Pawan Chabra throws up a stubbornly interesting claim that airport authorities

and even oil marketing companies – should learn to make money from beyond the promised land, specifically, real estate...

It’s called the Boomerang Karma and it doesn’t need stuporous intellect to fathom. Pretty simple actually, and can be consolidated in my modified karmic conjecture – ‘What goes around, comes around... only if you throw it at the right angle!’ My conjecture centres around airport authorities and oil marketing companies and their ‘boomerang’, that is, the real estate they own; or rather, the investment locked within the huge tracts of real estate. And my hyper intuitive argument goes that to get their true returns on investment, airport authorities and oil marketing companies (OMCs) need to look beyond flying planes and selling oil! And where, dear Watson, should that be? Elementary, dear Holmes, just around the corner!

For the answer, ask yourself – the last time you were waiting in an airport lounge for catching a flight, what were you thinking of purchasing, other than of course cursing the fog for the delay? Bingo! There’s the answer. From selling food, drinks, books, apparel, accessories, shoes, gifts, to even providing for ATMs to get cash, airports are typical captive markets teeming with prospective consumers. And that holds considerably for even petrol pumps that can be exploited in more ways than just by selling fuel!

But what’s the real scene in India? “We make most of the money by our core business i.e. by fuel retailing and not by other activities. The scenario in India is very different as compared to the western countries,” confesses an HP petrol pump owner in Delhi requesting anonymity. It is true that the Indian retail industry is literally burning from the slowdown in the industry; and that’s the case with both low cost retailers like Subhiksha who are struggling to stay alive, and other regional retailers who are suffering a severe problem of cash crunch. But Airport Authority of India (AAI) and OMCs have the potential to make hay even while the sun isn’t shining. The reason is very simple – retail, despite the slowdown, is still one of the largest and fastest growing industries of India and with a contribution of over 10% to the country’s GDP, it accounts for close to 8% of total employment in the country.

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Source : IIPM Editorial, 2009

An Initiative of IIPM, Malay Chaudhuri and Arindam chaudhuri (Renowned Management Guru and Economist).

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BOLLYWOOD IN ITSY-BITSY MODE

IIPM set to beat economic slowdown

Small has been beautiful for Bollywood in 2008 and as far as 2009 goes, the jam on Bollywood’s slice is all set to match the flavour

Like India Inc., the slowdown sentiment has bitten tinsel town - a place where suited buited corporate types have become the norm rather than an exception. “2009 is likely to see fewer movies and I think actors will see less but more interesting work,” says filmmaker Pritish Nandy, firing the first salvo.

So will 2009 have more small budget movies? “Yes,” if ex-editor of Screen and Filmfare, Rauf Ahmed is to be believed. Says the veteran, “In 2008, movies with a small or moderate budget worked well. We’ll see more of the same this year.” Movies (with budgets upto Rs.12 crore) like Mithya, Aamir, Welcome to Sajjanpur, Jaane Tu..., A Wednesday, Rock on, Fashion, Oye Lucky Lucky Oye, et al made fabulous moolah at the box office. “Jaane Tu is the biggest example of modest budget films working in 2008 and the trend will continue,” offers Shubhoshekhar Bhattacharjee, CEO, Planman Motion Pictures. Movies like Luck By Chance (from Big Pictures and Excel Entertainment) and Dev D (from UTV’s stable ) will be the first few movies in this genre to test the waters in 2009.

In boom time, the major focus is on top lines and attracting big numbers. But in a slowdown, people start focusing on the bottom line because that’s what helps to keep you going when the going gets tough. The risk in a small budget movie is less since a smaller investment is at stake comparatively. Even if the movie does average business, costs are easily recovered. Plus a greater focus on script at least ensures that the multiplex crowd is attracted. “You know that you don’t have a Shahrukh or Akshay to save you, so you work harder on the script,” argues Imtiaz Ali, the maker of Jab We Met. Producer Vipul Shah adds, “This year, the script will be the barometer of the film, not the star cast.” Sanjay Mehta, arguably the biggest film distributor in Delhi adds another dimension, “Multiplexes need small films as they have multiple screens and multiple shows in a single day. One obviously does not have a big film releasing each of the 52 weeks of the year to keep all shows running.”

But some disagree, arguing that big budget movies like Ghajini (which has broken all industry records, raking in over Rs.200 crore) are the face of Bollywood. They are not wrong. In fact, mega bucks and mega starers like Ghajini and Rab Ne Bana Di Jodi continue to conquer every movie-goer inhibition viz. terror attacks or tight pockets. But sample this: at least 15 movies (taking a conservative estimate) were released in 2008 with budgets ranging from Rs.20 crore to Rs.50-60 crore. Only three of them (Ghajini, Rab ne and Singh is King) became a rage at Box Office. Movies like Love Story 2050, Drona, Yuvraj, Tashan, God Tussi Great Ho were disasters. Race and Jodha Akbar did well, but they were nowhere near Ghajini or Rab Ne in terms of collections, leaving just the big three (above) balancing the Bollywood balance sheet for big flicks in 2008.

This is not to say that big budget movies won’t be made in 2009. But since liquidity is a concern, they’ll be made with a lot more caution. Movies with swanky Rs.50 crore budgets will certainly not be the popular choice for film makers; if made, every effort will go into keeping spends under control. Nandy agrees, “The industry has to rethink and get into a viable mode. Everyone needs to behave responsibly and make movies at reasonable costs.” Small indeed promises to be beautiful on 70mm screen this year!

Pallavi Srivastava

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Source : IIPM Editorial, 2009

An Initiative of IIPM, Malay Chaudhuri and Arindam chaudhuri (Renowned Management Guru and Economist).

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“I WANT MY GUJARAT TO BE THE BEST”

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HIS ELECTORAL VICTORIES ARE NO FLUKE AND CAN’T BE CREDITED TO THE HINDUTVA ICON TAG EITHER. BRAND MODI ALSO SIGNIFIES ‘DEVELOPMENT’

Soon after his triumph in the January 08’ Assembly Elections in Gujarat, Narendra Modi in an exclusive interview to our sister magazine The Sunday Indian had emphasised his single minded focus on building a Vibrant Gujarat; something he seemingly values over even his own image. He said, “I don’t waste time on my own image building. I use my power, energy and time to build an image for Gujarat. I want my Gujarat to be the best.” Modi has lived these words ever since he accidently became Gujarat CM more than eight years ago (when incumbent Kesubhai Patel had to leave because of dissidence). Ever since, he has not just transformed the image of Brand Gujarat as a key investment destination in India, but himself has become a global brand signifying development and inclusive growth. According to K. V. Kamath, MD, ICICI Bank, “Modi has magically transformed Gujarat in the last 7-8 years from a drought-prone, power-starved state into one of the most developed states of India.” The praise is not unreasonable. As per RBI, during Modi’s tenure, Gujarat has received investment proposals of Rs.62,442 crore up to March 2008 (22% of India’s total investments). Further, sources in the government reveal that Gujarat’s development index has already surpassed nations like Singapore, Thailand & Brunei. And behind the makeover, there is the Modi mantra for inclusive development. Don’t go far, just look at the manner in which Modi wooed Tata’s Nano into his state with just a simple SMS – ‘Welcome to Gujarat.’ At the Vibrant Gujarat Summit in January, Ratan Tata had said, “Those who are not coming to Gujarat to invest are dunce.”

Least bothered about his detractors, Modi has concerned himself mainly on the development of Gujarat. “Politics for me is not ambition, but a mission,’’ he says. Small wonder that Adi Godrej refers to him as the CEO of Gujarat. He once said, “Whenever Modi says anything, we industrialists do not think that a CM or politician is talking. He is a CEO and whatever he says, he does.” Such confidence in a politician is remarkable, especially in a country where politics has almost become a dirty word. But Modi prefers to call himself a trustee of Gujarat, one whose mission is to accomplish Gujarat’s economic and social progress. He intends to make Gujarat the infrastructrural hub of India. “Gujarat leads the way on every front – be it economy or social. The Gujarat model of all inclusive development is benchmark,” he confidently avers.

Known in administrative circles for his strictness and demand for discipline, Modi has a 24-hour hotline number for the junta and promises that all complaints would be attended to within 48 hours. Even bureaucrats are under pressure to perform, having to routinely present their progress reports to him via PPTs. 24X7 electricity supply (Jyotigram Yojna) across Gujarat has been Modi’s greatest achievement. Love him for his progressive approach, or hate him for his regressive brand of communal politics, but you certainly can’t ignore this firebrand Modi!

Manish Macwan

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Source : IIPM Editorial, 2009

An Initiative of IIPM, Malay Chaudhuri and Arindam chaudhuri (Renowned Management Guru and Economist).

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Return of the real McCoy!

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But then, terror attacks or no terror attacks, one cannot disregard the fact that it is purely the global economic slowdown that has resulted in the overseas rights of films getting hurt massively. Vikas Sahni, noted Mumbai based film agent, reveals, “People have either stopped buying overseas rights or are very cautious about it. Companies like Neptune, CA corporation, Venus et al have bought no overseas rights for a Bollywood movie in past few months.” Even Eros has stopped buying rights for new films as of now. And that is surely a big hit, given that some so called ‘intellectual’ movies (or multiplex draws) do badly domestically, yet make up big time overseas – Siddharth Roy Kapur, CEO, UTV Motion Pictures, confirmed to us, “The industry has become quite reliant on such sales to make movies payoff.”

Industry veterans like Sajid Khan, Imtiaz Ali and veteran journalists like Rauf Ahmed share with us that this situation may be beneficial for the industry in the long run as a lot of non-serious filmmakers, who got into the business just for the heck of it, will be discouraged now. Imtiaz adds, “This will also lead to price corrections resulting in tighter budgets and huge slash in talent fees.” UTV’s Kapoor confirms, “We are already working out with all the partners in the value chain (including directors and actors) on how to make costs more rationalised.” Sanjay Dutt, Akshay Kumar, no name is big in the latest move to ‘rationalise’ actor fees. Connected to these are collection estimates. “The kind of collection figures that have been put out by producers in the past, the kind of numbers actors displayed as their fee worth, is unrealistic and unreliable in terms of current viability,” feels Nandy.

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Source : IIPM Editorial, 2008

An Initiative of IIPM, Malay Chaudhuri and Arindam chaudhuri (Renowned Management Guru and Economist).

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IIPM set to beat economic slowdown
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