‘Increase in DVD hardware penetration, better marketing & distribution to drive home video revenue in India’ – BIG Music & Home Entertainment CEO Kulmeet Makkar

    BIG Music & Home Entertainment CEO Kulmeet Makkar
    BIG Music & Home Entertainment CEO Kulmeet Makkar

    BIG Music & Home Entertainment CEO Kulmeet Makkar
    BIG Music & Home Entertainment CEO Kulmeet Makkar
    BIG Music & Home Entertainment CEO Kulmeet Makkar
    BIG Music & Home Entertainment CEO Kulmeet Makkar
    BIG Music & Home Entertainment CEO Kulmeet Makkar
    BIG Music & Home Entertainment CEO Kulmeet Makkar
    BIG Music & Home Entertainment CEO Kulmeet Makkar
    BIG Music & Home Entertainment CEO Kulmeet Makkar

    After serving the music industry for 18 years, Kulmeet Makkar has left no tune unheard.

    He has worked for 18 years with India’s 100+ years old music company – Saregama and is now spearheading music and home entertainment for Reliance ADAG.

    In this interview with Businessofcinema.com, BIG Music and Home Video CEO Kulmeet Makkar holds forth on BIG Music and Home Entertainment’s current market share, expansion plans, new and unrevealed business verticals and more… 

    Within a year and a half of setting up BIG as a new company in the music and home entertainment sector, it already has 60 per cent market share in home video of Hollywood movies. How was this achieved?
    Firstly, our obvious strength is the Reliance group, which gives us the ability to create synergies and an unparalleled distribution network. Secondly, since we have known and worked with these studios in the past the relations helped. Thirdly, our positioning as a premium content company has played a great role as we believe in premium packaging keeping in mind Studio’s brand image. 
    We signed Universal in September last year and Warner Bros took a while to come on board because they were monitoring our growth and reach. Since the very beginning, our objective was to set up a distribution system first and not chase content. No other company except Saregama and Moser Baer to a certain extent can boast of such a vast distribution system.
    You have taken from Saregama not only its people, but also its business. Moreover you too were in Saregama before spearheading BIG. What is the reason for these moves?
    It was the choice of Hollywood studios to license their home video to us. They preferred dealing with us because of Group’s vision and long term strategy. We, at BIG, realize that the home video market can grow significantly if Hollywood content is localized and dubbed to expand its reach, so all major titles from Universal’s were dubbed and their turnover has more than doubled this year.
    Moreover, we are not a music label like Saregama, for them home video was just a value add. We set up BIG as a home entertainment company and the physical distribution network we created in the last one year is for home entertainment, which is not dependent on the music business. Our distribution focus for music is on digital and not physical, because people no longer listen to music on physical format (audio cassette, audio CD) like earlier.
    Apart from music and home entertainment, which other business verticals are you looking at for expansion?
    We are looking at starting BIG Talent and Big Music Publishing as separate and new business verticals. Under BIG Talent we are looking at signing up performers like singers, dancers, emcees, DJs, VJs, RJs, TV and film actors etc. and building them as brands. Under BIG Music Publishing, we will sign up music directors and lyricists to manage and administer their IPR. This is an international model. The working arrangements of deals are being worked out and we will make an official announcement on a later date.
    How is India as a market for home video of Hollywood films, considering there is ample choice on television and moreover piracy is rampant?
    The Indian market for Hollywood titles has been conservatively handled until now because one thinks that English language is niche. But with BIG’s marketing, distribution, dubbing and pricing, we are expanding that market. In fact, home video business in India is still much smaller compared to the matured markets such as the US. The share of home video revenues in India is still under 10 per cent of the overall film revenues where as in the US, home video contributes as high as 55 per cent to the total revenues. 
    With the entry of large corporates like Reliance ADAG, the industry will see a dramatic growth. At the same time, increase in hardware player base, increased DVD hardware penetration and better marketing and distribution will surely drive home video revenue growth in India.
    As far as Hollywood home video is concerned BIG has achieved a sizeable market share. But what is the status in Bollywood music and home video?
    In home video, we are looking at acquiring 40 – 50 per cent of the top 10 films. We acquired a few big titles like Welcome, Jodhaa Akbar, Rock On and Singh Is Kinng instead of buying many small titles. 
    As far as music is concerned, we selectively acquire good and relevant projects to build a strong library. Moreover we also have a huge line up of releases of BIG Pictures’ own productions. 
    Music acquisition cost for some movies has crossed Rs 100 million (Rs 10 crores). What is your opinion on this system?
    These high prices can be justified if film delivers an outstanding music and global theatrical success. At the same time the music should be relevant across all platforms. Today, the time has come when only those music companies can make money, which has a presence across platforms like mobile, radio, licensing, television and physical format, on their own. 
    The sustainability of a company also matters – if they invest today, they will have to wait for two – four years for returns. 
    Revenue Classification of a Super- Hit music album 
    Media  Revenue Percentage 
     Physical Sales  40
     Radio  15
     TV (reality shows)  5
    Mobile (images, ringtones, CRBTs)   30-35
    Performances   5
    Miscellaneous  5 
    Do you see Internet as a model working for legit sales of music, after pirates have conquered the medium wholly?
    I think, Internet as a model needs to be readdressed and it can still be used as a medium for legit sales of music. Also, music can’t be sold by itself, one need to see what else can be sold with music – a different experience, information, images or may be give free music and earn from advertising revenue. We need to resolve the payment gateways and give comfort to consumer to use a credit card.
    Coming to home video, a few existing companies are selling their libraries and few buyers are selling content at throw away prices. How do you see BIG’s growth and expansion in this scenario?
    All this was bound to happen, firstly because riding home video on music was not a wise decision at all. Secondly, in India home video is not yet being distributed and marketed properly. In the next three to five years this business will grow multifold and will be much bigger than any business report’s projection. 
    If films are made at different costs and their rights are sold at different prices, then how can we sell home video at the same cost? I am not against low price distribution strategy for home video and we believe in mass distribution and penetration but at the same time you cannot price content at the same price. 
    Welcome was launched initially at Rs 149 and later re-launched at Rs 49. Movies like Love Story 2050 and Mission Istanbul were sold at Rs 69 from start itself. So pricing depends on the success and quality of the content and how much the customer is willing to pay for it.
    Do you think old movie catalogue and non film content acquisition can be a driver for home video sales?
    The content business whether music or home video is always driven by its tent pole new titles. We are acquiring select good old films as well like Ram Lakhan, Joggers Park, Sharabi, Muqaddar Ka Sikandar, Lawaris, Satyajit Ray’s classics and also non film content like Malgudi Days.
    In music, what is the share of Bollywood and non film albums in BIG Music?
    Currently our Bollywood share is approximately 80 per cent. But by next year end Bollywood content will come down and other non film content will go up, as we have signed a lot of artists. Non-film music will become more relevant when we support it with artist management and event management, unlike Bollywood which is supported more on digital platforms. There are some artistes like Jagjit Singh, Asha Bhosle, Ghulamn Ali, Javed Akhtar, Shankar Mahadevan, Rahat Fateh Ali Khan, Hard Kaur, Raghav from UK etc who are already working or signed with us.
    So far, what have been BIG’s bestsellers in music and home entertainment?
    In music Cash, Johnny Gaddar and Rock On have done well. And in home video Johnny Gaddar, Welcome and Jodha Akbar were good. In the last four weeks sales of Malgudi Days on home video has surprised all of us.
    Going forward how are you looking at strengthening BIG Music and Home Entertainment’s distribution system?
    We want to create a distribution network based on the profile of product and profile of customer. We have a lot of kids’ movies in our catalogue, so we looking at toy stores and book stores as selling points. These stores are supportive to the extent we support them in marketing the product, because they do not want to block their store space. Stores like Shoppers’ Stop and Lifestyle are already selling our content. In fact, the Hyper City store did phenomenal numbers for Jodhaa Akbar home video, not because they stacked it alongside music, but because they stacked it at the cash counter.