Ronnie Screwvala

October 2008

In July, UTV Motion Pictures cracked the list of the top 20 film distributors in the U.S., thanks to the success of its hit Bollywood feature films. The studio, a division of the Mumbai-based UTV Software Communications, has also expanded into Hollywood, teaming with M. Night Shyamalan on The Happening and with Mira Nair on The Namesake. Boosting the international business at UTV is a key priority for the company’s CEO, Ronnie Screwvala. Dubbed Bollywood’s answer to Hollywood studio legend Jack Warner, Screwvala was recently named one of the 21st century’s most influential people by Esquire magazine. He has built UTV into an integrated media company that is involved in animation and drama production, cable and satellite broadcasting with a suite of channels, gaming and new media. A leading player in the Indian market, UTV recently attracted the interest of The Walt Disney Company, which acquired a 32.1-percent stake in it.

TV ASIA PACIFIC: How did your alliance with Disney come about?

SCREWVALA: It started with a phone call. They were interested in partnering with us in the kids’ broadcasting space, since we [with Hungama TV] had moved into the number one position, overtaking Cartoon Network, Nickelodeon and Disney [in the Indian market]. We have strengthened the alliance, with them acquiring the kids’ channel, making a small investment into UTV at 14 percent, and then more recently they increased their stake to 32 percent. I think for Disney, the integrated model of UTV across its five [business segments] is very unique for this part of Asia.

TV ASIA PACIFIC: You are said to have taken a revolutionary approach to movie production in India. What have been your key strategies?

SCREWVALA: We entered this segment five years ago. The motion-picture industry in India is more than 100 years old. We entered it only at a time when we thought we could bring about some change. This in no way implies that the present models and genres have a problem. Quite to the contrary—they still remain popular for the mass audiences in India and globally. We were aiming to look at “young India” and analyzing what content they were looking for. We were fortunate enough to work with an entirely new generation of directors and actors and talent that were committed to creating new content. Whether we liked it or not, it was evident from our research that the core audience, i.e., 16 to 35, was looking for an overall change in the content, so I think we entered at the right time.

One of our other contributions has been to evolve the studio model. For us, the studio model establishes the need to plan ahead and build an entire slate of movies two to three years in advance, and also to put a lot more attention into marketing and distribution. Previously, not more than 5 percent of the cost of production of a movie was spent on marketing. I think the very first movie where almost 40 percent of the cost of production was spent on marketing was one of our first releases in India. Since then, marketing budgets have been on the increase.

TV ASIA PACIFIC: You’ve made gains in Hollywood with The Namesake and The Happening. What are your other plans for the U.S. market?

SCREWVALA: Our foray into English-language movies started really with building relationships and alliances with some of the most talented directors. [We spoke to] Mira Nair about doing something together and when she was keen to do The Namesake we thought it was an ideal way to start our relationship, and then we went to Fox for the studio backing. Similarly, in the case of The Happening, the initial relationship started with M. Night Shyamalan and UTV and then his agents approached Fox as the other partner. Our interest in English-language cinema will be on a movie-to-movie basis, as we don’t have a clear strategy of us “landing” in Hollywood.

TV ASIA PACIFIC: How is your channel business progressing? What additional services are you looking to launch?

SCREWVALA: In the general-entertainment space, there are going to be no clear winners [with numerous channels fighting for the number one spot]. So we’ve chosen [to focus on niche markets]. Number one is the youth segment, which is the core group of 16 to 30. When we launched the kids’ channel, which we then sold to Disney, our focus was 4 to 14. So the natural corollary for us [for the next channel, Bindass] was to look at the 16-to-30 age group. That’s the [market] in which we want to have an iconic position. It’s not just a channel—we want to build a youth brand in India.

The second is the movies space, and for that we’ve got a unique offering. With our World Movies channel, it’s everything but Hollywood and Bollywood. With Bindass Movies, it’s the best of Hollywood dubbed into Indian languages. Bindass Movies does better than HBO and STAR Movies in India now. It’s the number one Hollywood channel in India. And the third one is our Hindi movies channel, which we wouldn’t have launched if we didn’t have our own studio model. Frankly, for advertisers and subscribers, it’s quite unique.

The third space is English business news, in direct competition with CNBC, which has, as the first mover, the lion’s share [of the market]. There hasn’t been much competition there. In an emerging economy like India, people look to a business channel not just for [market data]. They also want to understand the dynamics of the business. We want this very large fold of entrepreneurs to be as much viewers of this channel as the people who are interested in it just for the ticker.

TV ASIA PACIFIC: What’s in store for India’s increasingly crowded channels landscape?

SCREWVALA: In the broadcasting space, India has grown exponentially. The interesting part is that while it does appear very crowded, and at latest count there were almost 400 channels beaming into India, there is a fair amount of segmentation that has taken place. Also interesting to know is that in the last 15 years since the advent of satellite television in India, not many of the channels have shut down, which means that a business model continues to evolve. India is still a market where 80 percent of the revenues for broadcasting come from advertising and only 20 percent from pay TV. In that context, we have a very nascent pay model, and yet you’ve got 400 channels being supported mostly by advertising. Because the broadcasting environment here has grown up the tough way, when the pay model comes in, the [potential] will be tremendous.

TV ASIA PACIFIC: A number of international producers outsource animation projects to India. How are you positioning your animation business?

SCREWVALA: In animation, as in everything else, we have moved out of the outsource, servicing business. True brands and global companies really get created when you are in control of your own destiny, at the top end of the value chain, and in direct touch with your consumer. In animation, we understand this place very well, having built one of the first animation studios in the country. But we believe there is much more value for the company and its shareholders to create [content] in the animation space than to be a work for hire in a very competitive environment. Therefore, we have completely transformed our studio to make three movies, and we believe that when these get released, in ’09, they will set a new benchmark for animation quality coming out of India.

TV ASIA PACIFIC: You’ve committed to setting aside $75 million for investments in the gaming sector. How are you planning to use these funds?

SCREWVALA: One, to make an investment into online. Two, from India-games.com, to expand the mobile story outside of India, so we’re [acquiring 80 percent of True Games Interactive] in the States. The third is to consolidate our shareholding in Ignition [a console game developer in the U.K.], which we bought last year, from 70 percent to 95 percent. And the fourth, at Ignition, we’re generating three very high-end console games at three computer-graphics facilities that we’ve created, in London, Florida and Tokyo.

TV ASIA PACIFIC: You’ve been involved in the Indian media industry for some time now. What are the greatest changes you’ve witnessed over the last few years?

SCREWVALA: The younger generation in India has determined a new order on how they will consume content, and that has completely opened up the market, and at the same time set back a lot of conventional thinkers, as “young India” wants to consume very different genres of content, and on different platforms.

The second shift really has been that the consumer has started to pay for content. That was not the case more than half a decade ago where you could watch television or movies in substandard quality and pirated [copies]. All that has changed, for the better. I still think we are less than halfway there in paying for content, but it’s been a good start.

The uniqueness of India is that it is going to be a very high-growth domestic market plus it’s going to be an excellent hub for growth in Asia. Some Indian companies understand working the Western model almost as well as the Western companies. I think, therefore, we would be able to grow exponentially in size and footprint.