Were you pleased with the performance of the Company?
We were not happy with our performance in 2010-11 for an important
reason: ''Prince'', the film that we launched, did not meet our
expectations. This reflected in our overall performance during the year
under review: Net revenues declined from Rs. 85 crore in 2009-10 to Rs.
67 crore in 2010-11. At Tips, we see the decline in our performance
during the year under review as a temporary aberration. Your Company
continues to enjoy a reputation for creating quality content and
professional practices and we soon expect to overcome the performance
Where is the Company placed within its industry space?
Tips is one of the leading entertainment and media companies in India.
It is one the few companies with a leading presence in both film and
music. Tips evolved into one of India''s most- respected film production
companies, balancing quality film content with compelling music. The
result is that the Company has emerged as a partner of choice for
artistes, technicians and exhibitors, resulting in a sound throughput
across a wide entertainment basket.
How is India''s media and entertainment industry evolving?
India''s media and entertainment space is passing through some exciting
times. The media universe is becoming increasingly complex, specialised
and fragmented. The consumer preferences are fleeting; the cycle time
for popular song to run its course has declined even as the cost by
rights for song has increased.
At Tips, we believe that it is indeed possible to profit from this
seemingly complex environment. For one, it is increasingly
critical to get one''s strategic moves right as the cost of error can
indeed be high. Besides, companies need to evolve in a manner in which
they distribute content over secure platforms, optimise costs and adopt
the best operational practices.
What gives you the optimism that Tips can prevail in this environment?
At Tips, we possess the capability to deliver award-winning and
revenue-generating entertainment content. Besides, we also possess an
attractive business model when appraised from a medium-term
The strength lies in our captive film production and distribution
capabilities, which makes it possible for us to produce quality films
at a low cost within schedule and work with credible distribution
partners who can help us maximise our revenues. These films generate
chunky revenues during the time they are released wherein our objective
is to earn higher than what we spend on them. For instance, our 2009-10
release Ajab Prem Ki Ghazab Kahani figured among the three top grossers
of 2009-10. We released three films within a space of six months in
2009-10 and expect to sustain this pipeline over the foreseeable
These films do not merely generate revenues during the time of their
release; since they possess a long shelf life, they generate a
reasonable annuity income through their film and music content.
What is the basis of your industry optimism?
The overall media and entertainment market in India is expected to grow
at a compounded annual growth rate of 14 percent per annum through 2015
to reach INR 1.3 trillion, catalysed by the emergence of different
media, higher audience segmentation, content for niches, robust
regional growth, growing content digitisation, increasing mobile and
broadband penetration and industry consolidation. Earlier, it was
possible to see films in the conventional theatre or television format;
round the corner, it will be possible to watch films on mobile phones,
widening our revenue stream.
How does the Company intend to exploit this industry optimism?
The Company has the following initiatives lined up for 2011-12:
- A big-budget sequel to Race (launched in 2008) called Race 2 with a
leading star cast
- A mid-budget film with Shahid Kapoor (directed by Siddhartha Anand,
music by Pritam)
- A Punjabi film named Jihne Mera Dil Luteya directed by Mandeep Singh
- Acquire rights for music
The Company plans to release around five films by March 2013, which
should increase revenues from Rs. 67 crore in 2010-11 to Rs. 200 crore
How does the company intend to enhance shareholder value?
We feel that our existing strategy will translate into enhanced profits
across the medium-term. Besides, our share buyback was successfully
completed. In due course, we expect our performance to improve and for
this to reflect in superior value for all those who hold shares in our
These initiatives will enhance film production revenues in an
attractive way over the foreseeable future.
Tips Industries entered the film production business in 1995. The
Company released 27 films as on March 31, 2011. The Company distributed
its own films rather than buy them from other production houses. The
Company generated revenue from box-office collections, International
rights, music, home video rights, among others.
- The Company intends to launch a big-budget film Race 2, starring Saif
Ali Khan, John Abraham, Anil Kapoor, Deepika Padukone and Sonakshi
Sinha (directed by Abbas-Mastan, music by Pritam) in 2011-12.
- The Company intends to produce a mid-budget film with Shahid Kapoor
(directed by Siddhartha Anand, music by Pritam) in 2011-12.
- The Company intends to release a Punjabi film, Jihne Mera Dil Luteya
- The Company intends to enter into a tie-up with a leading studio to
invest, fund and distribute films made by the Company.
- The Company''s repertoire of films of last 25 years is expected to
continue generating royalty revenue.
- The Company plans to release around five films by March 2013.
These initiatives will enhance film production revenues in an
attractive way over the foreseeable future. m^w,
In India, music business is an important part of the entertainment
industry with total size of roughly US$ 10 million. Hindi film music
dominates this with a 40% share followed by regional and old hits at
25%. However, the recent affect of digitisation has resulted in
shake-up of old and established model, and is likely to see major
revamping. Unless a newer model emerges, the company has decided to
remain selective in the music business.
Tips acquired music rights for the movie BOL during the year under
review. The Company appointed a new head of music business development
to unlock its archival value. Royalty income from music rights
increased from Rs. 31 crore in 2009-10 to Rs. 36 crore in 2010-11.
The Company''s 25-year music repository is expected to generate royalty
revenues across the coming years.
Chairman Kumar S. Taurani
reviews the company''s performance