Reliance MediaWorks aims for global domination
Scale comes naturally to Ambani Junior and his crack team at Reliance MediaWorks. Their strategy is to build a company that will dominate the global film and media services’ value chain. While searing growth has pulled down profits and increased the debt burden in the past two years, the company is confident of making it to the big league.
There was a huge surprise in store for Amitabh Bachchan, Abhishek, Aishwarya, Shahrukh Khan, Hrithik and almost all of Bollywood who attended Anil and Tina Ambani’s party last month at the Grand Hyatt — the guest list for that night included Steven Spielberg, Nicolas Cage and Julia Roberts among other Hollywood hotties.
The only difference was none of them really got to ‘rub’ shoulders with their Western peers, because though Cage and Roberts joined Bachchan and his colleagues in “wishing Anil and Tina all the best” they could only convey their wishes via audio visuals played out on big screens. Hollywood and Bollywood, two of the globe’s biggest film industries sharing one stage, popping champagne together — it definitely doesn’t get bigger than this in the world of cinema.
The seeds of the success were sown five years ago, when Anil Ambani bought a controlling stake (66%) in Manmohan Shetty’s blue-chip company, Adlabs. He shelled out big money— Rs 366 crore — unheard of in the Indian entertainment business till then. The aim was clearly global and to gain a firm foothold across all verticals of this business while being language agnostic.
Scale was important as was speed, so Reliance Big Entertainment would do films, music, radio (since last year), digital, gaming, home video and home rentals, while the rest was all Adlabs business. The scale to this business came when Anil Ambani acquired 50% in none other than Steven Spielberg’s Dreamworks and also struck a series of deals with stars including Hollywood stars Brad Pitt, Jim Carrey, Julia Roberts and George Clooney for a first look at developing their company’s films.
On the other hand, Adlabs, Shetty’s blue- chip company had stood solid on its lab and processing business as well as some contribution coming from the multiplex boom he pioneered in Mumbai.
In five years, Adlabs has metamorphosed into Reliance Mediaworks , (RMW) and the only thing Shetty (who still has a 4.7% share in the company) would find familiar at his office in Film City is the ‘Adlabs’ name embroidered into each red covered seat of the mini theatre at the lab. Nothing else is the same.
To begin with RMW, no longer makes films, though it does hold the IPRs of several films. From a Rs 98 crore turnover and 494 employees in 2005, the company has scaled to Rs 511 crore and 5,900 employees.
“Coming in from the world of project finance to films I had no clue that there is much method in the chaos in this business, it’s very entreperenural and scalable as well,” says CEO, RMW, Anil Arjun, who was with Reliance Capital and ICICI earlier.
Scale is something which was a must for Ambani junior — they had to be the “game changers” in this business. The flip side was growth brought along debt and an interest burden, pulling the bottomline down at RMW (the only listed entertainment entity).
Yet Arjun, for whom number-crunching comes easily, is not worried about the downward arrows on the share price or the losses they have been posting for two years. He is confident this year things will change, with radio demerged from this year and film production excluded as well, profits and fortunes will turn.
There was a huge surprise in store for Amitabh Bachchan, Abhishek, Aishwarya, Shahrukh Khan, Hrithik and almost all of Bollywood who attended Anil and Tina Ambani’s party last month at the Grand Hyatt — the guest list for that night included Steven Spielberg, Nicolas Cage and Julia Roberts among other Hollywood hotties.
The only difference was none of them really got to ‘rub’ shoulders with their Western peers, because though Cage and Roberts joined Bachchan and his colleagues in “wishing Anil and Tina all the best” they could only convey their wishes via audio visuals played out on big screens. Hollywood and Bollywood, two of the globe’s biggest film industries sharing one stage, popping champagne together — it definitely doesn’t get bigger than this in the world of cinema.
The seeds of the success were sown five years ago, when Anil Ambani bought a controlling stake (66%) in Manmohan Shetty’s blue-chip company, Adlabs. He shelled out big money— Rs 366 crore — unheard of in the Indian entertainment business till then. The aim was clearly global and to gain a firm foothold across all verticals of this business while being language agnostic.
Scale was important as was speed, so Reliance Big Entertainment would do films, music, radio (since last year), digital, gaming, home video and home rentals, while the rest was all Adlabs business. The scale to this business came when Anil Ambani acquired 50% in none other than Steven Spielberg’s Dreamworks and also struck a series of deals with stars including Hollywood stars Brad Pitt, Jim Carrey, Julia Roberts and George Clooney for a first look at developing their company’s films.
On the other hand, Adlabs, Shetty’s blue- chip company had stood solid on its lab and processing business as well as some contribution coming from the multiplex boom he pioneered in Mumbai.
In five years, Adlabs has metamorphosed into Reliance Mediaworks , (RMW) and the only thing Shetty (who still has a 4.7% share in the company) would find familiar at his office in Film City is the ‘Adlabs’ name embroidered into each red covered seat of the mini theatre at the lab. Nothing else is the same.
To begin with RMW, no longer makes films, though it does hold the IPRs of several films. From a Rs 98 crore turnover and 494 employees in 2005, the company has scaled to Rs 511 crore and 5,900 employees.
“Coming in from the world of project finance to films I had no clue that there is much method in the chaos in this business, it’s very entreperenural and scalable as well,” says CEO, RMW, Anil Arjun, who was with Reliance Capital and ICICI earlier.
Scale is something which was a must for Ambani junior — they had to be the “game changers” in this business. The flip side was growth brought along debt and an interest burden, pulling the bottomline down at RMW (the only listed entertainment entity).
Yet Arjun, for whom number-crunching comes easily, is not worried about the downward arrows on the share price or the losses they have been posting for two years. He is confident this year things will change, with radio demerged from this year and film production excluded as well, profits and fortunes will turn.
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