Topic started by Are Yaar (@ 188.8.131.52) on Thu Oct 10 08:44:25 EDT 2002.
All times in EST +10:30 for IST.
For many days, I felt that I should have a thread to share some of the articles about ARR in desi and international press and website. I intend to start this thread and expect others also to post some articles about ARR here.
- From: Are Yaar (@ 184.108.40.206)
on: Thu Oct 10 08:45:12 EDT 2002
AirTel, dil se
The service provider’s lavish new campaign starring music composer A R
Rahman hopes to engage with consumers at a more emotional level as it
expands into new circles
In an airport lounge, a child playing his harmonica throws a tantrum.
Enter India’s acclaimed music composer A R Rahman (of Roja, Dil Se,
Taal and, more recently, Lagaan fame). The musician walks up to the
boy, takes his harmonica and plays a tune to placate him. That begins
the artiste’s tryst with a new composition. His companion likes the
sketchy tune he plays and requests a full-fledged symphony.
So even as Rahman is on the move, seemingly across the globe, he adds
to the basic tune along the way from various musicians he meets.
Finally, he seeks the help of a street band to play his composition
which is relayed to his partner back in the studio. All this sharing of
music happens unobtrusively through a cellphone or, more importantly,
through an AirTel network.
For Bharti Tele-Ventures, this new campaign for its cellular brand
AirTel, which broke on national TV last fortnight, represents a casting
coup of sorts. It marks a debut for Rahman — who is known to have sold
more albums than Madonna and Britney Spears put together — in an
advertising feature film.
The campaign is intended to deliver AirTel’s new positioning, “Live
Every Moment”, which began four months ago.
The repositioning is dictated by Bharti’s need to transform its “cold
and aloof power brand” into a more humane one as the company, which is
currently present in nine circles, has acquired licences to expand
operations to 15 circles.
According to Bharti’s director (marketing) Hemant Sachdev, the brand
was associated with the CEOs. “However, the fact is that the
fastest-growing market is the 15 to 25 age group consumer in the
socio-economic category (SEC) B,” he points out.
The starting point of the exercise was to alter the logo to give it a
younger look — the logo now has sleeker lines and red has been added to
the staid black. Even its new baseline “Live Every Moment” is a
complete change from its earlier positioning, “Touch Tomorrow”. “Live
Every Moment” was the result from research in which consumers said they
felt nice about their mobile phones.
Contrast this with the earlier studies where the consumers either said
that mobile phones were good for business or for emergencies. “We
decided to catch that sentiment in our new positioning. Today, AirTel
symbolises the freedom to express whatever you want, whenever and
wherever. It could be a song, an idea or a joke,” Sachdev explains.
It was this sentiment that needed to be carried forward though a
national campaign that followed AirTel’s roll-out in the new states of
Maharashtra, Mumbai and Gujarat recently. “As we grew to a 15-circle
telecom network, we wanted to become generic to mobility in the
country,” Sachdev explains. The aim was to connect emotionally with the
That its arch rival Hutch has also been making a high-decibel noise in
different circles may have been a reason too. Hutch, however, primarily
depends on outdoor advertising because it exists under different brand
names in different circles limiting the usefulness of a national TV
campaign. Predictably, Bharti officials dismiss any correlation between
AirTel’s new campaign and Hutch’s increasing ad spends.
According to industry estimates, AirTel spends Rs 100 crore on
advertising in all its circles while rival Hutch spends close to Rs 40
crore on the Orange brand in Mumbai alone.
It was against this backdrop that Rediffusion DY&R, the advertising
agency for Airtel, got the mandate to create the new campaign. The key
elements to be reflected in the campaign were “spontaneity”, “sound
clarity” and “immediate sharing”. “When we explored the idea of
‘spontaneity’ we looked at the performing arts and selected music.
Music has a direct connect with the heart and is all about sound,” says
Gullu Sen, national creative director at Rediffusion.
Of course, the going wasn’t easy for Sen and his team. Sachdev proved
hard to please. “He liked many of our ideas and scripts but continued
to push us for one big idea,” says Sen. Till he saw the script
featuring A R Rahman. “It must have been the 300th script we showed
Sachdev who finally gave his nod,” Sen adds.
Both Sachdev and Sen are quick to clarify, however, that the commercial
was not launched purely on gut-feel. The marketing director’s nod was
followed by an intensive eight-city research that indicated that the
campaign would go down well with the consumer.
However, just when Rediffusion and Bharti were ready to pat themselves
on the backs, they realised that the campaign had been designed without
even asking Rahman if he would agree to do the film. The fear that the
busy music director may refuse was not unfounded as he is known to have
turn down brand endorsement/association offers from some of the
best-known companies (including the soft drink giants, it is said).
But Bharti did not have to try very hard. When Sachdev and Sen flew to
London for a 15-minute meeting with the composer, he was clearly told
that he was not being approached to be the brand ambassador of AirTel.
“We were very clear that his mug would not be on every paan shop and he
would not indulge in any product-speak,” says Sachdev. The film script
presented him as a character in the film where he plays himself and
does what he does best: create music.
But what would the campaign strategy have been if Rahman had refused?
Would AirTel have used any other musician? “We would not have executed
this particular idea with any other musician or even a model. If he
refused we had other ideas we could have filmed,” says Sen. He does
not, however, vouchsafe information on the alternatives. “We may still
do those films,” he says since the contract with Rahman is only for one
There is a distinct reason for using Rahman in the film. He is a young
music composer who is popular with the masses and is still highly
regarded among connoisseurs for his creativity. “To our mind he was the
perfect brand fit for AirTel as ‘leader-innovator’ and as someone who
reinforces the ‘Indian-International’ dimension of the brand,” says
Also, there is an honesty about the film as in real life too, Rahman is
a mobile musician. He not only shuttles between his two homes in
Chennai and London (where the film has been shot), but globe-trots for
In fact, all the other characters in the film are his real life
associates too. The companion is Chris Nightingale, the orchestra
conductor of Bombay Dreams, the musical play staged in the UK for which
Rahman wrote the music. The man in the studio to whom he relays his
composition over the cellphone is his close associate Deepak Gattani.
“There is nothing pretentious about the film. It is synergistic with
Rahman’s affability too,” Sen points out.
The interesting point is that the music director is also busy composing
five new ringer tones for AirTel subscribers. He has also agreed to
write music for the new campaigns from the company’s stable.
On the campaign, however, only subscriber numbers will tell if AirTel
has managed to touch consumer’s hearts.
- From: Are Yaar (@ 220.127.116.11)
on: Thu Oct 10 08:45:44 EDT 2002
VCs foray into Bollywood with Rs 400-cr fund
TIMES NEWS NETWORK [ TUESDAY, OCTOBER 08, 2002 06:19:49 PM]
NEW DELHI: Bobby Bedi's Kaleidoscope Entertainment, a company
associated with movies like Bandit Queen and Fire, is not just another
film-production company. It marks the first foray by Indian software
venture capitalists into Bollywood's dream factory.
Bobby Bedi has teamed up with Saurabh Srivastava, chairman, Infinity
Ventures, a venture capital fund, US-based technology investor Kanwal
Rekhi and Pradeep Gupta, managing director, Cyber Media India,
publisher of technology magazines, to chalk out a blue print for a Rs
400 crore-foray into the entertainment sector, spread over the next
With a business plan vetted by corporate law firm Amarchand Mangaldas
and Ernst& Young, the group plans to produce and co-produce 10 to 12 -
small, medium and big budget - movies each year.
"The idea behind the fund is to make a pool of movies targetted at
Indian and foreign markets. The involvement of VCs would help to bring
in their experience and success in the Silicon Valley to the
entertainment industry," said Bobby Bedi, managing director,
Kaleidoscope Entertainment, who founded the
company in early Eighties.
For Saurabh Srivastava, an IT entrepreneur, the challenge for any VC
would be to adopt global best practices to be used as benchmarks in the
Indian film industry. Srivastava feels that, in the long run, funding
of movies would not be much different than that of funding software
ventures. "Just like any VC funding in the software sector, we have to
factor in the element of failure," he said.
The effort would also help to internationalise Indian flims as the
movies would be made with a set audience in mind, pointed out Gupta.
As a part of its corporatisation drive, Kaleidoscope has tied up with
Yash Raj Films to market and distribute its movies. The new venture has
strategic investments from Gujarat Flurochemicals, promoters of the
Inox chain of multiplexes.
With any VC involvement, exit strategies would not be far off.
According to Srivastava the company would look for an initial public
offer only after three years.
"We need to have a body of good work behind us with a good track record
as a company before we go in for any IPO," he said. To start with, the
company has been set up with an equity base of around Rs 30 crore.
Future funding of projects would primarily come through expanded equity
base and internal accruals
The first project to get off-the-block, Saathiya, a Vivek Oberio, Rani
Mukherjee-starrer, is likely to hit the big screen latter this month.
Kaleidoscope has also roped in well-known directors like Mani Ratnam
and Ketan Mehta for specific projects. Mehta would co-produce (along
with Kaleidoscope) and direct The Rising, a film about the start of the
Sepoy Mutiny. With Aamir Khan set to play the role of Mangal Pandey,
the movie with an international star cast would go under production
early next year.
Kaleidoscope Entertainment has joined hands with Mani Ratnam to form
another production company, Crossover Movies. Ratnam is currently
working on the script for an international film based on Humprey
Hawksley's novel Dragonfire to be produced under the new banner.
Farrukh Dhondhy, formerly with Channel 4 TV, UK, has joined the group
as commissioning editor.
Bedi said that the company has set up a separate division to make
television software and commercials.
- From: Are Yaar (@ 18.104.22.168)
on: Thu Oct 10 08:46:53 EDT 2002
one more..that's it for now.
The reel story of the music industry's crisis
Film music rights prices are crashing. That's because music companies
fought bitterly to snare the rights to the music from blockbuster
films, paying huge sums — and got scorched, report Surajeet Das Gupta &
Last year Saregama HMV Ltd, the music company, beat competitors to the
music rights to what it thought would be blockbusters ---- Rajshri
Production's "Mein To Deewani" and Rakesh Roshan's ''Koi Mil Gaya" ----
by forking out about Rs 9 crore. Both films had saleable stars like
Hritik Roshan, Kareena Kapoor and Abhishek Bachchan. Their box office
fortunes were more or less assured. Or so it seemed.
But Hritik Roshan’s movies this year bombed at the box office and
Bachchan has been struggling to get a hit. Meanwhile, Saregama HMV's
losses mounted to over Rs 25 crore after many of its film albums
So Saregama HMV is now hitting a new note --- it has already served
notice on the two producers asking them to cut prices by 40 per cent to
50 per cent. If they don't, it may back out from the deal.
A senior executive of the company confirmed that it was re-negotiating
the agreements downward, but declined to provide details. After over
two years of unbridled competition which saw prices of Hindi film music
rights hit the roof, music companies are making the first tentative
moves to get back on track.
Exorbitant music rights prices are out, realistic rates are in. In the
last six to eight months, music rights prices have fallen by 50 per
cent to 60 per cent -- and are still sliding. And in the same period no
music company has paid more than Rs 1.5 crore for music rights --- a
far cry from the Rs 12.5 crore paid for the rights to the music of
"Devdas" (released this year) or the over Rs 12 crore for the rights to
the music from "Kabhie Khushi, Kabhie Gham," the 2001 blockbuster.
The music industry is a highly secretive one and music companies are
unwilling to divulge figures in many cases. But analysts who track the
industry say that music rights for films like "Dil Vil Pyaar Vyaar" and
"Paanch" which have hit the market have been sold for under Rs 75 lakh.
Says Sridhar Subramanian, managing director of Sony Music India: "The
rights to Hindi film music are becoming far more realistic. Music
companies are getting to know what they are buying and putting a value
to it rather than making blind bids and pitches."
Agrees Mukesh Desai, CEO of Super Cassettes, which sells music under
the T-series brand name: "We are going through a transition phase.
Prices will be get more realistic in the coming months and years."
If prices are crashing, it's because music companies fought bitterly to
snare the rights to the music from blockbuster films, paying huge sums
-- and got scorched. According to a study by JM Morgan Stanley, many
companies like Time Audio, Ultra Music and Archies Music have either
closed shop or are not as active as they were earlier.
Many music companies, some of which are publicly listed, are bleeding.
Tips Industries incurred a total loss of Rs 19.79 crore in 2001-2002.
And in the quarter ending in June 2002, it incurred a loss of Rs 2.78
crore. During this quarter, the company wrote off the audio rights to
film titles worth Rs 5.61 crore.
What is more, an Anderson-Federation of Indian Chambers of Commerce and
Industry study makes the point that a music company that bought the
rights to "Kabhie Khushi, Kabhie Gham" music was unable to recover the
Rs 12 crore it paid. The study says that the music company had to sell
6.9 million cassettes to break even (assuming that the profit margin on
every cassette sold is Rs 20). But it sold only 4.8 million cassettes
(many in the industry question this though and say that that the music
company made money).
And Universal Music, according to industry men, sold over 20 lakh
cassettes of the film "Devdas"' music but was not able to earn a profit
Says Komal Nahata, a trade analyst in Mumbai: "Because of the high
price (Rs 12.5 crore) at which it bought the music rights, it had to
sell over 50 lakh cassettes to break even. This it could not."
Universal executives were not available for comment.
In short, even if a film is a box office hit, the film's music need not
necessarily make a lot of money. As a result, some companies aren't
buying film music rights at all. Industry biggie Tips Industries’
chairman and managing director Kumar S Taurani Says: "We have not
purchased any new titles in the last six or seven months."
Indeed, in a bid to hedge risks and cut the chances of losing money,
music companies are trying out several new strategies.
Gambit one: market niche cinema music albums. For example, an album may
have a compilation of Hindi film songs from several films which have
been hits. To cite one case, Sony Music and Saregama have tied up for
two albums, 'Nikhama Top 10' and 'Sharara Top 10.' Says trade analyst
Amod Mehra: "In all top music shops in Mumbai, both these titles are
among the top 10 titles."
Gambit two is the one that's used worldwide: don't buy music rights
upfront. Instead, traverse down the less riskier minimum
guarantee-cum-royalty route to buy music. Here, the risks are spread
between the music company as well as the producer. If the music is a
hit, both benefit; if not, both lose.
Venus Records and Tapes, for example, bought the music rights to
'Talash' on a royalty basis from producer Pehlaj Nihalani. Explains
Jeetu Jain, the director who handles all India sales for Venus Records:
"We acquired the rights after paying a minimum guarantee for 800,000
cassettes. After we recover our expenditure on these, we will pay a
royalty to the producer for each additional cassette sold over and
above these 800,000 cassettes."
With music companies starting to drive hard bargains, film producers
are being forced to look at newer ways of recovering their costs. Some
like Vashu Bhagnani, producer of "Jeena Sirf Mere Liye," are setting up
their own music labels. Bhagnani launched Pooja Music to distribute
music, apparently because he was offered a low price for the music
rights to "Jeena Sirf Mere Liye."
Bhagnani himself says: "I launched a music company because I am sure
the business of music will improve sometime now." But Bhagnani had
signed a Rs 25 crore agreement with Saregama HMV for the music rights
to seven of his films. With three of his films flopping in the box
office, Saregama executives say they are now renegotiating the deal
Bhagnani says diplomatically : "My relationship with HMV Saregama has
been very good. After taking a big loss, HMV suggested that I start my
own music company through which I can release the music of my films."
Not everyone is that lucky. Producer J P Dutta who has been hawking the
rights to the Anu Mallick composed music of his new film, Line of
Control (LOC), has still not found a buyer. Several attempts to speak
to J P Dutta proved futile: he was unavailable for comment.
Even A R Rahman's magic is not working. Saregama initially committed Rs
4.5 crore to buy the music rights to "Saathiya," a joint venture
between Yash Chopra and Mani Ratnam, with music by A R Rahman. But the
music company confirms that it is renegotiating the price with the
producers. Industry men think that Saregama HMV is not willing to fork
out more than Rs 1.5 crore.
Still, music company executives have a point when they argue that
they're not to blame for their plight ---- there haven't been too many
big film hits in recent times.
Says Taurani: "The prices of music rights have gone down largely
because the quality of film music has gone down." The numbers back his
statement. In the last one year, as many as 200 Hindi films were
released. Yet the music of only four or five set the sales registers
Indeed, sales of music compact discs and cassettes in the Rs 1,200
crore music business fell by over 20 per cent in the last six months
over last year. And 67 per cent of the industry's revenues come from
selling film music.
Industry experts also point out that the crises in the music business
has been prompted by over zealous producers looking for big bucks. Says
Amit Khanna, chairman of Reliance Entertainment: "I think the high
rates at which music rights were sold are an aberration. Producers were
recovering 20 per cent to 30 per cent of their costs from selling film
music rights. That is unsustainable. Now they are back to five per cent
to 10 per cent. That is realistic."
Nor has the industry been able to respond to the challenges posed by a
changing marketplace. New forms of entertainment -- video games,
internet surfing -- have sprung up and compete with music for the young
But with their backs to the wall, music companies are finally waking
up. They're slashing CD and cassette prices. Tips has priced CDs at Rs
95 for music from new films, and charges Rs 75 for music compilations,
more than half of the earlier Rs 225-Rs 275 it charged a year ago.
Venus Records too has slashed its CD rates to Rs 99 from Rs 250-Rs 275.
Audio cassette prices have fallen to Rs 40-Rs 45 from the earlier Rs 55
As a result, says Abhik Mitra, managing director of Saregama HMV:
"While per unit realisation is low, the gross unit realisation has gone
up two times (close to between 60-68 per cent). And we have seen growth
The industry may be singing a dirge about film music. But at the end of
the day, music companies can ignore it only at their peril. Says Mukesh
Desai of Super Cassettes Industries: "Ultimately it is film music that
appeals to audiences and mass listeners of music."
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