Has the 100-crore club reduced movies to IPOs?

Monojit Lahiri investigates B-town's latest, booming bimari!

Film critic, Anupama Chopra had lamented about this earlier when Sallu bhai was on the rampage with his monster hits, - Ready, Dabangg, Body Guard – but the obsession with this figure took on very sad, disappointing dimensions when recently the release of the late Yash Chopra’s swan song,  Jab Tak Hai Jaan, was completely hi-jacked by how soon this dazzling SRK-Katrina-Anushka rom-com would blast the Rs 100 crore mark; and not whether the film was the perfect ending to a filmmaker’s magnificent obsession of using love as a passionate leitmotif of all his films. Not whether SRK, despite his 45 years age, managed to wow and charm the mickey of his zillion fans with his matchless, stylised body language and histrionics; not whether the two heroines, in their own respective ways, fleshed out their roles with the sense of abandon and sensitivity demanded and not whether the Gulzar-Rehman magic, the spectacular locales and canvas out-excelled Yash ji’s earlier efforts. Whatever happened to old-fashioned movie-going experience - the thrill starting from the time the lights dimmed, submitting to magical willful suspension of disbelief right through and returning satiated and enthralled?

Even up till a few years ago, life was different. Mainstream publications and TV channels did reviews. Hits were defined by Silver, Gold and Diamond jubilees, with dazzling, glamorous parties marking the occasion, with reports splashed across film mags. Details of daily/weekend/weekly/monthly collections were restricted strictly to the ‘trade magazines’. In recent times however, this Rs 100 crore disease has spread like a fungus and today, in crass, blatant and brazen manner, First day/Weekend/Weekly collections – real or fictional – are blitzed across mainstream and film publications with depressing regularity! Has the fun and enjoyment of going to the movies reduced to an IPO-watch? Have the merchants taken over from the mavericks and magicians?

Many heavyweights of B-town share this concern. Rajkumar Hirani (Director of Munnabhai and 3 Idiots) is extremely uncomfortable with this fact and articulates it in no uncertain times. He suspects it is a chilling sign of a consumerist and market-obsessed time when people are encouraged to know the price of everything and the value of nothing! “For God’s sake, it’s not an IPO but a film! Sure I understand and am concerned about the ROI factor, but for me audience appreciation is the key. People loving your film and recommending it to others remains a matchless high. For me, the shoe-string-budgeted Jane Bhi Do Yaro, made three decades ago, is way beyond any Rs 100 crore movie because even today it is remembered, loved and given cult status.” Both Anurag (Barfi) Basu and Kabir (Ek Tha Tiger) Khan agree. Basu – returning after a big budget disaster, Kites, admitted he was apprehensive about the commercial viability of his movie. “Transforming young, hot, popular, glam stars like Ranbir and Piryanka into sexless deaf-dumb-artistic creatures could be risky. The content, too, was anti-glam. Would the audiences respond to the soul to the film? I guess I got lucky! If you go with your heart, chances are, it will find another.” Kabir agrees. “You can’t sit down with the self-created agenda of writing a Rs 100 crore film! Stupid! You have to go with your sense of self-belief. I did exactly that for Ek Tha Tiger and God was kind. It worked.” And how!

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Source : IIPM Editorial, 2013.
An Initiative of IIPM, Malay Chaudhuri

and Arindam Chaudhuri (Renowned Management Guru and Economist).

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How deals between unequals surprisingly work

Professors James E. Austin and Herman B. “Dutch” Leonard, of Harvard Business School discuss whether the marriage of a “virtuous mouse” and a “wealthy elephant” work to the benefit of both

What happens when small iconic brands are acquired by large concerns – think Unilever. What happens when giant MNCs acquire relatively small companies that enjoy iconic status as socially progressive brands? Such marriages can be good for business and good for society. Tom’s of Maine acquired by Colgate, Stonyfield Farm Yogurt purchased by Danone, Ben & Jerry’s bought by Unilever, L’Oreal’s deal for The Body Shop, Cadbury Schweppes’ acquisition of Green and Black’s, and Coca Cola purchase of a significant interest in HonestTea are examples of such deals.

Q: According to you, a company that enters an M&A deal is either a “mouse” or an “elephant.” What are the characteristics of the two?

James Austin and Dutch Leonard (JA/DL): Actually, the key descriptor is not simply a difference in size but rather in kind. We are not referring to every small company, but only to those that have become social icons because an integral part of their distinctiveness and success is rooted in the social value that they bring to the marketplace. Hence our nomenclature refers to “virtuous mice.” And there are a lot of large companies attracted to these successful social icons, but not all “wealthy elephants” are capable of entering into a successful marriage with this special breed.

Q: Why is acquisition such an attractive strategy for the “mice”?

JA/DL: Compared to organic, self-funded growth, it can allow much more rapid scale-up – for example, through the ability to reach new markets faster, or through the ability to invest quickly in significantly expanded facilities. Compared to an IPO, it allows the careful delineation of accountability and performance. An IPO puts pressure on the social icon to perform. Through an agreement, a social icon can define with its acquirer terms of accountability for its performance that may be much better suited to what it is trying to accomplish. And, finally, a key virtue of acquisition from the perspective of the mice is that it may, if structured correctly, provide access to managerial systems and capabilities that are needed for going to and operating at scale that would take the social icon years to build. So structured correctly, an acquisition strategy can effectively marry the brand strength and “social technology” know-how of the icon with the access to capital and managerial capabilities of the acquirer. And that is why the search for a partner should be deliberate and careful.

Q: What is attractive about these arrangements from the perspective of the “elephants”?

JA/DL: Most successful large companies excel at business planning, allocation of capital, and execution. Many are also good at product innovation. But few are good at exploring significantly new ideas and radically different business approaches. Empirically, it is hard for these more novel ideas to compete inside large businesses in business planning and investment allocation processes against better defined, more traditional innovations. This implies that, if large companies want to get the benefits of these new products and the potential growth of these markets, acquisition may be the most effective route.

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Source : IIPM Editorial, 2013.
An Initiative of IIPM, Malay Chaudhuri

and Arindam Chaudhuri (Renowned Management Guru and Economist).

 

For More IIPM Info, Visit below mentioned IIPM articles

IIPM Global Exposure
IIPM Best B School India
IIPM B-School Detail
IIPM Links
IIPM : The B-School with a Human Face

BBA Institute