone who
  reinforces the ‘Indian-International’ dimension of the brand,” says
  Sachdev.
  
  Also, there is an honesty about the film as in real life too, Rahman is
  a mobile musician. He not only shuttles between his two homes in
  Chennai and London (where the film has been shot), but globe-trots for
  performances.
  
  In fact, all the other characters in the film are his real life
  associates too. The companion is Chris Nightingale, the orchestra
  conductor of Bombay Dreams, the musical play staged in the UK for which
  Rahman wrote the music. The man in the studio to whom he relays his
  composition over the cellphone is his close associate Deepak Gattani.
  “There is nothing pretentious about the film. It is synergistic with
  Rahman’s affability too,” Sen points out.
  
  The interesting point is that the music director is also busy composing
  five new ringer tones for AirTel subscribers. He has also agreed to
  write music for the new campaigns from the company’s stable.
  
  On the campaign, however, only subscriber numbers will tell if AirTel
  has managed to touch consumer’s hearts.
  
  
  http://www.business-standard.com/strategist/campaignlogic38.asp?menu=1
  
  
• From: Are Yaar (@ 203.197.141.186) on: Thu Oct 10 08:45:44 EDT 2002
  
  VCs foray into Bollywood with Rs 400-cr fund
  SUDIPTO DEY
  
  TIMES NEWS NETWORK [ TUESDAY, OCTOBER 08, 2002 06:19:49 PM]
  
  NEW DELHI: Bobby Bedi's Kaleidoscope Entertainment, a company
  associated with movies like Bandit Queen and Fire, is not just another
  film-production company. It marks the first foray by Indian software
  venture capitalists into Bollywood's dream factory.
  
  
  Bobby Bedi has teamed up with Saurabh Srivastava, chairman, Infinity
  Ventures, a venture capital fund, US-based technology investor Kanwal
  Rekhi and Pradeep Gupta, managing director, Cyber Media India,
  publisher of technology magazines, to chalk out a blue print for a Rs
  400 crore-foray into the entertainment sector, spread over the next
  four years.
  
  
  With a business plan vetted by corporate law firm Amarchand Mangaldas
  and Ernst& Young, the group plans to produce and co-produce 10 to 12 -
  small, medium and big budget - movies each year.
  
  
  "The idea behind the fund is to make a pool of movies targetted at
  Indian and foreign markets. The involvement of VCs would help to bring
  in their experience and success in the Silicon Valley to the
  entertainment industry," said Bobby Bedi, managing director,
  Kaleidoscope Entertainment, who founded the
  company in early Eighties.
  
  
  For Saurabh Srivastava, an IT entrepreneur, the challenge for any VC
  would be to adopt global best practices to be used as benchmarks in the
  Indian film industry. Srivastava feels that, in the long run, funding
  of movies would not be much different than that of funding software
  ventures. "Just like any VC funding in the software sector, we have to
  factor in the element of failure," he said.
  
  
  The effort would also help to internationalise Indian flims as the
  movies would be made with a set audience in mind, pointed out Gupta.
  
  
  As a part of its corporatisation drive, Kaleidoscope has tied up with
  Yash Raj Films to market and distribute its movies. The new venture has
  strategic investments from Gujarat Flurochemicals, promoters of the
  Inox chain of multiplexes.
  
  
  With any VC involvement, exit strategies would not be far off.
  According to Srivastava the company would look for an initial public
  offer only after three years.
  
  
  "We need to have a body of good work behind us with a good track record
  as a company before we go in for any IPO," he said. To start with, the
  company has been set up with an equity base of around Rs 30 crore.
  Future funding of projects would primarily come through expanded equity
  base and internal accruals
  
  
  The first project to get off-the-block, Saathiya, a Vivek Oberio, Rani
  Mukherjee-starrer, is likely to hit the big screen latter this month.
  
  
  Kaleidoscope has also roped in well-known directors like Mani Ratnam
  and Ketan Mehta for specific projects. Mehta would co-produce (along
  with Kaleidoscope) and direct The Rising, a film about the start of the
  Sepoy Mutiny. With Aamir Khan set to play the role of Mangal Pandey,
  the movie with an international star cast would go under production
  early next year.
  
  
  Kaleidoscope Entertainment has joined hands with Mani Ratnam to form
  another production company, Crossover Movies. Ratnam is currently
  working on the script for an international film based on Humprey
  Hawksley's novel Dragonfire to be produced under the new banner.
  Farrukh Dhondhy, formerly with Channel 4 TV, UK, has joined the group
  as commissioning editor.
  
  
  Bedi said that the company has set up a separate division to make
  television software and commercials.
  
  http://economictimes.indiatimes.com/cms.dll/articleshow?artid=24576720
  
  
• From: Are Yaar (@ 203.197.141.186) on: Thu Oct 10 08:46:53 EDT 2002
  
  one more..that's it for now.
  ---------------------------
  The reel story of the music industry's crisis
  
  Film music rights prices are crashing. That's because music companies
  fought bitterly to snare the rights to the music from blockbuster
  films, paying huge sums — and got scorched, report Surajeet Das Gupta &
  Anusha Subramanian
  
  Last year Saregama HMV Ltd, the music company, beat competitors to the
  music rights to what it thought would be blockbusters ---- Rajshri
  Production's "Mein To Deewani" and Rakesh Roshan's ''Koi Mil Gaya" ----
  by forking out about Rs 9 crore. Both films had saleable stars like
  Hritik Roshan, Kareena Kapoor and Abhishek Bachchan. Their box office
  fortunes were more or less assured. Or so it seemed.
  
  But Hritik Roshan’s movies this year bombed at the box office and
  Bachchan has been struggling to get a hit. Meanwhile, Saregama HMV's
  losses mounted to over Rs 25 crore after many of its film albums
  flopped.
  
  So Saregama HMV is now hitting a new note --- it has already served
  notice on the two producers asking them to cut prices by 40 per cent to
  50 per cent. If they don't, it may back out from the deal.
  
  A senior executive of the company confirmed that it was re-negotiating
  the agreements downward, but declined to provide details. After over
  two years of unbridled competition which saw prices of Hindi film music
  rights hit the roof, music companies are making the first tentative
  moves to get back on track.
  
  Exorbitant music rights prices are out, realistic rates are in. In the
  last six to eight months, music rights prices have fallen by 50 per
  cent to 60 per cent -- and are still sliding. And in the same period no
  music company has paid more than Rs 1.5 crore for music rights --- a
  far cry from the Rs 12.5 crore paid for the rights to the music of
  "Devdas" (released this year) or the over Rs 12 crore for the rights to
  the music from "Kabhie Khushi, Kabhie Gham," the 2001 blockbuster.
  
  The music industry is a highly secretive one and music companies are
  unwilling to divulge figures in many cases. But analysts who track the
  industry say that music rights for films like "Dil Vil Pyaar Vyaar" and
  "Paanch" which have hit the market have been sold for under Rs 75 lakh.
  
  
  Says Sridhar Subramanian, managing director of Sony Music India: "The
  rights to Hindi film music are becoming far more realistic. Music
  companies are getting to know what they are buying and putting a value
  to it rather than making blind bids and pitches."
  
  Agrees Mukesh Desai, CEO of Super Cassettes, which sells music under
  the T-series brand name: "We are going through a transition phase.
  Prices will be get more realistic in the coming months and years."
  
  If prices are crashing, it's because music companies fought bitterly to
  snare the rights to the music from blockbuster films, paying huge sums
  -- and got scorched. According to a study by JM Morgan Stanley, many
  companies like Time Audio, Ultra Music and Archies Music have either
  closed shop or are not as active as they were earlier.
  
  Many music companies, some of which are publicly listed, are bleeding.
  Tips Industries incurred a total loss of Rs 19.79 crore in 2001-2002.
  And in the quarter ending in June 2002, it incurred a loss of Rs 2.78
  crore. During this quarter, the company wrote off the audio rights to
  film titles worth Rs 5.61 crore.
  
  What is more, an Anderson-Federation of Indian Chambers of Commerce and
  Industry study makes the point that a music company that bought the
  rights to "Kabhie Khushi, Kabhie Gham" music was unable to recover the
  Rs 12 crore it paid. The study says that the music company had to sell
  6.9 million cassettes to break even (assuming that the profit margin on
  every cassette sold is Rs 20). But it sold only 4.8 million cassettes
  (many in the industry question this though and say that that the music
  company made money).
  
  And Universal Music, according to industry men, sold over 20 lakh
  cassettes of the film "Devdas"' music but was not able to earn a profit
  from this.
  
  Says Komal Nahata, a trade analyst in Mumbai: "Because of the high
  price (Rs 12.5 crore) at which it bought the music rights, it had to
  sell over 50 lakh cassettes to break even. This it could not."
  
  Universal executives were not available for comment.
  
  In short, even if a film is a box office hit, the film's music need not
  necessarily make a lot of money. As a result, some companies aren't
  buying film music rights at all. Industry biggie Tips Industries’
  chairman and managing director Kumar S Taurani Says: "We have not
  purchased any new titles in the last six or seven months."
  
  Indeed, in a bid to hedge risks and cut the chances of losing money,
  music companies are trying out several new strategies.
  
  Gambit one: market niche cinema music albums. For example, an album may
  have a compilation of Hindi film songs from several films which have
  been hits. To cite one case, Sony Music and Saregama have tied up for
  two albums, 'Nikhama Top 10' and 'Sharara Top 10.' Says trade analyst
  Amod Mehra: "In all top music shops in Mumbai, both these titles are
  among the top 10 titles."
  
  Gambit two is the one that's used worldwide: don't buy music rights
  upfront. Instead, traverse down the less riskier minimum
  guarantee-cum-royalty route to buy music. Here, the risks are spread
  between the music company as well as the producer. If the music is a
  hit, both benefit; if not, both lose.
  
  Venus Records and Tapes, for example, bought the music rights to
  'Talash' on a royalty basis from producer Pehlaj Nihalani. Explains
  Jeetu Jain, the director who handles all India sales for Venus Records:
  "We acquired the rights after paying a minimum guarantee for 800,000
  cassettes. After we recover our expenditure on these, we will pay a
  royalty to the producer for each additional cassette sold over and
  above these 800,000 cassettes."
  
  With music companies starting to drive hard bargains, film producers
  are being forced to look at newer ways of recovering their costs. Some
  like Vashu Bhagnani, producer of "Jeena Sirf Mere Liye," are setting up
  their own music labels. Bhagnani launched Pooja Music to distribute
  music, apparently because he was offered a low price for the music
  rights to "Jeena Sirf Mere Liye."
  
  Bhagnani himself says: "I launched a music company because I am sure
  the business of music will improve sometime now." But Bhagnani had
  signed a Rs 25 crore agreement with Saregama HMV for the music rights
  to seven of his films. With three of his films flopping in the box
  office, Saregama executives say they are now renegotiating the deal
  once again.
  
  Bhagnani says diplomatically : "My relationship with HMV Saregama has
  been very good. After taking a big loss, HMV suggested that I start my
  own music company through which I can release the music of my films."
  
  Not everyone is that lucky. Producer J P Dutta who has been hawking the
  rights to the Anu Mallick composed music of his new film, Line of
  Control (LOC), has still not found a buyer. Several attempts to speak
  to J P Dutta proved futile: he was unavailable for comment.
  
  Even A R Rahman's magic is not working. Saregama initially committed Rs
  4.5 crore to buy the music rights to "Saathiya," a joint venture
  between Yash Chopra and Mani Ratnam, with music by A R Rahman. But the
  music company confirms that it is renegotiating the price with the
  producers. Industry men think that Saregama HMV is not willing to fork
  out more than Rs 1.5 crore.
  
  Still, music company executives have a point when they argue that
  they're not to blame for their plight ---- there haven't been too many
  big film hits in recent times.
  
  Says Taurani: "The prices of music rights have gone down largely
  because the quality of film music has gone down." The numbers back his
  statement. In the last one year, as many as 200 Hindi films were
  released. Yet the music of only four or five set the sales registers
  ringing.
  
  Indeed, sales of music compact discs and cassettes in the Rs 1,200
  crore music business fell by over 20 per cent in the last six months
  over last year. And 67 per cent of the industry's revenues come from
  selling film music.
  
  Industry experts also point out that the crises in the music business
  has been prompted by over zealous producers looking for big bucks. Says
  Amit Khanna, chairman of Reliance Entertainment: "I think the high
  rates at which music rights were sold are an aberration. Producers were
  recovering 20 per cent to 30 per cent of their costs from selling film
  music rights. That is unsustainable. Now they are back to five per cent
  to 10 per cent. That is realistic."
  
  Nor has the industry been able to respond to the challenges posed by a
  changing marketplace. New forms of entertainment -- video games,
  internet surfing -- have sprung up and compete with music for the young
  listener's time.
  
  But with their backs to the wall, music companies are finally waking
  up. They're slashing CD and cassette prices. Tips has priced CDs at Rs
  95 for music from new films, and charges Rs 75 for music compilations,
  more than half of the earlier Rs 225-Rs 275 it charged a year ago.
  
  Venus Records too has slashed its CD rates to Rs 99 from Rs 250-Rs 275.
  Audio cassette prices have fallen to Rs 40-Rs 45 from the earlier Rs 55
  a piece.
  
  As a result, says Abhik Mitra, managing director of Saregama HMV:
  "While per unit realisation is low, the gross unit realisation has gone
  up two times (close to between 60-68 per cent). And we have seen growth
  in volumes."
  
  The industry may be singing a dirge about film music. But at the end of
  the day, music companies can ignore it only at their peril. Says Mukesh
  Desai of Super Cassettes Industries: "Ultimately it is film music that
  appeals to audiences and mass listeners of music."
  
  http://www.business-standard.com/iceworld/icew204.htm
  
  

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