Global Economics

Bollywood Movie Studios Hire CEOs


In a nod to the importance of business in the art of film making, Indian production companies are hiring CEOs with independent authority

As I wait in the Dharma Productions office in suburban Mumbai, I realise that it is not very different from the countless other reception areas I've waited in, in the past.

Clean white flooring with brown-laminated cabinets along the walls, with a well-worn, faded orange couch in the centre of the room. Rather sparse in fact, except for one wall that divides the entrance area from the rest of the room.

This wall is covered with laminated posters of the 32 year old company's biggest hits over the years, from Dostana in the 80s to Gumrah in the 90s to the more recent Kabhi Alvida Na Kehna.

The bottom row is blank, with space for three more posters, and that, I suspect, will get filled up as the company moves from making a film every couple of years to three releases in a year. The person I am here to meet is working at making this happen as soon as possible.

Apoorva Mehta was brought in as CEO of Dharma Productions four years ago, after producer Karan Johar decided that there was a need to expand the business and make more films with external directors.

Similarly, at BR Films, a production house best known for its movies with socially relevant messages and for televising Ramayana and Mahabharata in the 80s, former adman Sanjay Bhutiani, is in the process of setting up his team of vice-presidents who will handle specific aspects of the film making process. Says managing director Ravi Chopra, "The idea is to expand the organisation and take it to the next level. I was clear that I didn't want to be personally involved in the day-to-day running of things."

And it's not just the individual producers who are realising the need to have a separate CEO in charge of running the organisation. A few months ago, UTV Motion Pictures elevated Siddharth Roy Kapur from EVP—marketing, distribution and syndication to CEO as to ensure that there was a streamlined structure in place as it ramped up production from just eight films in 2007-08 to 15 releases next year.

For an industry which has always thrived on personal relationships and an informal style of working, CEOs are somewhat of an oddity. One wonders what role they have to play in a production house when it is well known that most producers are sticklers when it comes to doing things their own way, brooking no interference (well almost) from anyone.

Sporadic attempts at bringing in a semblance of structure and organisation like Ram Gopal Varma's 'The Factory' and Amitabh Bachchan's ABCL fizzled out early, without making too much of an impact on how Bollywood functioned. But over the last few years, there have been a slew of new entrants in this field, ranging from Reliance ADAG's Big Entertainment to Eros International and Studio 18 among others, who have brought with them a more professional way of doing things, where a team, and not an individual, calls the shots.

As the next generation of producers and directors start getting involved in the business, they're realising that the only way to grow the business is to move closer to an integrated studio model. Yash Raj Films (YRF), one of the pioneers, brought in Sanjeev Kohli as CEO in 2000. "My mandate was to strengthen overseas operations, set up a professional team to handle the two-three film releases planned a year and create an infrastructure to handle various touch points in the entertainment business," says Kohli.

Formerly the chairman of NFDC, Ravi Gupta quit his government job to take over as the CEO of LN Mittal's B4U. Now he's CEO of Mukta Arts and says the cost of film making has gone up to a point that it is no longer possible for individual producers to invest in their movies. Mukta was among the earliest companies to go public in 2000, as was Pritish Nandy Communications. Chairman Pritish Nandy remembers how different the industry was when he started:

"The business was opaque. There were also mindset issues. A lot of people thought that the new companies were trying to upset the apple cart by talking about transparency and corporate governance."And these mindset issues have been among the biggest challenges that the CEOs have had to grapple with. "I was fairly isolated for the first few months. People were used to reporting directly to the family, and it has taken time to change that," says Bhutiani.

THE OUTSIDER

Even today, at most production houses there are people who feel that they would earn more brownie points if they report directly to the promoters. Mehta remembers that it was a bit of a culture shock for him when he joined Dharma Productions from YRF's London operations in 2004.

As was the norm, the producer, Yash Johar, had been the only person running the show, while YRF is known for being extremely managerial, and Kohli, meticulous. Today of course, Dharma is far more organised and Mehta has a separate production team to handle each movie individually along with a core team for marketing, script development and other aspects of the business.

While the Bollywood CEO does have the power and authority to take independent decisions, it is clear that at least in the family-run firms, it will be the producer who will remain all powerful. "This business is based on creativity and you can have the best business head working for you, but if you are not strong on content, it will count for nothing," says Mehta.

Quiz him on his working relationship with the family, and he says that he has a lot of freedom to take independent decisions, especially considering that it is a family firm where the leash does tend to be tighter. Of course, it does help that he is also Karan Johar's childhood friend.

But Mehta is quick to point out that a promoter and CEO can never see eye to eye. "A CEO is more focused on the bottomline and will forever be trying to cut costs while someone like Karan is an extravagant producer. It is a basic difference in ideology, so there is a constant balancing act," he says, adding that he seldom wins these debates with his producer.

Gupta says rather diplomatically that in case there is a debate on any matter, it is Subhash Ghai's decision that prevails. "As the chairman of the Board, it is only right that he has the final word, but that happens only after a great amount of debate which is what is important," he says.

Things tend to be a shade easier for the 'corporate CEO', where instead of the producer-owner, he is answerable to a board of directors. To ensure that creativity does not suffer in the process, there are specific teams designated to handle this.

"We have a core team that takes decisions on all creative and script related matters. I too am involved in the creative process till the film is handed over to a director," says Roy Kapur of UTV. At PNC too, the creative decisions are taken by the Nandys, with the day to day running handled by a corporate leadership team headed by CEO Pallab Bhattacharya.

From putting systems and structures in place to entering new business areas to signing deals with Hollywood Studios, the current lot of CEOs certainly have enough to do. Those with the family run production houses like Bhutiani and Mehta also tend to be more hands-on and involved in the finer details of everything as it is a smaller team and there is greater pressure to manage funds effectively as it is often the promoter family's private wealth.

Of course not all producers are jumping onto this bandwagon. People like Vidhu Vinod Chopra continue to call the shots at their production house even as they get other people to direct films under their banners. Others like Vashu Bhagnani of Puja Films have tied up with Big Entertaiment to co-produce five films over the next two years.

Also, with a number of actors venturing into film production, they are either taking on the CEO mantle themselves, as Aamir Khan has, or bringing in close friends to front their ventures, like Sanjay Dutt has with Dharam Oberoi.

Rajshri, another old production house, refuses to bring in an outsider to run its films business, still preferring to do things the traditional way, but its sister concern Rajshri Media is showing signs of going corporate. It has recently appointed a CEO, and Rajjat Barjatya, managing director, Rajshri Media says that his own role was to incubate the business. "Now we are trying to bring in systems so that the company can run on auto-pilot and outlive us. It is not important that somebody from the family runs the business," he says.

Right now, the primary aim of the Bollywood CEO is to put the house in order and establish a formal structure where the producer is no longer at the centre of the day to day operations. UTV's Roy Kapur says that at present, the company is focused on creating the right teams and infrastructure to be able to handle the increased production volumes that it has planned.

The results of all this activity are starting to show. BR Films, for one, posted a yearon-year growth of 300% this year. While such high figures may not be sustainable, Bhutiani says that the company will continue to grow at a healthy rate. Mukta Arts too has stepped out of the red and has been posting a profit for the last two years.

Ask the CEOs if they see themselves ever becoming as powerful as their Hollywood counterparts and the answer is a firm no. "It will be a long time before we in India reach that level," says Mehta. Here, the nature of the business is such that a lot still depends on personal relationships, with distributors, actors, technicians, at all stages of the film making process, prompting Bhutiani to bring in specialists from within the industry to handle specific functions rather than directly involve himself in the process.

The last few years have been a dynamic time for Bollywood and Nandy says that most things have changed for the better. Bound scripts are a norm now, and a lot of attention is given to planning sets and other technical details. The grey economy too is a thing of the past, with almost 99% of all transactions being cheque based today, bringing in the much needed dose of respectability to financial dealings in the business. So much so, there are instances of firms like Dharma outsourcing parts of their payment process today.

Of course, not everything is rosy. Certain characteristic traits remain, no matter how much you try to change things, and handlng star egos is only of one them. "I don't know how seriously people take budgeting in this industry. More often than not, budgets tend to go haywire," says Bhutiani.

The other bugbear that everyone has is that though it is a content driven industry, the least attention is paid to the scripts. Roy Kapur says that it is high time the industry starts taking its scriptwriters seriously, as only then will the next generation of writers emerge. Some production houses are starting to experiment and backing non-traditional scripts like Khosla Ka Ghosla (UTV), Chak de! India (YRF) or Jhankaar Beats (PNC), which have gone on to become huge hits.

At the end of it all, you do realise that most production houses are not very different from the small family-run businesses that are trying to organise themselves by bringing in an external manager. But bringing in a professional helps only so much—in an industry ruled by relationships and not numbers, it is the rest of the industry that will need to get its act together before their work will actually be noticed.


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