There is a lot of attention for Hollywood off late: Sarabjit Singh of NBCUniversal

Fast and Furious 7 and Jurassic World became the first Hollywood movies to garner over Rs 100 crore each in the Indian market. In a conversation with Ajita Shashidhar of Business Today, NBCUniversal General Manager Sarabjit Singh talks about how the decision to alter its distribution strategy gave the studio incremental revenue in the Indian market.

Q. Two of your recent releases have garnered revenue of over Rs 100 crore each. What according to you has triggered this growth?

A. All these successes are relative according to me. Unfortunately for the local film industry, this year there hasn't been any good product which has come out, except for Tanu Weds Manu and Dil Dhadakne Do. The first six months were slow for the local industry and it so happened that you had Fast and Furious 7, Jurassic World and Avengers, which did well. Had there been five good releases from the local industry, I don't think such comparisons would have happened. We should also be talking about why Bollywood hasn't been doing well.

However, what you are saying is right, there is a lot of attention for Hollywood off late. When the local film hasn't done well you got three big releases from Hollywood, which have worked.

Q. What is the big change that has taken place in Hollywood content for it do so well in India? Despite an adult certification, Fast and Furious 7 managed revenue of more than Rs 100 crore.

A. It has nothing to do with the content. Hollywood action content has always had a market in India. What we did is we went to cinemas which were earlier not accessible to us. There was a decision taken by the MPA (Motion Pictures Association) companies that they would only supply content to theatres which were equipped with 2K projectors. One of the reasons was security; apart from that there were quality issues as we wanted our audience to watch our films in a particular standard of quality. This decision was taken seven years ago.

All markets changed to 2K, but India didn't do as extensively. We got only 2,000-odd screens to 2K standards. In non-2K there are 6,000 screens and some were even using prints.

We evaluated the progression of 2K over a seven-year period, and found that it was not to our satisfaction. At the same time, we were not able to play our films in smaller cities where 2K wasn't available. We then decided to supply to non-2K screens also. That's how we opened up Fast and Furious 7 with 2,800 screens in the first week itself. Had the circumstances been favourable for 2K screens, we probably would have not felt the need to go to non-2K screens. This helped us in deeper penetration and obviously generated extra revenues for us.

Q. What percentage of your revenue came from the non-2K screens and smaller markets?

A. About 20 per cent of incremental revenue came from non-2k platforms.

Q. Has the appetite to consume Hollywood content increased in small markets?

A. I would classify Hollywood products in India in 2-3 different ways. One classification is the dubbed films and the other is the non-dubbed films. If you don't dub the film, then the market is too small. What we found over the years is action adventure films are one which has more playability in smaller towns and cities.

All Hollywood films don't necessarily do well, as the audience taste is different. Even Dil Dhadakne Do, despite being a Hindi film may not do well in smaller markets, as the audience taste is different. But if you give them a Fast And Furious, since it is an action movie, there is a market.

Q. So, if Universal were to come with a non-action film, would you release it in the smaller towns?

A. We may not release a non-action Hollywood film as widely in smaller markets. We may have to take back certain markets. If we are going generate less than the release cost, then it's no fun.

Q. You are the first Hollywood studio to release a film on a non-2K platform, doing you expect the other studios to follow suit?

A. I hope they do so.

Q. How long do you think it will take for Hollywood films to garner over $250 million revenue in India?

A. We are severely lacking in exhibition infrastructure. In China they have doubled up their exhibition infrastructure. They are adding 3,000-4,000 screens every year. For that reason you see films like Transformers doing close to $300 million, which is more than what they did in the US. Fast and Furious has done close to $400 million in China. Somehow, the investment sentiment in India is severely lacking and it's lacking not just because people don't have money, it's lacking because of government policies.

Q. Is Universal planning to produce local films in India?

A. We have thought about it, but not with the kind of business culture which is prevailing now in India. You have a huge market, which represents some 900-odd films every year. If you see the number of films that do Rs 100 crore or more business, there are hardly 20-25 films in a year which includes the regional language films also. So, if we take into consideration a film whose cost of production is over Rs 70 crore, around Rs 45 crore is generated from the theatrical market. Another 10 per cent is generated from the overseas market. Where do you recover the rest of the money? Unless you do a revenue of excess of Rs 100 crore, you can't recover your money. The satellite market has gone to the dogs. Today, only a Salman Khan or Ranbir Kapoor film is able to fetch around Rs 30 crore as satellite revenue. Earlier satellite revenue was upwards of Rs 50 crore; films used to touch breakeven from satellite revenue.

So, where do you get the revenue from? Digital media isn't that big, home video is negligible. It is a risky proposition.