Mukta Arts: Searching for the right product depth.
© Prasad Kulkarni. Faculty, Sikkim Manipal University Bangalore
This Case
study is prepared in 2008.
A Mukta art is India’s well known Media Company managed by Mr.
Subhash Ghai. The company which started its operation in the Bollywood in the
year 1980 gave some of the block buster movies like Karz, Hero, Khalanayak,
Pardes and Taal. The company expanded their business from movie production to
film processing, broadcasting, and content development. The corporatization of
the film industry resulted in the extremely competitive environment. Companies
like ADLABS, Saregama, Pyramid saimira, PVR, UTV etc came out with innovative
strategies to lure Indian audience. In the past 2 years all these competitors
were able to produce blockbuster movies, but there is none from the Mukta arts1.
Filmy pundits in Bollywood however wondered that how this golden oldie missed
the bus.
The Film industry
Indian film industry has experienced
unprecedented growth in the previous decade. Bollywood movies ventured into the
new countries and put their footprints. The Indian film industry is worth of Rs
96 billion 2007 is expected to touch Rs 176 billion by 20102. The film industry is expected to grow at 24%
per annum. Of the total revenue three fourth of it comes from the domestic
market and rest from the overseas market. Overseas box offices collection
currently estimated at Rs 700 crore is expected to grow at 18%3. The
film industry is not depending on the box office collection alone they are
finding new vistas in the film music rights, copyrights for ring tones, gaming
content based on the movies, in film advertisements and events related to
movies. The top players in the media industry are given in the table 14. Table 1
|
Sl. No
|
Company
|
Net sales
(Rs in crore TTM)
|
Net profit
(Rs in crore TTM)
|
|
1
|
Adlabs Films
|
426.1
|
75.3
|
|
2
|
Balaji Telefilms
|
331.9
|
87.8
|
|
3
|
Mukta arts
|
95.4
|
17.9
|
|
4
|
Pyramid Saimira
|
380.5
|
42.1
|
|
5
|
PVR
|
196.6
|
16.1
|
|
6
|
Saregama India
|
123.8
|
13.5
|
|
7
|
Shree Asta vinayaka cine vision
|
78.5
|
15.4
|
|
8
|
UTV software
|
200.6
|
18.3
|
(TTM: Trailing twelve months)
Mukta arts: Subhash Ghai’s dream child.
Mukta Arts is currently in the business of production and distribution
of the movies. It generates the revenue form the issue and reissue of rights of
theoretical, audio, video, DVD viewing and satellite. As the internet became
the major media for promoting a movies and songs, Mukta arts realized the
importance of content development and content delivery. Therefore company
restructures itself into two major divisions; creation of contents and delivery
of contents.
Table
2: Mukta arts organization hierarchy5
Production of Movies/ Tele-serials and Music Albums: This division will be
looking after producing movies, Tele-serials and music albums. The budget
estimation will vary according to the need of the movie. Higher budget movies
are produced by the Mr. Subhash Ghai himself and the low budget movies are produced
by the other hired directors.
Expansion/Up gradation of Hardware Facilities: Mukta Art proposes to
upgrade its existing studio 'AUDEUS'. This will help company to provide its
facilities like generator, vans and other instruments to needed clients
Training Center: the company established whistling woods
international a training institute, which provides two year training in film
making. The training is given by renowned film directors like Ashutosh
Gourikar, Nagesh Kukanoor etc.
Film Distribution: The company has movie distribution wing
which undertakes the distribution of major banners and well known directors.
Web Casting and designing: The company created web portal
through which it broadcasts content movies and music albums. Mukta Arts also understood
the importance of the design in the film industry.
Malpix, the design studio, is the lifeline of Mukta Arts’ design and creative
representation offering the world a clear and consistent image of the company
and all its ventures – be it films or television. Masters in the use of color,
type, illustration, photography, printing techniques, multimedia and other
elements of design and production, Malpix boasts of an astounding expertise in
both technical and aesthetic aspects of communication.
Competitors’ analysis:
Adlabs: One
of the prominent entertainment companies in India entertainment industry has
presence in almost all parts of film value chain. The company has seven
strategic units; film processing and services, film production, distribution,
television content production, film exhibition through multiplexes, publishing
of home videos and FM radio. In the year 2007-08 company released Johnny gaddar
and Namastey London, both were huge hit. Company is planning to release its
Singh is King and Sultan The warriors.
Balaji Telefilms: The pioneer in television content has huge plans to expand its presence
to film industry too. Company has signed up four prominent directors- Abbas-
Mastan, Apoorva Lakhita, Rohit shetty and Tigamanshu Dhulia for its fourth coming
production slates. Balaji team is planning to release Kya kool hai hum 2,
Mission Istanbul and C Company.
Pyramid Saimira: Company is a pioneer in the developing single screen theaters,
setting up an exhibition network and film processing. Company’s release Halla
Bol has done reasonably well.
Saregama:
One of the largest content copyright holders in the Indian market. Company is
into the Producing the film and publishing the content. Saregama’s revenue
comes from newer areas like internet streaming and mobile ringtones.
Shree Ashtavinayaka Cine vision: No body understood the Bollywood like this company in the last
year. Company’s two releases Partner and Jab We Met were runaway hit. It also
has a presence in the film exhibition. Currently it is having 30 single screen
theatres in its fold.
UTV software: The Company which produced Rang De Basanti did not live up to its
expectations in the year 2007-08. It released the Namesake, Life in a metro and
Dhan Dhanadan Goal and all the three were able to score above average. Recent
release Jodha Akbar which had superstars like Hritik and Aishwarya Rai, unable
to convince the audience. However the latest release ‘race’ is doing well in
the box office.
Product depth problems
Mukta arts Product mix consists three important product lines; movie
distribution, movie production and training. In movie production product line,
Mukta arts produced some of the wonderful movies like Karz, Hero, Ram Lakhan,
Saudagar, Khalanayak, Pardseh, and Taal. However the movies released in recent
time like Joggers park, Kisna, Bombay to Bangkok and Black and
white did not live up to the expectations. ‘36 china town’ and ‘Iqbal’
are the only two which were able to recover the amount invested. The results of their movies have created the
doubt in the minds of the employees. . Low budget movies like Iqbal and Joggers
Park were able to recover their cost while Kisna was a major debacle6.
Does it mean that low budget movies are bigger bet to Mukta? Somewhere down the
line, think tank decided to concentrate on releasing the regional language
movies. Films like khande pohe and valu were released in Marathi. Both the
films did extremely well in the box office. Does it mean Mukta should consider
more regional movies or mainstream movies? These questions will have their
repercussions on the image of the company and stakeholders response in the
stock market.
Considering this company divided its film production into two divisions.
Mukta arts will focus on developing the big budget movies in the Hindi and
Malpix division will concentrate on the regional language movies. According to
Ravi gupta CEO of Mukta arts, company will focus on the big budget movies7
but company’s top earning movies this year are Iqbal and Joggers Park which are
low budget movies and big budget movie like Kisna bombed in the box office.
‘The film Kisna was 1920 year old story and younger generation did not accept
it’ said subhash ghai 8.
However Jodha Akbar which based on the mogul emperor did well in the box
office. Mukta arts could not find right solutions at the moment and waiting for
a big hit. Stake holders are still intact with company because it earns the
revenue through reissuing the rights and distribution. There lies unresolved
question how long such initiative will sustain company’s bottom line.
Discussion questions:
1. is it right on the part of Mukta arts to focus on all the streams
of movie or just to focus on their core strength film production?
2. Should Mukta have movies in regional as well as Hindi languages?
3. Do you think that product (movies) have a right attribute to expect
the acceptance of the consumer?
4. Suggest type of Products Company needs to revitalize the Mukta
business.
Reference
1.
Niren Shah Business standard, January 21 2008.
2.
Economic times, 1st June 2008.
3. Frames
2007, FICCI- PwC report on Indian entertainment industry.
5. Daily corporate news analysis, KRC research, www.krchoksey.com
6.
Ghai, guts and glory, Economic times, 17th September 2006.
7.
Interview with Ravi gupta, www.indiatelevision.com 10th December 2007
8. I
thought kisna will be a big hit – Rediff news 6th March 2008
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