From being a one-man army in advertising in 1984, to holding 19 subsidiary companies under Percept Holdings in 2007 and becoming a limited company recently in 2008, Percept is now on its way to list on the bourses.

After establishing a strong foothold in marketing and communication services over the years, Percept joint managing director Shailendra Singh is now focusing on building the company’s entertainment division.

In a candid chat with Businessofcinema.com, Singh holds forth on the company’s various activities and plans under Percept Picture Company.

Excerpts:

Percept Limited is going through a transformational phase currently, can you please throw some light.
The plans of first round have been executed reasonably well. The second round is just beginning, all models of acquisitions, distribution, production, super heroes, animation, and merchandising are ready, and now they are being executed for the next level.

We are blessed with the whole network now and I do not think you can get another model like this in the universe. The entertainment segment has been well consolidated by us. The live events and advertising for Singh Is Kinng is done by Percept. If Priyanka Chopra has a movie release, it is of interest to us because she is signed as a talent with our company. So even if any movie is not Percept’s production we are still connected with it. On the film front particularly, a lot is happening with nine films that are ready, and lot more are on floors.

I want to make the movie and I want to make the money. PPC is here to represent the consumer’s interest in Bollywood, the journey started with the consumer and a lot of effort is put to win the consumer support.

But then, films like Dhol and Return Of Hanuman don’t live up to that image…
Dhol made money. It was a simple comedy. It fit in the 4C formula of comedy, children, cause, and commercial. Return Of Hanuman was an experimental film and moreover Welcome and Taare Zameen Par, which released the previous week, ran us over and it was not even possible to further postpone the release, so we were in a Catch 22 situation. But we still sold its satellite for Rs 7 crore and signed merchandise for Rs 3.6 crore for 50% royalty, so I broke even on the movie.

Recently, Percept collaborated with a new company- Mirah, which will invest money for Percept’s operation in movies. How did this come about?
We have known the promoters of Mirah for some time and their next-gen entrepreneur Gaurav Goenka wanted to flag off Mirah Entertainment, beginning with movies. So we collaborated for Mummy 3. He has collaborated with me to understand the business and ultimately I may hold a stake in his company.

After Percept’s deal with Sahara was through, what took you such a long time to pick pace and bounce back independently, despite having a head start?
We were primarily an advertising company, so after making Pyar Main Kabhie Kabhie (1997), we took a break because we realized that movies are not our core competency. Then later, we made Makdee and thereafter under Sahara’s association, PPC made movies and gave them to Sahara, and they got some great movies like Hanuman, Malamaal Weekly, Dor and their journey was not that bad.

Then subsequently we understood the game of doing this. So we gave an offer in the market for collaborating, and I even met Ronnie and Kishore Lulla, but I realized that each ones agenda was different. My belief is that, if you do not understand the content for consumer, then please do not make it. Tomorrow, even if my dreams make me a pauper, I at least enjoy what I do.

Has funding ever been a problem for PPC and for the slow pick up?
Honestly, last year there were patches when we were tight because some products did not work. And then, the assembly of movies is phenomenal, so therefore yes. We grow through partnerships, like we collaborated with Mirah for Mummy3.

When and why was the need felt to list Percept? Plans are to raise Rs 1500 crores…
If one wants to grow and make it a larger play then one has to go down that road. Out of Percept’s nineteen companies, seven will be a part of this listing, percept Picture Company included. If all goes well, we will be listing towards fourth quarter of 2008.

Percept, PNC, Sony and DQ Entertainment seem to have formed a formidable alliance. How has that come about?
I am doing some animation work with Tapas at DQ. We have distributed PNC’s Ugly Aur Pagli and now another film is in the pipeline, and we have distributed Sony’s movies. It is all happening at individual levels and there is no link at all.

This year has seen the company’s distribution wing in an active mode for acquiring Bollywood, Hollywood and even Pakistani movies, yet Percept does not have its own offices to actually execute the distribution? So, what pattern are you following for movie distribution?

But, we do have strategic alliances with Shringar to distribute our movies. I have to just pay commission to people who distribute movies for me, so I do not mind. I have 47 offices in India, so I can launch my distribution network tomorrow morning, but let the play get big and the movie slate get bigger. This is a time for core competencies, its best to do things you know; otherwise, you end up spending six months to just learn.

What is the reason that no other company is distributing films like Khuda Kay Liye and Ramchand Pakistani?
Because they know, it is painful and the returns are not good enough, so they rather put effort in something else. I don’t have money from these films either and I need a lot of media support, but I think we will ultimately benefit by gaining consumer confidence, and in a year or two a family can say ‘if this is a PPC film, then it ought to be good’.

Percept’s head of distribution Ashok Ahuja has huge amount of relationships by virtue of being in the industry for thirty years, so he also has a way of working and we are happy with that.

PPC has been very gung ho about animation movies, which is contradictory to the views of the film trade. Comment.
To be very honest, I do not believe in animation, I believe in children entertainment. Children entertainment was matured and established with animation as a technology. Kids like animation, so we took animation as a route. When we did Hanuman, nobody was interested in animation and now there are 90 movies ready for release- typical herd mentality, not understanding that animation per se will take a long time to stabilize in India because the kids are used to international quality. It will take at least 4-5 years for the animation market to stabilize, it will be a tough play until then, and a lot depends on Roadside Romeo.

Over the years, Percept has evolved into a one-stop shop for marketing and communication. Will you replicate the hub model for the movie business as well?
In the communication space, we are an Omnicom model. We have all the ancillary companies that are required to ensure that a movie is made and marketed well. The value chain is being built to enhance the movie business further, but we will not venture into fields like music and exhibition.

Currently, is Percept focusing more towards entertainment or marketing and communications?
Currently entertainment (PPC, PDM, PTM, P9) forms a share of about 50 percent and marketing and communication together contribute balance 50 percent. By this year-end, we expect entertainment to start contributing up to 85 percent.