Mukta Arts is now a true entertainment conglomerate with business interests in education, exhibition and content production and this year the company has begun to consolidate itself into verticals from which it can unlock value in the years to come. The company has had an up and down year with success coming in certain parts of the business, but others have had a year of tough graft, but all are better off for this and we seek better results in the future to reward our hard work and efforts.
The Indian media and entertainment industry grew by about 13% in the year gone by according to the most recent FICCI report. This is mainly powered by the growth in digital consumers across the country with the launch and appeal of Reliance Jio and many other OTT and streaming services. The film sector grew by about 27% from last year buoyed mainly by higher revenues from Satellite and Digital sales. Another boost for the Film sector is the overseas revenues, where non-traditional markets like China are now contributing big numbers to box office returns. Regional films are the best performers along with English films, as market share of Hindi films is being slowly eroded as consumers look for a variety of entertainment choices.
However there continue to be challenges as well. The tax regime in India is still far higher than other nations, and despite a number of representations, the GST council has not conceded to reduce the rate of GST on box office collections which is continuing to be a drain on the industry''s revenues. In addition, a lack of support of infrastructure in the small centers is also an impediment to screen growth and thus, the business as a whole.
This year Mukta A2 Cinemas has been fairly quiet on the expansion front. The company believed that this was the right moment to take stock of the properties currently existing and further rationalize the portfolio to prepare for better results. In the meantime, the company also launched a JV with Asian Cinemas in Hyderabad to invest in single screens in the Andhra region. We are now at 8 screens in this JV in addition to the 48 screens under Mukta A2 Cinemas in India and Bahrain.
The future pipeline for Mukta A2 Cinemas is now focusing on Tier 1 and Tier 2 cities. The next properties that the company will open will be in Vile Parle in Mumbai, Ahmedabad, Karimnagar, Pune and Chennai. This will add great value to the profile of the business as we strive to hit about 75 screens by the end of this next year.
A stronger pipeline of films this year coupled with better on-screen and off-screen advertising efforts should enhance the value for the company at the bottom line as Mukta A2 attempts to become an integral exhibition player in a slightly oligopolistic market.
On the content side, Mukta Arts is seeing great potential in utilizing its strong library for remake and sequel rights. These are in the film as well as OTT realm as branded content continues to be the leading light in the entertainment space. Mukta Arts is working with some strong industry professionals to create all kinds of content for various platforms including TV, digital and film. We have all the key relationships in place and we will be ready with specific project and their details in the months to come.
The programming business continues steadily. This is a diminishing business but Mukta VN continues to hold wonderful relationships which the company can exploit in a myriad of potential ways.
The best performing business for the company this year has been Whistling Woods International (WWI). The company has shown strong bottom-line profits and continues to grow robustly in terms of revenue, reputation and brand.
Whistling Woods has grown to over 950 students on campus over the course of this academic year and in July it will surpass 1,000 students in its courses. The partnership with TISS is proving extremely fruitful and WWI has continued its path as a thought leader in education and especially in media education. WWI was honored this year to be awarded the CILECT Congress, the major conclave on academic education in film, at the Zurich edition in October and this will happen in Mumbai in November 2018. Over 200 film academics and faculty will be coming to WWI to discuss education and it will showcase the burgeoning name the school has in the community.
In the spirit of our constant technological progress, WWI joined hands with Jio this year to begin work on the WWI-Jio VR Lab. This is the first of its kind lab to study and experiment in the upcoming field of Virtual and Augmented Reality. The lab will work with various stakeholders in the industry to build out a curriculum for education in the VR space as well as create commercial work for platforms keen on the new medium. The lab has started successfully and under the keen guidance of Akash Ambani, we are extremely proud of this new initiative.
The legacy now of WWI is that most State governments are keen to invite the company to set up operations and run courses in many cities across India. We are keenly evaluating these options both domestically and internationally.
WWI continues to build its partners - from You Tube to Sony and from Red to Adobe. The institute believes in giving its faculty and students the best tools for education and in turn allows them to be evangelists for new processes in the industry.
The legal situation is currently status quo but we continue positive dialogue with the government and I am very confident of a solution emerging in the very short term. This will help WWI to continue its work and expand the campus, not only in its current location but in other areas across the country.
Mukta Arts has seen its consolidated turnover rise 24% in the last year and our losses have also come down considerable. WWI has shown higher profits than last year, and Mukta A2 Cinemas is growing in both screens and revenues. The year gone by has been another challenging one for the company, but we have performed reasonably and I am hopeful that this growth will continue and will soon result in profits and I thank all our shareholders for their continued patience, faith and good wishes.
Subhash Ghai Chairman
Mukta Arts Limited